The renewable energy sector in India has been dynamic in the last two decades, and especially over the last few years, with ambitious targets. That said, recent bottlenecks the sector has faced suggest that businesses in the sector require to focus on creating ‘economic moat’ to enable the next phase of growth.
The term ‘economic moat’, as defined by Morningstar, is ‘a structural business characteristic that allows a firm to generate excess economic returns for an extended period’.
It is vital that firms in the renewable energy sector that want to be profitable and deliver investment returns in the long run continually reassess their business models from a financial viability perspective. Read more