After oxygen, green hydrogen fuels rally in this stock

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Shares of Linde India are back on investor’s radar as they have surged sharply in the last few trading sessions. The stock has rallied over 40% in just the past five sessions and continued to surge in Thursday’s deals as well, touching to a new all-time high level of Rs 2,750 on the NSE.

The industrial gas maker has been in focus since the outbreak of the second wave of Covid 19 when there was an immense shortage of medical oxygen. The stock has turned out to be a multibagger for investors as it has rallied 183% since the beginning of 2021.

But this time the company is in focus for its green hydrogen business. Prime minister Narendra Modi in his Independence Day speech said, “Green Hydrogen is the future of the world. Today, I announce the setting up of the National Hydrogen Mission with the aim of becoming the new global hub of Green Hydrogen, and also its largest exporter.”

Linde India was formerly known as BOC India Limited, is a member of Linde Plc. and is one of the leading industrial gases company in India. It is the only company to cover every step in the hydrogen value chain from production and processing through distribution and storage to everyday industrial and consumer applications.

According to Haitong fertilizer plants are likely to adopt ‘Green Hydrogen’ much faster than steel plants. In steel plants, substituting coal with hydrogen is very difficult as a lot of quantity of hydrogen would be required and to get such a huge quantity of hydrogen a huge setup of hydrogen production is required, so using hydrogen in steel plants would take a long time. On the other hand, in the case of fertilizer plants, hydrogen produced through electrolysis is combined with nitrogen to form ammonia. This will also reduce consumption of natural gas.

“Through the ITM Linde Electrolysis (ILE) joint venture, Linde is one of the world’s leading suppliers of PEM electrolyzer technologies (proton-exchange membranes), which means that its customers can rely on end-to-end, integrated green H2 solutions,” stated Haitong in a report.

On the financial front also Linde India has posted stellar Q2CY2021 performance and reported a net profit of Rs 72.50 crore for the quarter ended June 2021 compared to a profit of Rs 19.81 crore in the year-ago period. Revenue from operations grew 109% to Rs 519.17 crore in the June-ended quarter against Rs 248.13 crore a year ago.