PTC India – Diversified Power Sector Play

PTC India Ltd has evolved from a pure play power trading company into a diversified and integrated entity with businesses ranging from power trading, coal trading, power project development and project financing.

Edelweiss has a Fundamental BUY on the stock with the main reason being the company’s current 18 bn kWh power trading volume in FY10 is expected to catapult 150% by FY13E and triple by FY15E to 57 bn kWh. Additionally, PTC Management wants to list PTC Financial Services in FY11 as some of the original investors were offered exit option by January 2011. Recent media reports highlight a valuation of INR 19 bn at 3.2x FY10 book value, translating into INR 49/share for PTC India.

PTC India’s EPS is expcted to be Rs 3 for FY 11 and FY12 but likely to jump to Rs 9 in FY13 according to estimates. Edelweiss has a medium Term target of Rs 180 on the stock.

Shiv Vani Oil & Gas with an expected EPS of Rs 60 for FY 11 is expected to reach a target of Rs 525 in the medium term according to Edelweiss.