The Hindu Business Line : PTC gains on hopes of power sector reforms

THE Power Trading Corporation (PTC) stock on Thursday witnessed over 9-fold jump in volumes on the major bourses with around 7.8 per cent jump in its price.

According to analysts, a revaluation exercise is on for the power sector stocks as the expectations were high that the reforms would accelerate in the coming months in the sector.

For the PTC stock, the positive developments this month have served as trigger for added attraction. Early this month, PTC has received Central Electricity Regulatory Commission licence for trading. Maharashtra State Electricity Board has penned power purchase agreements with traders such as PTC for drawal of 620 MW power round the clock in order to the shortage in the State.

Beginning with spot trading of electricity, the Centre also plans to introduce a market for futures and options trading in power. The government is considering introduction of derivatives trading during the current fiscal.

"PTC has started the process to set up first power exchange in the country for which the company is likely to rope in an international partner," Mr Devarsh Vakil of Anagram Stockbroking pointed out.

PTC has already signed MoUs with prospective sellers.

The stock at today's closing price of Rs 53.90 traded at 20 times its 2003-04 earnings per share of Rs 2.3.

The delivery volume (around 20 per cent of the total trade), however, suggested that it is more of a speculative volume than investments today in the counter.