The Hindu Business Line : Power Trading Corp gains ground on fund buying

The counter has been witnessing sustained FII buying. According to the market grapevine, a large FII picked up a large quantum of shares via the open market on Wednesday at an average of Rs 52.50 a share.

The stock has appreciated by more than 8 per cent from around Rs 49 as on August 1 to its current levels of around Rs 53.

While terming it a long term bet, brokers appeared quite puzzled over the large volumes being witnessed at the counter. Analyst's reason that the stock is being perceived as a value pick and that it not on account of any news based movement.

"PTC enjoys first mover advantage on account of its established relationships with the State power utilities. It also has a nodal agency status for cross border trade. We expect PTC to record a CAGR of 29 per cent and 31 per cent on the topline and PAT levels for the next two years. We expect volumes to grow at 30 per cent," says analyst, Mr Bhavin Vithlani of P-Sec.

Though entry barriers to this business are low, given that the market size is expected to increase, there is no concern of a decrease in the company's transaction volume, he added.

And with the MERC and CERC having given the go-ahead to sell excess power to external parties, the company is expected to be on firmer footing going forward.

Good growth prospects apart, there have been concerns that the stock is trading at the higher band of sector valuations.

However, analysts maintain that this is due to lack of proper comparative model and exponential growth reported in the past.

According to market sources, the stock is said to have outperformed the index in the last four months since its listing. The stock reportedly showed a positive growth of 56 per cent, as against the Sensex, which showed a negative growth of 11 per cent.

The stock ended the day at Rs 53.05 on the BSE, up 6.53 per cent with around 54.15 lakh shares traded. On the NSE, the counter witnessed a volume of 1.19 crore shares, ending the day at Rs 52.85 up 6.12 per cent.

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