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Jayanta Mallick

Kolkata, Oct. 16 The power generation and distribution stocks continued the northward journey powered by strong long-only overseas funds.

Even as the Indo-US nuclear power deal has been placed in “cold storage temporarily” and the benchmark indices took a breather, most of the counters in this sector saw a substantial rise on Tuesday.

According to Mr Ajay Jaiswal of Angel Broking, a section of investors, particularly FIIs with long-term view, are seeing significant growth potential for the sector.

Some of the newer foreign players are entering the sector stocks now.

Expectations of the higher quarterly earnings are also working behind the strong sentiment. Mr Arun Kejriwal, a market analyst, felt the forthcoming events such as Reliance Power issue and expansion plans are driving the stocks.

Mr Gul Teckchandani, an independent strategist, felt the policy thrust on the sector in the near future would obviously be significant if the GDP has to grow and sustain a 9 per cent level in a power-deficient country.

Tata Power has plans to spend Rs 18,000 crore for expansion of generation capacity to around 4,500 mw and REL is to begin construction work for 2,100 MW of fresh capacity next April, while CESC has put on drawing board three new power projects and one expansion plan totalling over 4250 mw for the next couple of years.

Reliance Energy gained 3 per cent to close Rs 1904.4 on the BSE. Tata Power surged 23 per cent to Rs 1,370.9.

REL, the best performer among the 30-share Sensex so far this year, has gained by over three times.

Incidentally, REL Q2 results are scheduled to come on Wednesday.

The other gainers were Powergrid (10 per cent), PTC (5.68 per cent), Torrent Power (5 per cent) and NTPC 2 per cent.

Engineering firm Siemens spurted 12.02 per cent to Rs 1,695.80 and came third among top gainers in A group.

State run power generation firm Neyveli Lignite Corporation moved up 10.55 per cent to Rs 123.15.

It was the fourth biggest gainer in A group.

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