18 October 2010

Top midcap pick PTC says IIFL,

Bookmark and Share Visit http://indiaer.blogspot.com/ for complete details 􀂄 􀂄


Power Trading Corporation: captures power chain
Largest power trader; volume CAGR at 40%: PTC is the largest
power trader in India, with a market share of 45%. The power trading
markets in India are set to register a CAGR of 20% through FY20ii,
driven by: 1) increase in generation capacity; 2) firm regulations; and
3) improved grid connectivity. PTC offers a good play on this emerging
power-trading business. PTC has signed PPAs aggregating to 6,000MW
with generating companies, which are expected to drive its volumes at a
CAGR of 40% during FY10-13ii.
EBITDA growth of 60%: We see PTC’s trading margins improving
gradually through FY13ii, thanks to recent de-regulation of power
trading margins, which enables traders to charge market-determined
margins (as opposed to the fixed 4paise/unit in FY10). This, we reckon,
will result in an EBITDA CAGR of 60% CAGR over the same period.
Expanding presence across the value chain: PTC has established a
dedicated NBFC subsidiary to cater to the power sector—PTC Financial
Services (PFS). Its sanctioned loans aggregate to Rs28bn, and it has
also invested Rs4bn in equity of smaller IPPs. Separately, PTC has set
up a power fund (in a JV with Ashmore), and expects closure by
3QFY11. Such diversification initiatives would contribute to PTC’s
consolidated earnings over the next 3-5 years.

No comments:

Post a Comment