Accumulate PTC India stock for 30% return in medium term

Energy is one of the important catalysts and critical components for any nation’s economic development and acts as an enabler to various forms of commercial and individual activity. India is focusing on enhancing sustainable power generation and power trading solutions in a very proficient manner by taking steps towards energy conservation and finding methods to save the depletion of energy resources. The government has played an important role in providing for the energy needs of the nation and there has been a growing realisation to involve private enterprise in the development of the power industry. India is the third largest producer and consumer of electricity in the world with an installed capacity that has increased from 1362 MW to more than 370 GW in the last 70 years. In spite of significant improvement in reducing deficit, the inherent diversity in demand within the country results in periods of seasonal surplus in one region coinciding with period of deficit in another region. PTC India Ltd. (formerly known as Power Trading Corporation of India Limited), was incorporated to undertake trading of power to achieve economic efficiency and security of supply. To develop a vibrant power market in the country, PTC India was created out of a need for an institution which could provide credit risk mitigation to private power projects. The company undertakes trading activities which include long term trading of power generated from large power projects as well as short term trading arising as a result of supply and demand mismatch. PTC India has provided the best value to both the buyers and sellers plus ensuring optimum utilisation of resources. It has evolved into a value company in short period of time with a client base covering all the state utilities of the country as well as some power utilities in the neighbouring countries. The company posted decent quarter June ending 2021 financial numbers with net sales at Rs 4,621 crore, up 8.42% from Rs 4,262 crore for the same quarter of last fiscal. Net profit stood at Rs 76 crore for the current June end quarter up 13.6% , as against Rs 67 crore for the same quarter as of last year. PTC India is working on new business models such as providing transmission connectivity to refineries, providing management to electrical distribution network, conducting energy audits, providing power portfolio management and providing back end operations to refineries. It is also exploring opportunities in the renewable energy space. Plus in association with Bombay Stock Exchange and ICICI Bank, the company has filed a petition to obtain a license for running and obtaining an electronic power exchange platform. The PTC India stock quoting at Rs 125 on the bourses is being recommended by equity analysts and fund managers for portfolio investment purposes. Power stocks have been on a roll in the last few months and hence investors can accumulate the PTC India stock for a medium term investment perspective for a 30% price appreciation target.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.