Power Transmission and distribution-An Opportunity

So the reforms from Modi Government are kicking in across all sectors and the last week it touched Power Distribution and Transmission sector which is stuck between supply and demand disparity among Eastern and southern part of India and its own problems of  AT&C losses (Aggregate Technical and Commercial) are for long time. The big push on investment in this sector we certainly create new opportunity for some and remove AT&C (partially) from others.

News from ET:
http://economictimes.indiatimes.com/industry/energy/power/cabinet-approves-rs-32600-crore-power-scheme/articleshow/45223800.cms
http://economictimes.indiatimes.com/industry/energy/power/union-cabinet-clears-rs-5111-crore-power-system-improvement-project-for-north-east/articleshow/45232998.cms

Here is some analysis on the stocks in this sector who have competitive edge among all and can capitalise this opportunity to the fullest.



BS Limited had 16.78% increase in revenue for year ending 2013-14 and order book which is boasting to the tune of 1,500 Crores provides an ample opportunity for money making. With recent quarter ending result saw an increase of around 15% in sales may be slowly reflecting its strong order book. Continuously improving margins and leaner debt/asset makes BS stand among its peers.Better ROE and EBIT margin among peers scores additional points for itself.

Margins were lower than expected for KEC with recent quarterly result and it has to improve on this part along with paying off its liabilities.

While Torrent Power had specifically mentioned its AT&C loss from Bhiwandi (22.68%),Agra (43.47%),Ahmadabad and Surat (T&D 6.54%) we hope this will turn around partially for company in coming few years and reflect as money in investors pocket.

Our take: Buy BS Limited  Target: 29
Data Source:Moneycontrol.com,nseindia.com

Disclaimer: Opinions presented here personal to author. Consult your Investment Advisor before investing. EquityShastra is not responsible for any loss incurred by anybody if traded based on solely presented information.

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