Financial Daily from THE HINDU group of publications
Tuesday, Aug 12, 2003
Financial Daily from THE HINDU group of publications Tuesday, Aug 12, 2003 |
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Markets
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Stock Markets Sustained buying perks up power sector stocks Deeptha Rajkumar
STOCKS of frontline and second-rung power equipment and power utility stocks surged ahead on the bourses on Monday on sustained buying support. From the counters of BHEL, Tata Power, Reliance Energy/BSES to Alstom Power, CESC, Ahmedabad Electricity, Surat Electricity etc all witnessed investment-based buying. While there is no denying that the feel-good factor surrounding the sector is aiding momentum in almost all power stocks, sources said that of late fund interest in these stocks has been significant. "Today one can see action in terms of projects taking off and visibility in terms of order book growth. All this has contributed to build up of confidence in this sector," Mr Dilip Bhutt, head of research at Prabhudas Liladher said. The fresh awarding of contracts in the sector in the recent past has only served to stimulate interest further. "The Electricity Bill has re-energised the sector. And unlike earlier when growth opportunities were restricted, the reforms will allow these companies to grow at a much faster pace. In fact, going ahead this is one sector that will attract foreign investment," said Mr Srikant Shetty of Karvy Stock Broking. Analysts maintain that the de-licensing of power generation projects will definitely help in improving investment flow in generation. "Distribution licensees would now be free to undertake generation and generation companies would be free to take up distribution, so inefficiencies of one will not impact the other. And with the improved conditions of state electricity boards (SEBs) one will see private players being attracted to this sector," an analyst said. However, while brokers are confident that there is still some more steam left in frontline stocks such as BHEL, Tata Power and BSES, they feel that the second-rung stocks have priced in all the positives. Hence risk of disappointment at these would be higher. While intra-day trade saw the BHEL counter hit a 52-week high at Rs 302.95, the stock ended the day steady at Rs 292.25 on the BSE and Rs 293.35 on the NSE. Tata Power ended the day at Rs 167.20 up 3.72 per cent with around 13.36 lakh shares being traded on the BSE. On the NSE, the stock closed at Rs 167.80 up 4.13 per cent with around 27.6 lakh shares changing hands. BSES/Reliance energy ended the day at Rs 313, up 2.09 per cent on the BSE and on the NSE, the stock ended the day at Rs 313.10 up 2.52 per cent.
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