Wait and watch for the power sector: Prakash Diwan, Asit C. Mehta Investment Intermediates Ltd.

Prakash Diwan, Head-Institutional Clients Group, Asit C. Mehta Investment Intermediates Ltd., in a chat with ET Now, gives his views on the power sector


There is some definitive traction over the last couple of days in the power space and in today’s trade in particular on the power transmission companies?

True. In fact in today’s session it is the power transmission boys who have caught the attention but if you see the last few sessions, we have been seeing a lot of this in the likes of PFC, even PTC. Finally the government is likely to come up with some sort of an announcement related to this sector and that could be related to merchant power if an assessment of what we have heard from sources is right. The whole issue of not being able to freely price merchant power to the extent they could, especially if you could renege on some of these short-term PPAs that you had with SEBs, that is something which has been pending for a long time. If that gets through given the fact that coal prices, input prices have gone up so significantly would ease out a lot of stress from these power companies and hence, all of these would start getting those pending orders that they have been waiting for, so that’s very much on the cards, the specifics of course will have to be awaited but these companies offer a tremendous value if somebody has the patience to kind of wait for them to start getting into their operational optimal efficiency levels.