As power sector resolution reaches endgame, lenders in investor focus


As power sector resolution reaches endgame, lenders in investor focus

The Allahabad high court’s decision to deny relief to power companies facing debt servicing problems may have stoked fears of a fresh bout of write-offs for the banking sector. But the decision has triggered a rally in the shares of Power Finance Corp. Ltd (PFC), Rural Electrification Corp. Ltd (REC) and PTC India Financial Services Ltd. The stocks gained 6-8% over the last four days.

PTC India Financial Services, the smallest of the lot, continued the gains on Thursday, rising 6%. The company’s results for the June quarter showed sequential improvement in provisions and earnings. Compared to a loss in the March quarter, it reported a profit of about ₹55.9 crore.

PFC and REC are yet to release their financial results for the June quarter. But low valuations—all three are trading at a huge discount to their book value—and hope that the worst may be coming to an end are bringing these stocks back in the spotlight. Read More

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