Home

A bear case for power companies

stockguru's picture
Submitted by stockguru on December 5, 2009 - 20:43

Tata power, Reliance power, Adani , Torrent and many more power utilities trading at hefty premiums with market caps in excess of 10000 Cr for most of them. Most of them have no earnings so far , still in development phase. Power is very low margin business and considering amount of investment it takes to build the plants a p/e of more than 20 absolutely doesn't make sense for Tata and  CESC.

I am bullish on long term for power sector, but current valuations are taking next 5 years growth in account. If market will correct from here power utilities are vulnerable to correction.


»

About stockguru

Stockguru has been investing in Indian Stocks since 1990.With an MBA in finance from Pune university and more than 20 years experience in finance industry he is a well respected finance professional.

Recent Comments and talks

What is AskDalal ?

AskDalal is a investment blogging portal dedicated to Indian investment community , where every blog answers a question.It may be stocks, bonds,commodity, real estate or anything else.Post your blog title  or a question, community will do research and answer the question to give you your own research report.It is 100%free , no registration is required to browse and ask questions.It's great for writers looking for article topic,and cool for investor looking for answers.

>>> faq

Top Contributors

UserPoints
suniljain10,440
admin2,990
rahul das2,460
anilmehta1,710
dipak1,540
rakeshseth1,500
himesh1,350
stockguru1,110
shah1,060
bharat_vora1,040
more

Become Askdalal Research Analyst

Are you an MBA (finance) students, economics students, or journalist with broad interest in stocks, investing and finance. Do you want to polish your skills before getting into job market ? Come join askdalal as Research Analyst.Email your resume to tripti.shah@askdalal.com.

If your resume is impressive you will get chance to show your talent,polish your skills and earn money along the way. At the convenience of sitting at your home computer. See rules for askdalal investment analyst.

Latest Dalal

  • rosenjack13
  • bangalore.scrap
  • bipin1987310
  • mohammed ilyas
  • mehta.a10