PTC's 1Q09 result was characterised by flat operating income and higher interest income. The recently concluded public issue of Rs12bn has increased the company's cash kitty very substantially, with the planned investments in subsidiaries yet to materialise. Power-trading income from long-term deals has yet to kick in, as such projects would start being commissioned only around end-FY09.
Valuation and target price
We value PTC India on a sum-of-the-parts basis (see table below). Investments in PTC Financial Services (PFS), Teesta Urja and Athena Energy Ventures are valued at a P/BV of 2x FY10F, in line with our valuation for NTPC. We value future investments in Global Fuels, the coal-trading company, at 1x FY09F book value due to the lack of clarity in this business (the Rs14.40/share value would have otherwise been on PTC’s balance sheet as cash).
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All the matter on this site has been taken from the reports prepared by certified analyst of various organisations. As per rules the reports are not posted the same day but after two days to protect the rights of subscribers. Non of the information posted here is my view or prepared by me.
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