Stock Pick: PTC India

PTC India is a Government of India initiative, which is a pioneer in starting the power market in India. The company has maintained its leadership position in power trading since inception. However, growing competition with lower entry barrier, has led to a decline in PTC’s market share going down to 30 per cent at present.
The company operates at a very small margin of 4–7 paisa per unit, which exposes it to the risk of receivables for its short term, which does impact its working capital cycle. However, the two subsidiaries PTC India Financial Services (PFS) and PTC Energy show great potential and make major contribution to PTC India’s growth.

olmdesk@outlookindia.com