Rs 50 share: Buy PTC India stock, say experts; here are reasons why

Rs 50 share: In today's suggestion for trading in stock market, Zee Business has selected Rs 50 category share of PTC India because of a few major triggers related to this key stock. According to the Zee Business report, last week the news came that the company is all set to sell its stake in two of its subsidiaries, PTC Financial Services and PTC Energy, to raise a capital of Rs 2000 crore. With a market capitalisation of Rs 1600 crore, this raised amount would stands more than it's market cap.

Among other triggers, FPIs too are giving a attention to PTC India - it has recently increased FPI share from 29 per cent to 38 per cent. Further, the power firm has also managed to reducer its debt for the first time in the FY 19. The company want to reduce its debt more, and the raised up capital is also stated to contribute.

Looking at dividends of PTC India, it is assessed that in the next two years of FY 21 and FY 22, the company is set to have dividend yield of 5 to -6%, according to the report, adding that the government's scheme of Power for All is also positive for the the company.

The picture is very attractive over a period of time as PTC India's trend of profit growth is stable. In FY 16 it posted Rs 586 cr, in FY 17-Rs 506 crore, in FY-18 Rs 404 crore, while in FY 19 it has posted Rs 490 crore.

सिर्फ ₹50 में PTC इंडिया कराएगा दोगुनी कमाई@AnilSinghvi_ @KushalGupta44 pic.twitter.com/vzFDZ7AZKk

— Zee Business (@ZeeBusiness) October 9, 2019

The brokerage firm Quantum securities has given a 'buy' call with a target price of Rs 115. Elara Capital is also positive about the prospects of the company, giving a price target of Rs 84. Notably, the PTC India stock is today trading at Rs 55.

Risk factors

Among the key factors that may affect PTC India is the delay in stake sale of its subsidiaries as it will lessen the company's valuation. Further, cut in power tariff rate will hit also it's margins.

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If state discoms or state electricity boards fail to pay their bills, the PTC India's working capital can increase, the report added.