Here's why Mayuresh Joshi is bullish on power stocks

economictimes.indiatimes.com:

«I think a lot of market participants were anticipating this part of the news and therefore I think once the news is probably out we are seeing some element of profit booking happening on that counter,» says Mayuresh Joshi, William O'Neil India.Just want to discuss ITC with you and how is it that you are looking at the hotels demerger news? It was well known in the market, we reported it as well that something like this was in the offing and now the way the Street is actually reacting to this particular news almost like a sell on news kind of story? Absolutely. I think a lot of market participants were anticipating this part of the news and therefore I think once the news is probably out we are seeing some element of profit booking happening on that counter.

The other bit with the news itself, a large element of what the news probably exhibits is that ITC will hold 40% odd in the hotel business itself. So the hotel business will become effectively an associate company for ITC.

And since 60% of the hotel business will be held by minority shareholders, there will be some element of a holding company discount. Now that can tune to anywhere between 20 to 40 or 50% depending on how analysts are probably viewing that.

And that is one more reason why the stock is probably down. So I think both in the news, as well as the expectations in terms of being held by 40% by the parent company itself, entailing a holding company discount for minority shareholders.What are your thoughts as far as the power stocks are concerned, SJV and NHPC and even the financiers were talking about, REC, PFC? I think they are in fine fettle for all the reasons.

I think asset-quality pressures, both for PFC, REC, have come off quite significantly. I