Unless the issues are resolved or any government policy action is brought in the headwinds for the sector are to continue for some time now. The sector as a whole has been corrected downwards 36% from the Oct 2010 highs till date. Going forward the weakness in the sector is to continue.
Companies like NTPC, Tata Power, Adani Power and Reliance power look weak, while NHPC looks good on longer term perspective. The business model for NHPC is different with focus on hydro power generation which is a growing need of an hour as the generation capacity is skewed towards thermal power. NHPC will also not be influenced by the on going concerns of thermal segment directly. We already have coverage on the stock with a price target of Rs. 33.
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