Recommendation from Banking and Power Generation/Distribution Sector

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations.

UNION BANK OF INDIA
CMP - ₹104.55
BSE CODE 532477
Volume 1,30,449
Face Value ₹10
Target ₹117 - 121
Stoploss ₹99 (CLS)

Union Bank of India stands as one of the leading public sector banks in the country. As of September 30, 2023, the bank's total business amounted to ₹19,84,842 crore, with deposits reaching ₹11,37,628 crore and advances totalling ₹8,47,214 crore. In Q2FY24, the bank experienced an impressive year-on-year growth of around 25 per cent in interest earned, reaching a total of ₹24,586 crore, compared to ₹19,681 crore in the corresponding quarter of the previous year. The total income showed a remarkable surge of 23 per cent, and the net profit soared by over 90 per cent to reach ₹3,511 crore. The key drivers of growth include initiatives to enhance asset quality and a reduction in NPAs. Concurrently, improved balance sheets and increased demand are contributing to the expansion of bank loan growth. With shares witnessing an impressive surge of over 70 per cent in the past year and considering the robust financial performance and sustained growth, there is potential for further growth. Hence, we recommend BUY. 

PTC India Ltd
CMP - ₹148.40
BSE CODE 532524
Volume 1,42,591
Face Value ₹10
Target ₹167 - 172
Stoploss ₹142 (CLS)

PTC India Ltd, an initiative of the Government of India, holds the distinction of being the trailblazer in establishing a power market in the country. Since its inception, the company has consistently maintained its leadership position in power trading. Additionally, PTC has been entrusted by the Government of India with the responsibility of trading electricity with Bhutan, Nepal, and Bangladesh. Assessing the financial performance of the company on a standalone basis, it reflected a modest growth of 6.04 per cent from ₹4,602.44 crore in Q2FY23, reporting a total revenue of ₹4,880.40 crore in Q2FY24. In contrast, the net profit witnessed a substantial surge of 113 per cent, reaching ₹133.35 crore, compared to ₹62.52 crore in the corresponding quarter of the previous year The shares have already provided investors with a remarkable 109 per cent return and are currently experiencing increased buying interest. Given the company's strong standing within the sector and its potential for future growth, we recommend BUY.