Hold JSW Energy, says Subhadip Mitra

Subhadip Mitra, Power Analyst - Institutional Equities Research of JM Financial told CNBC-TV18, "If I am looking at the sector from a macro level what you would be also looking at is the fact that the entire governing machinery is now concentrating on first having tacked the coal shortage problem. They are looking at the power demand problem or the artificial deficit in demand of power that you are looking at because of the SEB issues. Now, given that the government has charted out the Uday revival plan on the SEB side one is looking at a revival on the demand from the SEBs or the discoms coming in possibly over the next 12-18 months. So, that should also overtime induce greater power purchase agreement (PPA) signing and as well as have greater transmission capabilities coming in and hence probably reduce the merchant market as well.""On JSW Energy we do have a hold rating because we believe that the company will over a period of time move towards signing more PPAs at PPA prices which tend to be lower than what the merchant arbitrage that they have been enjoying for the past two or three years," he added.