Power stocks badly hit

Power stocks have been hit badly today, with PFC leading the losers, down almost 5% at Rs.244.50, with an intra day low at Rs.243. Jindal Steel & Power is also down 4.5% and Reliance Power is down over 4%.

Power stocks fell, reacting to the Supreme Court ruling yesterday, that the allocation of around 200 coal blocks between 1993 and 2009 were illegal. This, for now does not bode too well for the sector as it could affect the profitability of the companies, forcing companies to probably import coal. But more than coal companies, it is the power finance companies, REC and PFC which will have a negative impact.