Investment Conclusion : Kotak Securities has put an overweight position in the power sector due to its solid earnings growth forecasts and low exposure to political instability. EPS growth in the sector is expected to accelerate in 1998 and 1999 which will follow the less-than-stellar earnings expected in 1997.

BSES's scrip has been put on a purchase list and is expected to appreciate by 38 per cent to Rs 309. BSES's aggressive expansion of generating capacity in Mumbai; pursuit of investment opportunities in generation and distribution outside Mumbai is likely to give a big push to its earnings. CESC is likely to show potential earnings turnaround from fiscal 1998; startup of budge budge plant will reduce reliance on WBSEB. The table below summarises the outlook for each of the three major power stocks.

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