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KSK Energy Ventures Ltd

We spoke to the management of KSK Energy Ventures Ltd (KSK), which is into 
developing and operating power plants for industrial and state-owned consumers. 
The company has aggressive expansion plans of increasing the current 
operational capacity of 144MW by 64x to 9,137MW by FY13. The business model of 
the company is innovative and well-knit. KSK makes sure that its power plants 
have fuel linkages and long-term off-take arrangements in place. On the 
flipside, KSK faces execution risk due to the sheer magnitude of the expansion 
plan ned. At CMP Rs229, KEC trades at adjusted trailing P/E of 69.6x and P/BV 
of 4.1x. The valuations are at a significant premium to industry average and 
fully factor the potentially superior earnings growth of the company. 

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