Battered Sembcorp turns to India as Singapore power outlook dims

Is it time to revisit this struggling stock?

Sembcorp's share price has crashed by a steep 28% since it unveiled its disappointing Q1 results in April. After posting surprisingly decent Q2 numbers, analysts note that it may be time to take a second look at Sembcorp's shares.

DBS said in a report that India's power sector will drive the company's growth in coming quarters, particularly as Singapore's power outlook dims.

"While the Singapore power business remains under pressure, we could expect the ramp-up in India power
plants to drive sequential improvement," DBS said.

For instance, the first unit of TPCIL’s power plant in India, is likely to breakeven this year and contribute to SCI’s bottomline from 2016 onwards.

"This would mitigate earnings decline from Singapore power plants. Elsewhere, other overseas utilities businesses
are expected to be stable this year," DBS said.

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