Real-time Stock quotes, portfolio, LIVE TV and more.
Dec 16, 2011, 12.30 PM IST
Motilal Oswal has come out with its report on utilities. "We remain cautious on private IPPs and CPSUs remain our preferred sectoral theme. Buy NPTC/Powergrid."
Motilal Oswal has come out with its report on utilities.
Reliance on ST power, ensuing state elections could mean continued higher losses: ST power for UPDISCOMs has increased from 4% of total in FY09 to 10% in FY10. UP remains the highest procurer of ST power in 1HFY12, with market share at ~30%. State elections in early 2012 and higher ST power purchases could entail continued higher losses. There could be delay in tariff hike, as the petition is still not filed. Several power developers have already indicated delayed payment receipts from the state and PTC India recently stated that it is no longer taking counterparty risk for the state. Reduction in losses calls for structural improvement in efficiency more than tariff increases, in our view.
LT capacity increase of 2x could curtail losses, focus on efficiency improvement critical: UP's long-term power availability would increase by 13-15GW over the next three years v/s FY10 power purchase of 56BUs (8-9GW), leading to increased self-sufficiency. Reported gap between aggregate revenue requirement (ARR) and aggregate cost of supply (ACS) remains at INR1.3/unit. This is largely due to constrained revenue collection and higher AT&C losses at 40%. As per FY10 tariff order, UPDISCOMs' underrecovery should have been minimal. Our calculations also indicate that an "efficient" UPDISCOM does not require meaningful tariff hikes.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
Action in PTC India
May 23 2013, 16:33
- in Asian markets
May 23 2013, 09:33
- in Technicals