Power sector results preview for Q4FY13: Angel Broking

Angel Broking has come with its March`13 quarterly earning estimates for power sector. According to research firm the power sector is currently facing many headwinds such as fuel shortage, delay in land acquisition, and environmental clearances among others.

During 11MFY2013, the overall power generation in India rose by 4.1% yoy to 831.4BU, aided by a 12.6% yoy increase in installed capacity to 214,630MW.

During this period, thermal power generation grew by 7.7% yoy to 691.6BU while hydro power generation declined by14.0% yoy to 104.9BU. The decline in hydro power generation is due to decline in water levels at reservoirs feeding hydroelectric stations. Nuclear power generation posted a growth of 2.5%
 yoy to 30.2BU.

The country continues to face a power deficit due to delays in capacity addition on account of domestic fuel shortage, holdup in clearances as well as deficiencies in the transmission & distribution (T&D) system. India's overall and peak power-deficit levels during 11MFY2013 stood at 8.8% and 9.0% respectively, as against 8.3% and 11.2% reported in 11MFY2012.

The power sector is currently facing many headwinds such as fuel shortage, delay in land acquisition, and environmental clearances among others. The government has shown its intent on reforms with restructuring plans for state electricity boards (SEBs) and setting up Cabinet Committee on Investment (CCI) to fast track projects. If the government continues with its emphasis on implementation of policies such as Captive Coal Allocation Policy and Land Acquisition Policy along with focus on other supportive measures, then it will be a positive for the sector in the medium to long term. We recommend Accumulate rating on GIPCL and NTPC.

	Net Sales (Rs Cr)		Net Profit (Rs Cr)
	4QFY13E	% chg	4QFY13E	% chg
GIPCL	341	28.3	55	39.4
NTPC	16,947	4.2	2,811	8.4

 

 

 

 

 

 

 

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.