Fitch:Plant utilisation continues to be a problem for power

India’s power generators continue to face low and declining capacity utilisation, mainly because financially stressed power-distribution companies are unable to purchase power. This underscores the importance of successfully addressing the power distributors’ financial health. For the first half of the financial year ending March 2016, the overall coal-fired plant load factor (PLF) in India fell 3.2pp yoy to 60%, with that of central-government-owned generation companies (gencos) falling 1pp yoy to 72%, state gencos’ falling 5pp to 55% and private gencos’ down 2.3pp to 57%. The country’s gas-based PLF for the period was unchanged at a low level of around 22%. The 7pp increase in private gencos’ PLF to 19% was offset by the 5.3pp drop in central gencos’ PLF to 23% and a 2.9pp fall for state gencos to 23%. It is primarily fuel unavailability that led to gas-based capacity either stranded or operating at grossly sub-optimal levels. Separately, the country’s thermal power-generation capacity has increased by an impressive 11% over the last year to 194GW at end-September 2015, driven by the addition of coal-fired power plants and privately owned facilities. Disclaimer: ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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