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"The introduction of RTM trading would enable efficient price discovery for electricity and support grid balancing activities. This is especially significant in the context of rising share of renewable energy in electricity generation in India," ICRA Group Head & Senior Vice President - Corporate ratings, Sabyasachi Majumdar said.
Domestic cement demand registered a healthy growth of 14.2 percent Y-o-Y in Q1 FY2019. This buoyancy has however not been translated into improved financials for the sector.
Sugar production is likely to decline by 19 percent to 20.3 million tonne during sugar year (SY) 2017, due to poor rainfall during previous monsoon seasons in key producing states, ICRA today said in a report.
Sugar prices are expected to remain firm in the near term due to tight stock position following 9 percent decline in production and steady growth in consumption, rating agency ICRA said today.
A similar decline in prices post demonetisation was witnessed in the western markets wherein the price, after having recovered by Rs 15/bag in October to Rs 265/bag, slipped to Rs 240/bag in November 2016.
During April-September 2016-17, cement prices in the North were higher by around Rs 60-65 per bag, compared to the same period in 2015-16, ICRA said in a statement.
"In the next 3-4 quarters, any further increase from the current levels would depend on factors like expectations of sugar production during SY2017, sugar mills' own actions on supplies depending upon their inventory-holding capacity and government action on price control measures," he said.
"Cement demand growth will pick up to 6 percent in 2016-17 and further to 7 percent in 2017-18... during the current fiscal, it is likely to be driven by the pick-up in the infrastructure segment -- primarily road projects and housing segment," Icra Ratings Senior Vice President Sabyasachi Majumdar said.
The coal price hike announced by state-owned CIL is likely to result in an increase in cost of power procured by discoms, ICRA said in a statement.
The renewable energy sector has witnessed a record capacity addition of 6.9 GW during FY2016, which was driven by sizeable capacity addition in both the wind and solar energy segments, which stood at 3.3 GW and 3 GW respectively.
"We estimates domestic sugar production at around 25.5 million metric tonnes (MT) during the sugar year (SY) 2016, a decline of 10 per cent over the previous year. This was mainly driven by a drought in the largest sugar producing state Maharashtra," ICRA said in a statement here today.
Cement demand is likely to improve gradually in the medium term in line with the recovery in infrastructure, investment cycle and overall economy, it said. ICRA expects demand to grow by 6.5-7 percent during FY16 and the pace of recovery in cement industry is likely to mirror the trends in economic recovery.
