Leaving aside a company or two, stocks of all power sector players are up since the 2013-14 Budget. Their financial performance however tells a different tale. While many managed to grow their revenue, a smaller number posted higher profits in 2013-14, compared to year-ago.

A multitude of factors ranging from fuel (coal and gas) shortage to rising coal price and unviable power tariff have been weighing down the sector. Power producers have also borne the brunt of delayed statutory approvals for their captive coal mines. Many power plants have been forced to operate at below-capacity levels for want of sufficient fuel. But, some such as Power Grid Corporation of India have been largely unaffected by these concerns. The stock is up and justifiably so.

Many power sector stocks rallied in the run up to the Lok Sabha elections in the hope that a pro-reform Modi-led Government would resolve the problems ailing the sector.

Apart from this, favourable decisions by the sector regulator, the Central Electricity Regulatory Commission (CERC), too has seen some stocks gaining. For instance, the stocks of Tata Power and Adani Power, which cheered the CERC compensatory tariff order of February 2014. It has allowed the companies’ loss-making power plants at Mundra in Gujarat, to charge higher tariffs. Unviable tariffs for these plants have seen the companies end in red. The order has however been challenged at the Appellate Tribunal for Electricity. Tackling coal shortage and doing away with delays in project clearances are some tasks that the new Government needs to take upon itself to help this sector.

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