The early onset of Summer in India has raised the demand for power. Adding to this is the surprise surge in use of electric cookware and battery infrastructure due to the ongoing LPG crisis due to the war in West Asia.
India’s Coal Ministry has stated that the country’s Coal stock of 210 MT is adequate for 88 days. Until recently, power demand had remained subdued due to persistent rains, followed by the winter months, with the figure staying at 245 GW in the current financial year, much below the earlier projected demand of 270 GW.The PLF of thermal power plants is over 70%, compared to around 25% for solar and wind energy installations.
Brokerage firm Morgan Stanley in a note wrote that thermal coal-based power generation could take incremental load due to the surge in power demand and that such a move would support a smoother ramp-up in thermal coal power.
The brokerage expects Adani Power and JSW Energy to benefit from strong merchant earnings, while Tata Power could benefit from the Mundra issue settlement or Section 11 of the Electricity Act. NTPC’s multiples could also re-rate demanding on peak deficit conditions, as per Morgan Stanley’s note.
Shares of NTPC Green Energy are trading 15% higher at ₹99, while JSW Energy is trading 7.5% higher at ₹524.3. Adani Power shares have extended their gains to 6%, while Tata Power and CESC are trading with gains of up to 5% each.
(With Inputs From Abhimanyu Sharma & Vivek Iyer)
