Shares of power generation and utilities companies were in focus with the S&P BSE Power index gaining nearly 2 per cent on the BSE in Thursday’s intra-day trade on expectations of higher electricity demand.
At 10:06 AM; the S&P BSE Power index, the second largest gainer among sectoral indices after Utilities index, was up 1.64 per cent, as compared to 0.14 per cent rise in the S&P BSE Sensex.
NTPC, Adani Power NHPC, Torrent Power and Tata Power from the index traded higher by 3 per cent each. KPI Green Energy, NLC India, Nava, Inox Green Energy Services, Power Grid Corporation and CESC among power and its related companies were up 1 - 4 per cent.
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Ratings agency ICRA projects the full-year demand growth for FY24 at a modest 5.0-5.5 per cent, slightly lower than its expectation for the GDP growth for this fiscal (6.0 per cent), with unseasonal rains having dampened demand over the past two-and-a-half months.
Moreover, the likelihood of El Nino in FY24 may have a positive impact on electricity demand. While the estimated demand growth for FY24 is higher than the historical average seen over the past 10 years, it is lower than the peak of 9.6 per cent reported in FY23, which was supported by a severe heat wave, favourable base, and a revival in economic activity.
The rating agency expects a sustained growth in electricity demand to improve the visibility on the signing of new power purchase agreements (PPAs) for the thermal IPPs.
ICRA projects the all-India thermal plant load factor (PLF) level to improve to 65.1 per cent in FY24 from 64.2 per cent in FY23, led by the growth in electricity demand and limited thermal capacity addition.
ICRA’s outlook for the thermal power segment is Stable, supported by the healthy improvement in the thermal PLF, coupled with the reduction in dues from state distribution utilities (discoms), following the implementation of the Late Payment Surcharge (LPS) scheme. Amid marginal tariff hikes approved for the discoms for FY24, ICRA’s outlook for the power distribution segment remains Negative.
Among individual stocks, NTPC hit over five-year high at Rs 184.30, and rallied 4 per cent amid heavy volumes. The stock of state-owned power generation company was trading at its highest level since November 2017. It surpassed its previous high of Rs 182.80, touched on November 1, 2022.
Shares of Torrent Power hit a new high of Rs 745, surged 7 per cent in intra-day trade today. In past two trading days, the stock of integrated power utilities company zoomed 22 per cent after the company has signed a memorandum of understanding (MoU) with the Maharashtra government for setting up three Pumped Storage Hydro Projects of 5,700 MW capacity in Maharashtra.
The projects would entail an investment of about Rs 27,000 crore. Torrent plans to execute these projects over a period of five years. All the sites are off-stream and the projects are planned to provide a minimum of six hours of energy storage on a daily basis.
The projects would be executed at three sites identified by Torrent namely Karjat (3,000 MW) in Raigarh District, Maval, (1,200 MW) and Junnar (1,500 MW) in Pune District. All the sites are off-stream and the projects are planned to provide a minimum of six hours of energy storage on a daily basis.