Power -Sharp m-o-m increase in generation in Oct’10: IDFC Sec

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Power
Sharp m-o-m increase in generation in Oct’10



Overall generation for Oct’10 has increased 8.9% yoy, and also 9.7% on m-o-m basis to 70,558mn
units. Coal-based generation (68% of total generation) grew 7.8%yoy, while NTPC’s coal based
generation (35% of total coal-based generation) grew 9.3%yoy. NTPC’s PLFs improved to 88.6% in
Oct’10 (86% in Oct’09) from 79.15% in Sept’ 10. Hydro power generation also grew 9.2%yoy as strong
monsoon this year has led to higher reservoir levels. The key highlights of generation of various
power producers are as follows.
• The average PLF of NTPC’s plants improved to 88.6% in Oct ‘10, from 79.15% in Sept ’10 (lowest
levels in past three years), as annual maintenance shutdowns during monsoon appear to have
completed. Generation increased 7.4%yoy to 18,916 mn units.
• Adani Power reported 670 mn units generated from 990MW capacity. PLFs have improved to
91% from ~72% in Sept’10 (first 330MW unit at Mundra-I&II plant that was shutdown in
September for ~5 days for maintenance). Similar to high PLFs observed for first two units during
previous months, the third 330MW unit added recently also appears to be operating at high
PLFs.
• Lanco Amarkantak (600MW) reported sharp improvement in performance (37.8% m-o-m), as
Unit-1 (300MW), which was partially shutdown earlier due to maintenance activities, is now
generating at pre-shutdown levels. Lanco Kondapalli (716MW) and Aban Power (220MW) are
operating at implied PLFs of 80 % and 94% respectively.
• Lanco’s Udupi power plant phase-I (600MW) is ramping up generation. Generation for month of
October 2010 was 121 mn units, compared to 120 mn units in September, 36 mn units in August
and 33 mn units in July 2010 respectively. We expect the load factor (currently 28%) to improve
going forward, as the plant stabilizes.
• GVK’s Jegurupadu-I is undergoing major maintenance as scheduled which is expected to
continue till 4QFY11. Consequently, generation has decreased 9.5%yoy and 4%m-o-m to 262mn
units.
• Tata Power’s 1,580MW Trombay plant generation improved sharply by 21.7% m-o-m to 875mn
units. Generation at the plant had been falling m-o-m since May 2010, when generation had
peaked at 1,000mn units. However, generation is now again increasing on m-o-m basis (28%
m-o-m increase over Sept’ 10 generation).



Summary
Monthly power generation improved sharply on m-o-m basis (10%) in October 2010. Several NTPC’s plants had
reported lower generation last month (Sept ’10), likely due to scheduled maintenance shutdowns during monsoon
season and also maintenance shutdowns to ensure steady generation during Commonwealth Games held in
October. Post completion of maintenance activities, the plants have operated at high PLFs in October. Among the
private power producers, recently commissioned capacities of Lanco and Adani appear to have ramped up
generation, resulting in higher PLFs during the month. We remain Overweight on the sector with our top picks
being Adani Power, Lanco Infratech and KSK Energy.