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August all-India generation up 9%, PLF up 212bp YoY
FY12 monsoon period hydro generation up 25%+ YoY
Sector observations
In August 2011 all-India generation grew 9% YoY to 72BUs, led by an increase in
installed capacity by 14GW over the past 12 months and higher PLF of nuclear and
hydro plants.
PLF for coal and gas plants were down 184bp and 231bp YoY respectively but they
were up 11ppt and 19ppt YoY for hydro and nuclear plants.
Most important, the average generation growth in the system was 9.1% since January
2011, much better than generation in previous months. Generation growth was aided
by higher hydro-power generation. During the FY12 monsoon period (June-August)
hydro power generation grew by over 25% YoY.
Performance of key companies
Adani Power synchronised its second unit of the Mundra Ph-III, from 1.9GW capacity
it generated 1.3BUs and reported PLF of 85% (against 62% in July 2011).
JSW Energy generated 874MUs, down 8% MoM. The Rajwest plant, awaiting approval
of a tariff hike (existing tariff ceiling INR2.4/unit) from the RERC, was closed for the
third consecutive month.
Jindal Power generated ~662MUs down 8% YoY and PLF dipped 750bp YoY to
89%. Lower generation was led by plant maintenance shut-down of two units.
Lanco Infratech Udupi PLF improved MoM to 64% but Kondapali PLF dipped to 44%
(against 77% in July 2011, 73% in August 2010).
NTPC's August generation was 17BUs (down 3% YoY) of which coal and gas plant
generation was lower by 2% and 13% YoY respectively. The PLF of the coal plant was
down 351bp YoY at 79%
ST prices range bound
The IEX average ST price for the week to September 05 was INR2.7/unit against INR3.1/
unit a month earlier. Since the start of FY12 IEX prices moved in a INR2-4/unit range.
Valuation and view
The power sector has seen significant valuation de-rating due to concerns over delayed
capacity additions, merchant prices, lower demand and fuel supply issues. We are positive
about companies that are relatively better positioned on these fronts. Our top picks in the
sector are NTPC, Powergrid and Coal India and among mid-caps we prefer CESC.
NTPC: Generation down 3% YoY led by lower coal, gas plant generation
NTPC's August generation was 17BUs (down 3% YoY), of which coal plant generation
was 15BUs (down 2% YoY) and gas plant generation was 2BUs (down 13% YoY).
The August PLF of the coal plant was 79% against 83% a year earlier. Out of 15 coal
stations, PLF was down MoM for 10 stations. The maximum fall was of 20ppt at the
Farakka plant to 59%, given logistics issues such as availability of imported coal.
Gas plant PLF was 63% against 72% a year earlier. Out of seven gas stations the
PLF for four fell MoM.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
August all-India generation up 9%, PLF up 212bp YoY
FY12 monsoon period hydro generation up 25%+ YoY
Sector observations
In August 2011 all-India generation grew 9% YoY to 72BUs, led by an increase in
installed capacity by 14GW over the past 12 months and higher PLF of nuclear and
hydro plants.
PLF for coal and gas plants were down 184bp and 231bp YoY respectively but they
were up 11ppt and 19ppt YoY for hydro and nuclear plants.
Most important, the average generation growth in the system was 9.1% since January
2011, much better than generation in previous months. Generation growth was aided
by higher hydro-power generation. During the FY12 monsoon period (June-August)
hydro power generation grew by over 25% YoY.
Performance of key companies
Adani Power synchronised its second unit of the Mundra Ph-III, from 1.9GW capacity
it generated 1.3BUs and reported PLF of 85% (against 62% in July 2011).
JSW Energy generated 874MUs, down 8% MoM. The Rajwest plant, awaiting approval
of a tariff hike (existing tariff ceiling INR2.4/unit) from the RERC, was closed for the
third consecutive month.
Jindal Power generated ~662MUs down 8% YoY and PLF dipped 750bp YoY to
89%. Lower generation was led by plant maintenance shut-down of two units.
Lanco Infratech Udupi PLF improved MoM to 64% but Kondapali PLF dipped to 44%
(against 77% in July 2011, 73% in August 2010).
NTPC's August generation was 17BUs (down 3% YoY) of which coal and gas plant
generation was lower by 2% and 13% YoY respectively. The PLF of the coal plant was
down 351bp YoY at 79%
ST prices range bound
The IEX average ST price for the week to September 05 was INR2.7/unit against INR3.1/
unit a month earlier. Since the start of FY12 IEX prices moved in a INR2-4/unit range.
Valuation and view
The power sector has seen significant valuation de-rating due to concerns over delayed
capacity additions, merchant prices, lower demand and fuel supply issues. We are positive
about companies that are relatively better positioned on these fronts. Our top picks in the
sector are NTPC, Powergrid and Coal India and among mid-caps we prefer CESC.
NTPC: Generation down 3% YoY led by lower coal, gas plant generation
NTPC's August generation was 17BUs (down 3% YoY), of which coal plant generation
was 15BUs (down 2% YoY) and gas plant generation was 2BUs (down 13% YoY).
The August PLF of the coal plant was 79% against 83% a year earlier. Out of 15 coal
stations, PLF was down MoM for 10 stations. The maximum fall was of 20ppt at the
Farakka plant to 59%, given logistics issues such as availability of imported coal.
Gas plant PLF was 63% against 72% a year earlier. Out of seven gas stations the
PLF for four fell MoM.
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