Power stks extend rally; Torrent Power, JSW Energy, Power Grid at new highs

Shares of power generation and distribution companies continued their upward movement, with Adani Power, Torrent Power, JSW Energy and Power Grid Corporation hitting their respective all-time highs on the BSE in intra-day trade on Wednesday amid strong demand. Tata Power Company, CESC, Bharat Heavy Electricals (BHEL) and NTPC were quoting at their respective 52-week high levels.

At 12:26 pm, the S&P BSE Power index was up 2.9 per cent at 3,070 points, as compared to a 0.26 per cent rise in the S&P BSE Sensex. Thus far in the month of June, in seven trading days, the power index has rallied 9 per cent, as against a 1 per cent rise in the benchmark index. The BSE Power was trading at its highest level since November 2010.

Among individual stocks, Tata Power soared 13 per cent to Rs 132.50 on the back of over a 5-fold jump in trading volumes. A combined 231 million shares, representing 7 per cent of the total equity of Tata Power had changed hands on the NSE and BSE at the time of writing this report. Power Grid Corporation hit a 52-week high of Rs 244.45, up 4.5 per cent after the state-owned electric utilities company said it has acquired transmission project SATL, which will evacuate electricity from 8.1GW solar energy zones in Rajasthan.

India's power consumption grew 12.6 per cent billion units (BU) to 25.36 BU in the first week of June. Power consumption for the same period a year ago was 22.53 BU. This was, however, 3.35 per cent lower on a monthly basis from 26.24 BU, consumed in the first week of May this year. Peak power demand was recorded at 168.72 GW on June 7, up 15 per cent from last year's 146.5 GW.

Meanwhile, the Ministry of Power (MoP) released a discussion paper on the implementation of Market-Based Economic Dispatch (MBED) which argues for redesigning of day-ahead scheduling of electricity markets in the country on a market based or integrated approach in order to realise the ‘One Nation, One Grid, One Frequency, One Price’ framework.

According to ICICI Securities, MBED will benefit both generation and distribution companies as it is a wider scoped SCED, which is already operational, and will result in more efficient utilisation of low cost generating capacity across the country, and thereby, reduce tariffs for discoms and consumers.

Commenting on the outlook for the financial year 2021-2022 (FY22), CARE Ratings said power generation and consumption is expected to improve in FY22 with the anticipated higher levels of economic activity amid optimism that the vaccination programme would facilitate normalisation and stimulate economic recovery. At the same time, the uncertainty pertaining to the effective control of the pandemic and the likelihood of prolonged restriction being imposed across regions poses a risk to the sustainability in economic revival and thereby power demand, the rating agency said.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
Adani Power	167.05	151.90	9.97
Tata Power Co.	128.50	117.00	9.83
CESC	790.15	758.35	4.19
Torrent Power	487.60	468.50	4.08
Power Grid Corpn	243.50	234.00	4.06
NTPC	120.85	116.15	4.05
B H E L	78.25	75.75	3.30