Power stocks charged up on rising economic activity and demand

Despite hurdles faced by sector, Street appears bullish

Power consumption has a very strong link with economic activity and it’s showing very positive signs. This is seen in the stock market performance of utilities, and other power companies, which have jumped 13 per cent on the Nifty Energy index over the last month.

In August, power demand rose by 4 per cent over July and 18 per cent over August 2020 while peak demand touched 196 Gw. Thermal generation rose by 4 per cent month-on-month. This also meant that coal demand rose and coal prices too, though the rise in domestic prices is lower than in the international arena.