Thermal power utilities seen reporting upbeat Q3 results

“Residential demand, driven by consumer durables, remains a driver, though our industry interactions suggest even industrial demand has seen some uptick,” said a recent report by Jefferies India.

State run NTPC is expected to gain significantly from rise in generation. The company produced 67.8 BU in Q3 — its highest ever quarterly generation till date, which is 10.4 per cent more than the production in the corresponding quarter in FY17. “NTPC is estimated to report 15 per cent year-on-year earnings growth following improvement in generation volumes on account of commercialisation of capacity,” a note by Edelweiss Securities said.

The spike in spot electricity prices turned out to be good news for thermal power companies which sell electricity in short-term markets. Average rate of electricity in the Indian Electricity Exchange (IEX) in Q3 was Rs 3.5/unit, which is 95 per cent more than more than the price of electricity in Q3FY17.

“JSW Energy’s profits are expected to remain robust, led by a 4 per cent growth in generation volumes on account of higher merchant sales,” Edelweiss said.

According to research agency Icra, 15.6 giga watt (GW) of coal-based operational power plants are dependent on the short-term market as financially troubled electricity distribution companies (discoms) have refrained from signing mid- and long-term power purchase agreements (PPAs) since the last four years. Companies with power plants having exposure to the merchant market include Adani Power, JSW Energy, Jindal Power, Torrent Power, Essar and Sembcorp. FE