Power generation up in March; companies poised to gain

During March, power generation for all of India stood at 70 British units (BU) (against 64.7 BUs a year ago), while overall plant load factor (PLF) was up by 139 basis points (bps) to 66.2% (against 64.8% a year ago). Coal- and lignite-based power generation increased by 2.1% year-on-year (y-o-y) to 50.4 BUs (72% of total generation) at PLF of 81% (down 372 bps y-o-y), whereas gas-based generation increased 34.4% y-o-y to 9.3 BUs (13% of total generation) at PLF of 73% (up 10.3%). Hydro power generation increased by 17.2% to 8.3 BUs, while nuclear power generation increased by 46.6% y-o-y to 2 BUs.During FY10, generation increased by 6.7% y-o-y to 765.8 BUs (against 717.9 BUs y-o-y). Coal-based generation increased by 5.2% y-o-y to 543.9 BUs (against 517.2 BUs y-o-y) at a PLF of 77.5% (up 21 bps y-o-y), whereas gas-based generation increased by 32.6% y-o-y to 96.6 BUs (against 72.9 BUs y-o-y) at PLF of 67.3% (against 57.6% y-o-y). During March, Adani Power Ltd (APL) has reported generation of 241.2 MUs from the two units of 330MW each at Mundra. The second unit of 330MW was commissioned in March, taking APL’s operating capacity to 660MW. We calculate PLF for the first unit at approximately 96% based on the reported generation (233 MUs). Generation from the second unit was insignificant during the month. During FY10, company has reported net generation of 1,612.5 MUs.During March, net generation of NTPC Ltd increased by 0.4% y-o-y at 20.1 BU (against 18.2 BU y-o-y), while PLF for thermal-based projects was down by 151 bps at 94.7%. During FY10, net generation of NTPC increased by 5.6% y-o-y at 218.56 BU (against 207 BU y-o-y). During March, Jindal Power Ltd’s (JPL) generation grew by 19.5% y-o-y to 693.7 MUs (against 580.8 MUs a year ago). PLF for the month of March stood at 93.3%. GVK Power and Infrastructure Ltd reported a PLF of 64.8% for its JP 1 and 2, while PLF for Gautami power project stood at 84.5%. GMR Energy Ltd’s Barge mounted plant was non-operational in March as the project is being shifted to Kakinada and would be commissioning in the current month, while the Chennai project reported increased PLF at 90.5% (against 86.6% y-o-y). The Vemagiri power project reported a PLF of 102.2% (against 39.1 y-o-y). JPL reported a PLF for Chhattisgarh power project at 93.3%, against 96.6% in March 2009. Reliance Infrastructure Ltd’s Dahanu project (500MW) reported PLF of 105.2% (against 105.6% a year ago), while PLF of Samalkot project (220MW) in Andhra Pradesh improved to 94.6% (against 63.8% a year ago). Kochi plant reported PLF at 45.3% against 82.9% a year ago. Tata Power Co. Ltd’s Trombay unit reported a PLF of 75.5%, against 93.6% y-o-y, while Karnataka independent power plant reported PLF of 75.1% (against 80.4% y-o-y). Tata Steel Ltd’s captive power plant operated at 77.8% PLF (against 85.9% y-o-y). For the week ended 11 April, short term trading prices stood at Rs7.60 per unit, against Rs5.70 per unit a month ago for the week ended 14 March. During the week ended 4 April, short-term trading prices moved southwards and stood at Rs4.90 per unit. We believe the movement of short-term trading prices is largely seasonal in nature.