Stock Movement

Performance of key power companies in the past one year

The Bombay Stock Exchange (BSE) Power Index tracks the share prices of 18 power companies operating across various segments of the industry and is weighted by free-float capitalisation. Over the past 12 months, it plunged 5.48 per cent, from 2,264.73 points on September 1, 2017 to 2,140.72 points on August 31, 2018. During the same period in the previous year, it had posted positive returns of 8.76 per cent. Transmission major Adani Transmission and Torrent Power, one of the biggest private integrated utilities, were among the best stock performers during the review period. At the bottom of the chart meanwhile, were equipment players Suzlon Energy Limited, Bharat Heavy Electricals Limited (BHEL), CG Power and Siemens India.

An overview of the stock market performance of key power companies during the period September 1, 2017 to August 31, 2018…

Generation companies

Generation companies registered a return of 5.33 per cent (unweighted average) in the current review period, which is a significant decrease in terms of growth as compared to their previous year’s performance, when they recorded a reasonable return of 11.03 per cent.

NTPC Limited, the largest power generator in India with an installed capacity of 53 GW, reported much lower returns, with its stock price increasing by only 1.61 per cent as compared to a 6.33 per cent rise during the same period in the previous year. Some of the major highlights for NTPC were the commissioning of a 500 MW unit of the Unchahar thermal power station (TPS), two 800 MW units of the Kudgi TPS, an 800 MW unit of the Lara Super TPS and a 660 MW unit of the Meja TPS. Recently, it also acquired the entire stake in its two joint ventures (JVs) with the Bihar State Power Generation Company. In 2017-18, NTPC achieved a stand-alone generation of 265.8 billion units (BUs), the highest ever in a year for the company, registering an increase of 6.19 per cent over the previous year. Its plant load factor (PLF) stood at 77.9 per cent, marginally lower than that recorded in 2016-17 (78.59 per cent), but still far better than the national average PLF of 60.7 per cent. It has a capacity of around 21,071 MW under construction. NTPC’s consolidated revenues increased by 7.36 per cent, from Rs 820.42 billion in 2016-17 to Rs 880.83 billion in 2017-18. However, its profit after tax (PAT) showed a decline of 4.88 per cent and stood at Rs 99.41 billion in 2017-18 as compared to Rs 104.51 billion in 2016-17.

NHPC Limited, the country’s largest hydropower producer, witnessed a drop of 12.28 per cent in its share price in the current review period as compared to a 5.23 per cent increase during the same period in the previous year. As of September 2018, it has an installed capacity of 7,071 MW. The company successfully commissioned its Kishanganga hydroelectric project in Jammu & Kashmir and its first 50 MW solar photovoltaic (PV) project in Tamil Nadu in the past year. It also has an under-construction hydro capacity of about 3,800 MW. NHPC achieved a plant availability factor of 85.32 per cent during 2017-18, against 83.41 per cent during the previous financial year. Its stations recorded a generation of 22,975 MUs during the year, marginally lower than that in 2016-17, when it generated 23,275 MUs. NHPC’s consolidated income stood at Rs 88.52 billion in 2017-18 as compared to Rs 101.25 billion in 2016-17, recording a 12.57 per cent decline. It also registered a decline in PAT of 20.29 per cent, from Rs 34.8 billion in 2016-17 to Rs 27.74 billion in 2017-18.

The largest private sector power producer, Tata Power, experienced a capital loss of 3.95 per cent during the period under review. The company has an installed capacity of about 10,700 MW, of which 294 MW was added to its portfolio in 2017-18. The major projects commissioned in the past year include two solar projects (of 100 MW and 50 MW capacities) at the Pavagada solar park in Karnataka, a 25 MW project at the Charanka Solar Park in Gujarat and a 30 MW solar project at Satara in Maharashtra. The company’s generation crossed 53,500 MUs in 2017-18 for the first time. Its total income in 2017-18 was Rs 297.63 billion as against Rs 281.73 billion in 2016-17, a growth of 5.64 per cent. Meanwhile, its net profit more than doubled to stand at Rs 26.79 billion in 2017-18 as compared to Rs 10.99 billion in 2016-17.

JSW Energy Limited registered an increase in returns of 8.66 per cent in its share price in the review period. Its installed capacity as of September 2018 stands at 4,543 MW. In 2017-18, the company’s net generation stood at 21.82 BUs and its PLF at 64.53 per cent. As part of its strategy to expand, JSW Energy is enhancing its presence in the renewable energy space, especially solar, as well as the electric vehicle (EV) and associated business of electrical battery/storage systems and charging infrastructure. The company plans to undertake an investment of over Rs 10,000 million in each of the two businesses in the current fiscal. Its total income (consolidated) increased marginally and stood at Rs 85.13 billion in 2017-18 as compared to Rs 84.8 billion in 2016-17. Meanwhile, it registered a profit of Rs 0.85 billion in 2017-18 as compared to Rs 6.22 billion in 2016-17, recording a decline of 86.33 per cent.

Adani Power Limited registered an increase of 8.59 per cent in its share price during the review period. It has an installed capacity of 10,480 MW. The average PLF achieved during 2017-18 was 55 per cent as against 70 per cent achieved in 2016-17. This reflected in the company’s energy sales, which stood at 48,005 MUs in 2017-18 as compared to 60,194 MUs in 2016-17. The company’s revenues stood at Rs 210.93 billion in 2017-18, declining by 8.43 per cent from Rs 230.34 billion in 2016-17. The company’s net loss registered some improvement to stand at Rs 21.19 billion in 2017-18 as against a net loss Rs 61.74 billion in 2016-17.

CESC Limited witnessed a decline of 4.31 per cent in its share price. The company’s total generation in 2017-18 stood at 6,337 MUs as compared to 6,053 MUs in 2016-17, recording an increase of 4.7 per cent. The total units sold during 2017-18 were 10,350 MUs as compared to 9,509 MUs in 2016-17 and the PLF was 64.3 per cent and 61.4 per cent in 2017-18 and 2016-17 respectively. The company’s consolidated revenue stood at Rs 79.39 billion in 2017-18 as against Rs 73.66 billion in 2016-17, registering an increase of 7.78 per cent. Moreover, PAT increased by 16.6 per cent, jumping from Rs 2,800 million in 2016-17 to Rs 3,265 million in 2017-18.

  During the current review period, Torrent Power’s share price increased by 25.09 per cent. The positives in the company’s performance in 2017-18 were a significant reduction in aggregate technical and commercial losses in its distribution franchise areas, growth in energy sales in Ahmedabad and Surat, and higher operational capacity of its renewable power plants. The company’s total income rose by 14.95 cent, from Rs 102.44 billion in 2016-17 to Rs 117.75 billion in 2017-18. The net profit showed an increase of 121.9 per cent and stood at Rs 9.52 billion in 2017-18 as compared to Rs 4.29 billion in the previous year.

GMR Infrastructure’s share price witnessed an increase of 19.21 per cent during the review period. The company has an operational power generation capacity of 4,400 MW and over 2,300 MW is at various stages of development. GMR’s energy sector business recorded a revenue of Rs 37,603 million in 2017-18 as compared to Rs 35,922 million in 2016-17. Meanwhile, it recorded a net profit of Rs 1,152 million in 2017-18 as against a net loss of Rs 1,551 million in 2016-17, marking a big turnaround.  T&D utilities

The share prices of transmission and distribution (T&D) utilities Power Grid Corporation of India Limited (Powergrid), Reliance Infrastructure Limited (RInfra) and Adani Transmission Limited (ATL) together reported positive returns (unweighted) of 20.95 per cent.

Powergrid’s shares witnessed a capital loss of 7.39 per cent in the past year. As of June 30, 2018, it owned and operated 148,659 ckt. km of ultra-high transmission lines with 236 substations of around 332,163 MVA capacity. The total capex incurred by Powergrid in 2017-18 was Rs 257.9 billion. The major highlights for the company in the past year were the winning of two tariff-based competitive bidding (TBCB) projects worth Rs 22.37 billion and the completion of electrification of the first schedule of Mansi-Saharsa-Madhepura (63 rkm) of East Central Railway, 10 months ahead of schedule. In 2017-18, the consolidated revenue of the company stood at Rs 304.3 billion as compared to Rs 262.82 billion in 2016-17. During the same period, the company’s profit increased by 10.04 per cent and stood at Rs 81.98 billion in 2017-18 as against Rs 74.5 billion in 2016-17.

ATL has shown the highest increase in its capital amongst the companies tracked by the Power Index, with an increase of 78.89 per cent in its share price during the review period. It is currently the largest private transco with a cumulative transmission network of around 12,540 ckt. km, of which approximately 9,201 ckt. km is operational. The company maintained its transmission network availability at 99.9 per cent in 2017-18. A major highlight for the company was the completion of the acquisition of RInfra’s integrated Mumbai power distribution business with a transaction value of Rs 188 billion. ATL recently announced the setting up of a new entity and subsidiary, Adani Electricity Mumbai Limited, to house this acquisition. Another significant development for the company was the winning of the Fatehgarh-Bhadla Transmission Limited project through tariff-based competitive bidding. The company’s consolidated income stood at Rs 40.55 billion in 2017-18 as compared to Rs 28.97 billion in 2016-17, recording a 39.9 per cent increase. Meanwhile, the net profit increased from Rs 4.16 billion in 2016-17 to Rs 11.42 billion in 2017-18.

RInfra showed a decline of 8.64 per cent in its share price during the period under consideration. After having won orders worth Rs 227 billion in the past year, RInfra’s order book status for engineering, procurement and construction contracts stood at Rs 266 billion as of June 30, 2018. The company plans to build an order book of Rs 500 billion by 2019-20. The total income recorded for 2017-18 was Rs 275.68 billion as against Rs 267.17 billion in 2016-17. Its PAT decreased by 6.89 per cent and stood at Rs 12.98 billion in 2017-18 as against Rs 13.94 billion in the previous year.

Equipment suppliers

The stocks of power equipment manufacturers including Bharat Heavy Electricals Limited (BHEL), CG Power and Industrial Solutions Limited, ABB India, Thermax, Siemens India, KEC International and Suzlon registered a negative return of 18.77 per cent (unweighted) during the review period.

BHEL’s share price declined by 38.02 per cent during the review period. The company commissioned a total of 4,149 MW of power generating capacity during the year. With this, the total installed base of power generation equipment supplied by BHEL exceeds 183 GW. The total orders in hand with the company stand at over Rs 1,180 billion, which is the highest amount of orders for the company in the last five years. The company recorded a consolidated revenue of Rs 290.75 billion in 2017-18 against Rs 297.31 billion in 2016-17, registering a marginal decline. The net profit registered a decline of 3.74 per cent and stood at Rs 4.38 billion in 2017-18 against Rs 4.55 billion in 2016-17.

ABB registered a capital loss of 1.51 per cent in its share price during the period under consideration. In the past year, the company delivered a 110 kV digital substation for India’s largest IT park. It also touched the 10 GW milestone for clean power, including 5 GW from wind generators and 5 GW from solar inverters. In support of the drive to reduce carbon emissions, the company plans to install solar inverters at 750 railway stations in northern India. The company’s revenue registered a growth of 8.25 per cent in the last fiscal (January to December 2017) with a total revenue of around Rs 94.96 billion as against Rs 87.13 billion in 2016. The net profit for the year 2017 was Rs 4.2 billion, 12.3 per cent more than the profit of Rs 3.76 billion recorded in 2016.

Siemens India witnessed a capital loss of 21.96 per cent in the review period. One of the major achievements of the company in the past year was the commissioning of a 500 MW high-voltage direct-current link between India and Bangladesh. The company posted a net profit of Rs 11.4 billion in financial year 2017 (October 2016 to September 2017), which is a 60.82 per cent decrease on a year-on-year basis. The total income stood at Rs 116.56 billion in financial year 2017 as against Rs 109.99 billion in the previous fiscal.

Thermax witnessed an increase of 16.67 per cent in its share price during the period under review. The company recorded its highest order booking in 2017-18 of about Rs 63.8 billion, 45.2 per cent more than that in the previous fiscal. Among its major achievements during the last year, Thermax concluded a boiler-turbine-generator order of Rs 32.7 million for a 130 MW captive cogeneration power plant and commissioned a 5.76 MW rooftop solar PV captive power plant. Its total income stood at Rs 46.02 billion in 2017-18, marginally lower than the income of Rs 47.03 billion recorded in 2016-17. The net profit recorded for the year 2017-18 was Rs 2.31 billion as compared to Rs 2.16 billion in 2016-17, registering a growth of 6.94 per cent.

Suzlon Energy Limited posted a capital loss of 56.8 per cent during the review period. As of March 2018, it had an order backlog of 2 GW and the largest share (1.4 GW) in the order volume of auctions concluded in the last year till March 2018. The revenue from operations in 2017-18 amounted to Rs 82.92 billion as against Rs 126.92 billion in 2016-17, registering a decline of almost 35 per cent. Meanwhile, the company recorded a net loss of Rs 3.84 billion in 2017-18 as against a profit of Rs 8.99 billion in 2016-17.

CG Power witnessed a capital loss of 27.62 per cent during the review period. In a major achievement in the past year, CG Power won a tender worth Rs 1,070 million from Energy Efficiency Services Limited for the supply of energy efficient low tension motors. The company examined the recoverability of certain overdue/non-recoverable assets and, after analysis, chose to write these off and hence, the company’s net loss widened in 2017-18 and stood at Rs 11.65 billion as compared to a net loss of Rs 4.9 billion in 2016-17. The company’s total income in 2017-18 was Rs 63.27 billion as compared to Rs 59.91 billion in 2016-17, registering a rise of 5.61 per cent.

KEC International reported a marginal capital loss of 2.13 per cent during the review period. As of March 31, 2018, the company had an order book worth Rs 172.98 billion, witnessing a growth of about 37 per cent as compared to 2016-17. Of the total orders, 71 per cent come under the T&D segment. KEC’s rooftop business also continued to grow with orders won from oil and gas majors, ONGC and HPCL, as well as from large private groups. The company’s revenue stood at Rs 100.96 billion in 2017-18, recording a growth of 15.32 per cent over the revenue of Rs 87.55 billion of 2016-17. The PAT stood at Rs 4.6 billion in 2017-18 as compared to Rs 3.05 billion in 2016-17.

Conclusion

Despite the challenges faced by power sector companies, it is expected that the sector will gain momentum with the support of government initiatives. The Ujwal Discom Assurance Yojana is directed at improving the financial performance of loss-making state distribution utilities. At the same time, the government is taking several measures to help stressed power plants. Going forward, the demand for power is expected to grow in order to cater to the continued economic growth of the country, thereby creating more volume in the power market. Further, the target of providing universal access to power would result in a significant addition of generation capacity as well as expansion of the T&D network.

 

 

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