Brokerage also cited that coal inventory at power facilities have also improved thus bringing power deficit to normalised levels of 0.3% in Q2 versus 1% QoQ. Also, on a sequential basis, merchant rates were slashed 29% during the period. “Revenue for our coverage universe is likely to improve by 23.4% YoY,” added the brokerage firm.
Amid an optimistic outlook for the sector, the brokerage sees 3 power stocks –
, and – to impress with better earnings in the Q2 period.
HDFC Securities sees the standalone revenue of the power generation and distribution company to log 11.1% Y-o-Y growth to Rs 23billion, given an around 7-8% increase in demand across its Kolkata licence area. “We expect PAT to remain largely flat on a YoY basis at Rs2.2 billion. Dhariwal is expected to report improved earnings on the back of commissioning of the three year medium-term PPA with the Railway Energy Management Co.,” said the brokerage. The brokerage has given a buy on the counter with the target price of Rs 113.
For the largest hydropower producer in the country, the brokerage sees steady earnings for the September quarter, with a marginal rise of 3.5% in revenue, driven by overall decrease in generation. On the counter, HDFC Securities maintains a ‘buy’ rating with a target price of Rs 41 per share.
For the state-run power producer, the brokerage sees a rise in top line by as much as 23.6% YoY on the back of the rise in fuel prices. Also, the PAT is seen to grow 5.4% YoY. On the utility major, the brokerage has maintained a ‘buy’ with a target price of Rs 185.
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