'Increased generation, realisation improve sales of power firms'

Also, after FY11, opening up of inter-state power transmission for private sector has proved beneficial for the sector

An increase in power generation and better realisation by power companies have helped them improve balance sheets, with sales rising 10.6 per cent in FY14, over and above a 9.9 per cent growth in the preceding year.

According to a Dun & Bradstreet India study, India’s Leading Infrastructure Companies 2014, based on 18 companies in the power sector with a standalone income of about Rs 100 crore in FY14, the rise in sales can be attributed to higher realisations and higher power generation.

“During the first half of the year, some of the large companies performed poorly on the revenue front due to a decline in power generation, which in turn can be attributed to an array of reasons like low off-take by state distribution utilities, coal shortage at certain plants, and planned maintenance shutdowns at certain units,” the report noted.

In the second half of FY14, however, the sector was able to bounce back thanks to double-digit growth in sales by most companies. The report also highlighted the fact that after FY11, opening up of inter-state power transmission for private players has proved beneficial for the sector.

The report mentions that in the past five years, electricity generation capacity has consistently increased by about seven per cent, with 11-15 per cent increase being recorded in FY12 and FY13. India has also been able to bridge the demand-supply gap in electricity. In FY05, the energy deficit stood at 7.3 per cent, which was pared to 4.2 per cent by FY14.