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Brighter prospects ahead for power sector stocks amid economic momentum

Though there are a few monitorables, rising consumption should drive up volumes, investment

A trigger for the current crisis was power plants shutting down because of heavy losses on buying expensive coal and selling into a highly regulated electricity market
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Thermal generation remains the single largest contributor and Coal India and Neyveli Lignite (NLC) are likely to be beneficiaries of this

Devangshu Datta
Power consumption is closely linked to economic activity and the data indicates that power consumption is likely to rise substantially through FY24 and also in Q4 of FY23. Power consumption in January 2023 rose by a huge 18.4 per cent year-on-year (YoY) and 6.2 per cent month-on-month (MoM), albeit on a low annual base (January 2022 was up only one per cent YoY).  

If this trend continues, there will be an investment focus on utilities and the power supply chain. Investors will also have to study the expansion of receivables up and down the chain, since the sector has a

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First Published: Feb 28 2023 | 7:57 PM IST

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