Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
'Power' to the people - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Oct 6, 2008

    'Power' to the people

    India's GDP has grown at an average rate of 4.8% in the last fifty years. Over the last two decades, its growth rate has been at levels of 5.6% and over the last decade, it has clocked a growth rate of about 7% per annum. This healthy economic growth has led to strong rise in job opportunities across various sectors, leading to lower unemployment levels and a modest reduction in poverty.

    Better paying jobs have allowed people to increase their share of discretionary spending. More individuals have been consuming and individuals have been consuming more. This, as such, has led to a shift in perception of the people. Goods that were once considered to be luxurious have started becoming necessities. Appliances such as colour televisions, air conditioners and refrigerators are now found in almost every household.

    The level of consumption has risen and so has the demand for power. Some stats would help picture this better. There are various categories of power consumers in India - domestic, commercial, industrial, railways, agriculture and others. The domestic consumers share towards the total power consumption has witnessed a major shift over the last three decades.

    During the 1980s, its share stood at about 14% of the total power consumption. This further increased to 19% during the 1990s and currently i.e. during the 2000s (till 2006), it stood at nearly 25% of the total consumption.

    Break up total power consumption
    Duration Domestic Commercial Industry Railways Agriculture Public services Others
    1980s 13.7% 6.0% 53.0% 2.5% 20.4% 2.8% 1.6%
    1990s 18.8% 6.1% 38.9% 2.3% 29.5% 2.9% 1.6%
    2000s* 25.2% 8.0% 32.4% 2.6% 25.9% 3.5% 2.5%
    CAGR^ 10.0% 8.5% 4.7% 6.1% 7.6% 6.2% 7.7%

    Source: CMIE; ^over a period of 25 years; * till 2006

  • Also read - Opportunities in Infrastructure-II

    While the demographic factors paint a rosy picture for generation companies in terms of opportunities, there are a couple of issues that need to be looked into primarily. With power demand outpacing power supply, high amounts of power deficits have been recorded, especially in recent times.

    Further, due to shortage of equipment, generation capacities have not been added as per planned. To add to their woes, power generation companies are also facing issues of raw material supply, which in turn has been reducing their utilisation rates.

  • Also read - Coal imports: Issues that matter

    On an overall basis, the scope for power generation companies remains immense. With private and public players entering the power generation space and announcing huge generation capacitates (greenfield and brownfield), the power deficit scenario is expected to narrow down in the long term, provided that these capacities are setup on time and the above-mentioned issues are resolved at the earliest.



    Equitymaster requests your view! Post a comment on "'Power' to the people". Click here!


    More Views on News

    NTPC: Higher Tax Provision Impacts Profits (Quarterly Results Update - Detailed)

    Mar 30, 2017

    NTPC declared results for the quarter ended December 2016. The company reported revenue growth of 10.9% while profits declined by 7.5% YoY.

    NTPC: Capacity Addition a Key to Earnings Going Ahead (Quarterly Results Update - Detailed)

    Nov 23, 2016

    NTPC declared results for the quarter ended September 2016. Here is our analysis of the results.

    Power Grid: Robust Performance Continues (Quarterly Results Update - Detailed)

    Nov 23, 2016

    Power Grid Corp (PGCIL) declared its results for the quarter ended September 2016. The company reported a revenue and profit growth of 28% YoY and 32% YoY respectively.

    Power Grid: Steady Start to the Year (Quarterly Results Update - Detailed)

    Sep 29, 2016

    Power Grid Corp (PGCIL) declared its results for the quarter ended June 2016. The company reported a revenue and profit growth of 31% YoY and 35% YoY respectively.

    NTPC: Good Start to the Year (Quarterly Results Update - Detailed)

    Sep 29, 2016

    NTPC declared results for the quarter ended June 2016. Here is our analysis of the results.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)