X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 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

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

'Power' to the people

Oct 6, 2008

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

DurationDomesticCommercialIndustryRailwaysAgriculturePublic servicesOthers
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

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    This is Why the Stock of Jubilant FoodWorks Went Up 1,160%(The 5 Minute Wrapup)

    Apr 12, 2019

    This critical business strategy has enabled companies to scale their operations faster.

    Pocketing Massive Gains with HDFC And HDFC Bank(Profit Hunter)

    Apr 12, 2019

    Here's how one could have generated gains of Rs 59,250 in 10 days by trading HDFC and HDFC Bank with a capital of Rs 4 lakh.

    A Simple 3-Point Investing Manifesto for You the Indian Investor(The 5 Minute Wrapup)

    Apr 11, 2019

    A must have checklist for every investor in the Indian stock market.

    My Master Series on How to Trade Election 2019(Profit Hunter)

    Apr 16, 2019

    For 30 years he has watched how elections impact the markets, and practiced how to profit from it. Now he is here...telling you everything. Read on...

    Election Series: Follow the World's Biggest Traders To See Where the Money Flows(The 5 Minute Wrapup)

    Apr 17, 2019

    20% of all the traders bring in 80% of the money. Watch these 20% and you get a working idea of which way the wind is blowing.

    More

    Get the Indian Stock Market's
    Most Profitable Ideas

    How To Beat Sensex Guide 2019
    Get our special report, How to Beat Sensex Nearly 3X Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE POWER


    Apr 24, 2019 (Close)

    S&P BSE POWER 5-YR ANALYSIS

    COMPARE COMPANY

    MARKET STATS