'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

    NLC INDIA Share Price Up by 11%; BSE POWER Index Up 1.5% (Market Updates)

    May 11, 2021 | Updated on May 11, 2021

    NLC INDIA share price is trading up by 11% and its current market price is Rs 60. The BSE POWER is up by 1.5%. The top gainers in the BSE POWER Index are NLC INDIA (up 11.0%) and BHEL (up 12.3%). The top losers are KALPATARU POWER (down 1.1%) and TORRENT POWER (down 2.0%).

    RELIANCE INFRA Share Price Up by 10%; BSE POWER Index Up 2.0% (Market Updates)

    May 11, 2021 | Updated on May 11, 2021

    RELIANCE INFRA share price is trading up by 10% and its current market price is Rs 53. The BSE POWER is up by 2.0%. The top gainers in the BSE POWER Index are RELIANCE INFRA (up 9.9%) and BHEL (up 12.0%). The top losers are KEC INTERNATIONAL (down 0.1%) and KALPATARU POWER (down 1.2%).

    JSW Energy's Green Bonds Puts Stock in Focus (Views On News)

    May 11, 2021

    Shares of JSW Energy jumps 3% in the intra-day trade today on account of issuance of green bonds.

    Adani Transmission Q4 Update: Net Profit Jumps Four-Fold Despite Dip in Revenue (Views On News)

    May 7, 2021

    The company's share price touched its 52-week high of Rs 1,187.6 today after posting Q4 results.

    Adani Green Energy in Focus as Q4 Net Profit Rises 86% (Views On News)

    May 6, 2021

    New operational capacities boosted the company's top line and bottom line during the quarter.

    More Views on News

    Most Popular

    The Next Smallcap Winners (Profit Hunter)

    Apr 30, 2021

    Price is the only due diligence one might require to buy this business.

    Time to Buy Smallcaps? (Fast Profits Daily)

    Apr 30, 2021

    In this video, I'll show you why I favour smallcaps over the Nifty.

    Sell in May and Go Away? (Fast Profits Daily)

    Apr 28, 2021

    Does the concept of selling stocks in the month of May, work in the Indian market?

    Are the Stock Markets Deaf to Covid Agony? (Profit Hunter)

    May 6, 2021

    Why are markets discounting the economic impact of Covid?

    More

    India's #1 Trader
    Reveals His Secrets

    Secret To Increasing Your Trading Profits Today
    Get this Special Report,
    The Secret to Increasing Your Trading Profits Today, Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE POWER


    May 11, 2021 (Close)

    S&P BSE POWER 5-YR ANALYSIS

    COMPARE COMPANY

    MARKET STATS