Power stocks are trading strong led by GVK Power & Infra and CESC Ltd. As per a leading daily, power companies have cancelled their orders for equipments amounting to Rs 60 bn. This obviously spells trouble for domestic equipment suppliers who have got very few contracts this year. It may be recollected that the power sector has been facing issues of fuel scarcity, sluggish approvals and non clarity in distribution reforms. Last year, Bharat Heavy Electricals (BHEL) alone had booked orders for 8,921 megawatt worth Rs 360 bn. Even companies like Larsen & Toubro (L&T) and Kalyani Alstom Power have not been awarded any significant power equipment orders.
Mining stocks are trading strong led by Gujarat NRE Coke and Coal India. As per a leading daily, Coal India is looking at reviving its imports to honor the Prime Minister's order to increase supplies to the power companies and avoid penalties. Prime Minister had announced yesterday that Coal India would have to face penalty if it does not abide by the government's instruction of supplying 50,000 megawatt of coal. However, if the company is able to meet over 90% of the set targets, it would be eligible for incentives. The mining company may have to import around 30 m metric tonnes of coal starting April this year. This is because the miner does not expect its production to be able to satisfy the target set by the Prime Minister.