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Sensex Remain Range bound; ONGC Up 1.1%
Fri, 9 Dec 01:30 pm

The Indian share markets continue to trade flat with positive bias during the noon trading session tracking mixed cues from global peers. Sectoral indices are trading on a mixed note with realty, banking and FMCG stocks leading the pack of gainers. Whereas, auto and metal stocks heading the losers.

The BSE Sensex is trading higher by 27 points while the NSE Nifty is trading higher by 1 point. The BSE Mid Cap index is trading flat while BSE Small Cap index is trading up by 0.6%. Gold prices, per 10 grams, are trading at Rs 27,764 levels. Silver price, per kilogram is trading at Rs 41,400 levels. Crude oil is trading at Rs 3,463 per barrel. The rupee is trading at 67.43 to the US$.

Energy stocks are trading on a mixed note with Indraprastha Gas and Gujarat Gas Ltd leading the gains. According to an article in The Economic Times, Praj Industries said it had entered into agreements with Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) to set up bio-ethanol plants that will convert agricultural waste into fuel. The company said it signed a binding agreement of cost sharing with IOC to set up one plant each at Panipat, Haryana and Dahej, Gujarat.

Reportedly, these second-generation (2G) bio-ethanol plants will have capacity to produce 100 Kilo litres of ethanol per day. This is a milestone in progress as per MoU signed earlier this year. Wherein IOC selected Praj Industries as its technology partner for setting up multiple 2G bio-ethanol plants based on its indigenously developed technology.

These agreements were executed on the side-lines of recently concluded Petrotech 2016. Second Generation bio-ethanol technology uses ligno-cellulosic biomass (agri-residue) as feedstock. Farming community is expected to be benefited from additional revenues from agri-waste. Moreover, 2G bio-ethanol also helps reduce dependency on the imported crude oil, thereby saving foreign exchange.

Moving on to the news from stocks in power sector. In spite of tepid sales and revenue, shares of most power utilities rose after the September quarter results.

Following the demand slowdown, power generation growth slowed from 9% in June quarter to around 1% in September quarter. Moreover, compared with the BSE 500 index's loss of 4%, the BSE utilities index gained 5% in the earnings season of October and November.

After strong growth in the first half of 2016, power generation growth has slowed down in recent months.

Power Generation Growth Losing Steam

Notably, power generation in the country recorded a growth of 6.5% in September quarter this fiscal at 632.11 billion units (BU) compared to year ago period.

The effect of same can be seen on major power utilities. Generation at NTPC is up just 1%. Volumes at Adani Power Ltd are flat. Generation at Reliance Power Ltd was hit by coal feeding problems. Also, Tata Power Co. Ltd, JSW Energy Ltd and hydro power producer NHPC Ltd registered good volume growth.

Reportedly, the subdued power generation, along with changes in accounting norms, weighed on revenue. Besides the generation space, Power Grid Corp. of India Ltd did well. Revenue rose 28.5% on strong performance across divisions.

Overall, barring one or two firms, the performances were largely in line with Street estimates, the reports noted. Vivek Kaul has explained the anomaly in the power sector in an in interesting piece in his Diary - In Power-Surplus India, Why Power-Cuts are Still the Norm

Power stocks are trading mixed with CESC Ltd and Tata Power leading the gains.

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