Institutional Equities - Online Share Trading
Institutional Equities - Online Share Trading
Institutional Equities - Online Share Trading
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FY03<br />
FY04<br />
FY05<br />
FY06<br />
FY07<br />
FY08<br />
FY09<br />
<strong>Institutional</strong> <strong>Equities</strong><br />
FY10<br />
FY11<br />
FY12E<br />
FY13E<br />
FY14E<br />
FY15E<br />
Power segment: Capacity up, but operational issues hurt future valuation<br />
During the past two years, the power sector witnessed a slowdown in investments due to delay in obtaining<br />
environmental clearances, financial closure issues relating to equity contribution, timely supply of critical<br />
components for thermal projects, sourcing of fuel linkage and deteriorating SEBs’ financial status leading to<br />
low demand. All these factors postponed the investment plans of the government as well as private players.<br />
We expect the issues related to land acquisition, obtaining various clearances and fuel security to persist.<br />
However, we have analysed the project portfolios which are at development and planning stage on certain<br />
landmarks like financial closure, land clearance and equipment order placement. Based on our analysis, we<br />
have come to the conclusion that around 76GW of projects are going to be commissioned by FY15 even after<br />
considering 20% to 25% of slippage in ongoing projects. This translates into a CAGR of 20% and completion<br />
of around 21GW/year of incremental capacity in the first three years of the 12th Plan period. This provides<br />
strong visibility of accelerated capacity addition in the next three years. Apart from this, the postponed capacity<br />
would give a push to announcement of new projects during FY12-15.<br />
Exhibit 42: Achievement ratio of power capacity addition<br />
Five Year Plan Target (MW) Deficit (MW) Achievement ratio (x)<br />
7th Plan 22,245 1,193 0.95<br />
8th Plan 30,538 13,808 0.55<br />
9th Plan 40,245 20,994 0.48<br />
10th Plan 41,110 13,827 0.66<br />
FY08 16,335 7,072 0.57<br />
FY09 11,061 7,608 0.31<br />
FY10 14,507 4,922 0.66<br />
FY11 21,441 9,281 0.57<br />
Source: CEA<br />
Exhibit 43: Plan-wise capacity addition<br />
Break-up (MW) Central sector State sector Pvt sector Total Pvt sector (%)<br />
FY04 3,035 798 974 4,807 20%<br />
FY05 2,210 1,169 70 3,449 2%<br />
FY06 1,420 1,488 661 3,569 19%<br />
FY07 4,630 1,671 552 6,853 8%<br />
FY08 3,240 5,273 750 9,263 8%<br />
FY09 750 1,850 853 3,453 25%<br />
FY10 2,180 3,118 4,287 9,585 45%<br />
FY11 4,280 2,759 5,121 12,160 42%<br />
FY12E 4,750 1,000 6,698 12,448 54%<br />
FY13E 7,300 3,500 10,780 21,580 50%<br />
FY14E 7,212 3,500 10,450 21,162 49%<br />
FY15E 6,600 4,000 10,360 20,960 49%<br />
Source: CEA, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
Exhibit 44: 21 Capacity addition trend<br />
(GW)<br />
25<br />
20<br />
21.5 21.0 21.0<br />
15<br />
10<br />
6.8<br />
9.2<br />
9.5<br />
12.1 12.5<br />
5<br />
3.0<br />
3.9 3.4 3.5<br />
3.4<br />
0<br />
Source: CEA, Nirmal Bang <strong>Institutional</strong> <strong>Equities</strong> Research<br />
19 Infrastructure Sector