Motilal Oswal - MOSL: Morning India (20/June/18): Utilities: Power oversupply has started shrinking-Merchant prices to rise, New PPAs to emerge soon; JSPL key beneficiary

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MOSL: Morning India (20/June/18): Utilities: Power oversupply has started shrinking-Merchant prices to rise, New PPAs to emerge soon; JSPL key beneficiary

MOrning India (20/June/18): Utilities: Power oversupply has started shrinking; Merchant prices to rise, New PPAs to emerge soon; JSPL key beneficiary (1. Jindal Steel & Power; 2. NTPC; 3. JSW Energy; 4. Power Grid; 5. CESC; 6. NHPC; 7. Tata Power)

Today’s top research theme

Utilities: Power oversupply has started shrinking

Indian power oversupply has started correcting. PLF has started improving after seven years of descend. This trend will continue on slowing of capacity add and accelerated retirements, even as demand growth remains steady.
The financial stress in the sector has further constrained supply. As we move towards market balance, margins in merchant power business will trend up.
The market will get balanced at lower than the previous cycle peak PLF due to displacement by renewable energy.
We expect demand for new PPAs will emerge soon. JSP (BUY) with high share of cost efficient merchant capacities will be the key beneficiary. We upgrade JSWE to Neutral on higher merchant prices, partly offset by increase in coal cost. We continue to like PWGR, NTPC and CESC.

Piping hot news

BJP, PDP split, J&K heads towards governor’s rule again

Jammu and Kashmir is heading for Governor’s rule after the Bharatiya Janata Party (BJP) withdrew support to the People’s Democratic Party (PDP)-led coalition government on Tuesday, blaming chief minister Mehbooba Mufti for the deteriorating law and order situation.

20/06/2018 28 EN

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MOSL: Morning India (20/June/18): Utilities: Power oversupply has started shrinking-Merchant prices to rise, New PPAs to emerge soon; JSPL key beneficiary

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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