Rating agency Moody's on Monday upgraded the outlook on the power sector to stable from negative, citing the fifth consecutive month of generation growth in January.
The Central Electricity Authority last week reported a 3.1 per cent year-on-year growth in power generation in January, making it the fifth consecutive month of generation growth after six months of decline driven by coronavirus pandemic.
For the first 10 months of the fiscal 2021, power generation growth declined 2.9 per cent year-on, compared to earlier expectations of a minimum 4-5 per cent decline. But renewable energy generation (excluding hydro power) grew 4.3 per cent during the same period and wind the weakest down 12 per cent.
"We have changed the outlook for the power sector to stable from negative, recognising the better prospects for the sector as a result, amid an improved macroeconomic backdrop," Moody's said in a note.
Sustaining generation growth indicates stabilization of the operating environment, which was severely impacted by the lockdowns. Our expectations of a rebound real GDP growth to 10.8 per cent in fiscal 2022 further underpins the potential for improving power demand and a more stable picture for the sector, it said.
The agency also said it does not expect any further material deterioration in the cash conversion cycle for power companies from current levels, which also supports the outlook.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU