First quarter earnings are expected to be disappointing with demand and generation across India falling significantly by around 18 percent during the period largely due to subdued power demand during the lockdown.
Demand across the Commercial & Industrial (C&I) segment was halted completely during April-May as industries and offices were shut.
June saw minor recovery in demand, which fell 11 percent on year against a decline of 22 percent and 14 percent on year in April and May respectively. Thus, PLF was down across stations but availability picked up due to improved inventory levels.
Growing outstanding
The moratorium on bill payments has impacted Discoms’ collection efficiency. This has impacted the Discoms outstanding to the gencos, which increased to 1.26 trillion as on May against ₹950 billion in March. Deficits remained largely flat at 0.4 percent,” the report says.
Discoms outstanding to Gencos is close to its all-time high of ₹1.35 trillion touched November of 2015. However, with improvement in collection efficiency from Q2FY20 and disbursal of loan under the Atmanirbhar scheme by PFC/REC, the Discoms liquidity stress is expected to ease off a bit, which would lead to improvement in its outstanding levels.
Drop in merchant rates
Merchant rates fell 26 percent on year in Q1FY21 to ₹2.4/unit and as a result, plants having untied capacities have suffered as such low rates make it unviable for businesses to operate plants.
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