The continued thrust towards ensuring electricity access to all rural households under “Saubhagya” scheme is likely to improve energy demand in the country, which is a positive for generating companies/ IPPs.
Power Sector
Impact : Positive
The higher budgetary allocation in FY 2019-20 on schemes such as DUGJY& IPDS are a positive for distribution utilities, as it would enable them to reduce distribution losses in their license areas. The continued thrust towards ensuring electricity access to all rural households under “Saubhagya” scheme is likely to improve energy demand in the country, which is a positive for generating companies/ IPPs. The budgetary allocation towards renewable energy sector has remained similar in FY 2019-20 and thus provides continued policy support towards meeting funding requirements for the renewable energy segment, including that for building a green energy transmission corridor.
Capital Goods
Impact : Positive
Higher budgetary allocation in schemes namely DUGJY& IPDS, as well as allocation towards the renewable energy sector are a positive for EPC companies, as it would provide a boost to their order inflows. Further, the increased capex by Railways with its thrust to improve the electrification is a positive for EPC companies as well as solar OEMs domestically, given the stated preference by Government entities for meeting requirements from domestic players.
Sabyasachi Majumdar, Senior Vice President & Group Head – Corporate Ratings, ICRA
Source: indiainfoline
