Power companies are likely to report strong earnings for the third quarter of the current financial year owing to the growth in regulated equity from capacity expansion, new transmission line additions, improved hydro generation, and sustained volume growth in the short-term market, as per analysts.
Additionally, contributions from solar EPC (engineering, procurement, and construction) and rooftop installation is likely to aid in the growth in earnings.
“We retain our positive outlook on NTPC, driven by increased regulated equity from thermal capacity addition, on CESC for its strategic shift towards renewable energy, and on NLC, for its expanding project portfolio,” said Elara Capital in its quarterly preview.
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The brokerage noted that power generation has increased by 3% on year to 429 billion units (BU) in Q3FY25, driven by the onset of winter, which led to lower power demand. Peak power demand in the quarter under review remained steady at 224 gigawatt (GW), down 10% from the record highs of 250 GW in May 2024.
“We expect NTPC’s regulated equity to remain Rs 89,400 crore in Q2FY25E vs Rs 82,100 crores in Q3FY24E. NTPC earns an assured return on its regulated assets. We expect a healthy quarter with a revenue and PAT (profit after tax) to rise 5% and 4%, respectively, on increase in regulated equity,” Elara Capital said.
NTPC commissioned around 155 MW of solar capacity in the third quarter of the current fiscal. It registered an increase of 3.82% on year in increase in generation.
“The company is a play on energy security as well as transition. It is slated to be a key beneficiary of the government’s 80 GW thermal capacity addition target,” said the brokerage.
The firm expects revenue and PAT of Power Grid Corporation of India to increase 4% and 5%, respectively in the quarter under review on the back of commissioning of new transmission lines and substations.
Tata Power is also expected to register a growth of 11% on year in its net profit likely to record a 13% on-year jump.
“Hydro generation posted robust generation growth in Q3FY25 increasing 27%, 31% and 24% in October,
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