Ind-Ra maintains negative outlook for power sector in FY22

With a further weakening in the financial position of distribution companies (discoms) due to Covid-led business disruptions, analysts at India Ratings and Research has maintained a negative outlook on the power sector for FY22. The agency expects power demand to grow at 9%-10% year-on-year (y-o-y) in FY22, which will help the recovery of utilisation levels of thermal power plants.

Overdues — outstanding of 45 days or more — owed to generators by discoms across the country stood at Rs 1.27 lakh crore at January end, 27% higher than the same period in last year. Dues have increased despite PFC-REC disbursing Rs 46,074 crore to all the discoms by January-end under the first tranche of the Centre’s liquidity infusion scheme to clear dues to generators.