India Ratings assigns `stable to negative’ outlook for power sector

India Ratings & Research has maintained a stable-to-negative outlook on the power sector for the remaining FY20, despite an increase in electricity demand and a rise in thermal plant load factor (PLF).

The stable-to-negative outlook reflects mounting receivables by state distribution companies due to inadequate improvement in operational parameters, uncertainty in the environment as exhibited by some discoms to honour existing PPAs and continued dependence on imported coal due to lower domestic output.

Ind-Ra expects the power demand to remain at 6-7 per cent despite the likelihood of slowing demand. Ind-Ra notes that the growth in power demand from states such as Haryana, Gujarat, Tamil Nadu and Maharashtra, which are main manufacturing hubs,