Growth in India’s power demand is likely to decelerate in the second half of the financial year ending March 2023 (2HFY23), after robust 11.3% yoy growth in 1HFY23, Fitch Ratings says.
Power demand in 1HFY23 benefited from a post-pandemic rebound in demand and a low base during 1HFY22. Fitch expects India’s power demand to grow by around 8% in FY23 (FY22: 8.2%).
Fitch expects thermal power plants’ average plant load factor to remain above 60% in FY23 (1HFY23: 64.5%), benefiting from continuing power demand growth. Fitch expects improved domestic coal supply will support coal inventory at power plants and should moderate coal import growth from current high levels, although imports are expected to remain robust.
Fitch estimates generation companies’ (gencos) receivable position to improve as distribution companies have started clearing their dues to gencos following imposition of the late payment surcharge rule by the central government.
Renewable capacity addition is likely to soften in 2HFY23 (8.2MW: 1HFY23, 15.5MW: FY22) and we may see deferment in capacity additions due to high commodity prices, supply chain issues and higher import duties on solar modules and cells from April 2022.
Source: Fitch Ratings
