Fundamental Analysis of Power Sector

In: Business and Management

Submitted By jmtarpara
Words 6757
Pages 28
Analysis of Power Sector in India: A Structural Perspective
Niranjan Swain*, J P Singh** and Deepak Kumar***

The inhibitors to growth in power sector were many—small and big but the main roadblock in the growth path was Government Policy, which made it difficult or rather impossible for a private player to enter. This further aggravated the problem that Indian entrepreneurs didn’t have enough knowledge and experience in developing power projects. To worsen the scenario, the SEBs and other Government Agencies became financially weak to propel any future expansion or growth in the sector. Electricity Act, 2003 was a major step in solving the above underlying problems of the power sector. A whole new system was evolved where private players were invited to be an active participant. The system demanded financial, political and other infrastructural growth—with major requirement in roads and communication. Some of the bold steps taken in the Act were moving generation and distribution out of ‘License Raj’ regime, opening access to national grid and demolishing the ‘Single Buyer’ model. The failure of the huge federal structure and the changing global scenario have forced Government to think of ways to revive this fundamental infrastructure sector. Two of the avenues that government can count on for future growth of this sector is “Midgets or Small Power Plants” and “CDM—Clean Development Mechanism”.

India and Infrastructure
With traditional government controlled vertically integrated monopoly giving way for new multi-player market-driven scenario, the opportunity in power sector attracted entrepreneurs into the sector. The ever-growing demand gap asked for addition of 1000 MW generation capacity per year. These forces coupled gave rise to different strategies that were new to the sector. One of the fast growing strategies that attracted a lot of players was—Small…...

Similar Documents

Fundamental Analysis

...mayor utilidad y, sobre todo, sea más eficiente tanto para medir la calidad de gestión como la posibilidad de planificación en la empresa. Para ello, proponemos unos ratios tradicionales que constituyen el eje fundamental para la toma de decisiones. Así mismo, son los que se utilizan en casi todas las encuestas, bases de datos e información a terceros por parte de las centrales de balances, y se presentan agrupados en familias homogéneas, que comprenden 6 grupos. En primer lugar, figura el título o familia de los ratios que componen la batería, a continuación, se detallan los ratios individualizados representados por la relación de las magnitudes que componen los mismos. 4 1. SITUACIÓN DE LIQUIDEZ, TESORERÍA Y DISPONIBILIDAD Los ratios de liquidez son: - Propiamente de liquidez - Tesorería - Disponibilidad Con estos ratios se pretende conocer el grado de liquidez de la empresa desde la perspectiva de tres magnitudes de inversión: stocks, clientes y tesorería. La relación de estos tres ratios es obvia, por lo que, de hecho, no se debe proceder a una valoración individual de los mismos. ACTIVO CIRCULANTE EXIGIBLE A CORTO PLAZO RATIO DE LIQUIDEZ = El valor aconsejable de este ratio, en el caso de tener que predecir sin tener más datos, tanto propios como del sector, se debe situar entre 1.5 y 2. RATIO DE TESORERÍA = CLIENTES + DISPONIBLE EXIGIBLE A CORTO PLAZO Para este ratio el valor recomendable es entre 0.8 y 1. RATIO DE DISPONIBILIDAD......

Words: 3996 - Pages: 16

Funding Issues in Power Sector

...Key Inputs for th XII Plan Financing of Power Sector Central Electricity Authority Government Of India Agenda  Sector Profile  Magnitude of Investment  Funding Sources and Issues Power Sector Profile A LL INDIA DEFICITS IN POWER 20 15 Percent 10 5 Energy Def icit Peak Def icit 0 1998 -99 2000 -01 2002 -03 2004 -05 2006 -07 2008 -09  Energy availability has increased by 32.7% in the past 5 years but demand continues to outstrip supply  Nearly 600 million Indians do not have access to electricity  AT&C losses currently exceed 30% for the country as a whole. Need to Accelerate Power Sector Growth Growth in GDP and Gross Power Generation 15.00 Grow th in Gross Generation 10.00 Grow th in GDP Percent 5.00 0.00 199900 200001 200102 200203 200304 200405 200506 200607 200708* 200809*  For India to grow @9% p.a. its power sector must also grow at 7.2% p.a (XIIth Plan projects electricity use elasticity wrt GDP at 0.8)  But over the last 5 years, Gross Power generation has grown by only 5.89% pa  NEP objective : Power for all by 2012 Targeted Growth of Generation  XIth Plan target is 78,700MW  XIIth Plan target is 1,00,000 MW  Current investment focus is on Generation  Investment in Sub-transmission and Distribution is lagging  However, for smooth functioning of the sector Investment should be in the ratio 2:1:2 Magnitude of Investment (Rs crore) Plan Generation Transmi ssion 1,40,000 2,40,000......

Words: 864 - Pages: 4

Fundamental Analysis on Power Sector

... | |A market trader has a continuous finger on the pulse of customer satisfaction. Direct contact with customers indicates what he is| |doing right or where he is going wrong. Such informal feedback is valuable in any company but hard to formalise and control in | |anything much larger than a corner shop. For this reason surveys are necessary to measure and track customer satisfaction. | |Developing a customer satisfaction programme is not just about carrying out a survey. Surveys provide the reading that shows | |where attention is required but in many respects, this is the easy part. Very often, major long lasting improvements need a | |fundamental transformation in the company, probably involving training of the staff, possibly involving cultural change. The | |result should be financially beneficial with less customer churn, higher market shares, premium prices, stronger brands and | |reputation, and happier staff. However, there is a price to pay for these improvements. Costs will be incurred in the market | |research survey. Time will be spent working out an action plan. Training may well be required to improve the customer service. | |The implications of customer satisfaction surveys go far beyond the survey itself and will only be successful if fully supported | |by the echelons of senior management. ...

Words: 4612 - Pages: 19

Fundamental Analysis of Power Sector

...consistently write high quality write-ups that are relevant yet simple to grasp. Anything you might want to add here. 8) Write a short article on the given topic (test). As a candidate for content writing job this small test is to be expected. But don’t get nervous, remembering that you have written enough content previously (even if you have no formal work exp.) to write the small piece. Be cool and calm and take your time to write a good, simple, relevant article without any grammatical errors. Any error will definitely give a negative impression, so avoid it like plague. 9) What do you know about Social Media Optimization (SMO)? SMO is an upcoming and very exciting avenue for enhancing website popularity and traffic by harnessing the power of various social media like Twitter, Facebook, Digg, YouTube etc. Be prepared to suggest some ways to promote a product, service or website on Facebook and Twitter. So go sign into your Twitter and Facebook accounts and try out a few things to develop enough confidence in the field. Nowadays SMO is an expected skill for most content writers and SMO has blurred the distinction between SEO and content writing as both, Search Engine Optimizers and Content Writers dabble in the field. Check out my post on SMO tricks to get a better grasp of the subject. 10) Short Grammar Test A Content Writer is expected to be grammatically correct and international clients will expect nothing but the best written material which they won't......

Words: 3539 - Pages: 15

Power Sector Reform and Nigeria Development

...The Effect of Nigeria Power Sector Reform on Private Sector Investment ONOWA SIMON OWOICHO BENUE STATE UNIVERSITY, MAKURDI Abstract Electricity generation, transmission, and distribution are a ubiquitous and integral part of any modern economy. Aside from providing households with all the conveniences of electric power, a modern and reliable electricity sector contributes to efficient overall economic production and plays an important role in determining Nigeria’s competitive advantage. But in addition to its role of providing a source of energy, the electricity sector also contributes to lifting overall Nigerian economic activity and employment through its capital investments in electricity infrastructure. This report assesses the economic impact of Nigerian power sector reform on private sector investment. The methodology used allowed us to calculate economic multipliers—rules of thumb that link new investment in the sector to overall economic activity. The economic multipliers are valuable for planning because they link each dollar of additional investment by the industry to a given dollar value of overall economic output, job creation, and tax revenues. Moreover, this report links the occupational requirements of these increases to capital spending—highlighting the number of workers and skills to put in place future electricity generation, transmission, and distribution capacity. 1 Introduction The availability of reliable Electric Power to the homes and......

Words: 4096 - Pages: 17

India Power Sector Future

...Contents Executive Summary 2 1. Introduction 4 2. Demand of power 4 2.1 Energy demand with respect to sector has been continuously changing in India. 5 2.1.1 Agricultural sector 5 2.1.2 Industrial sector 5 2.1.3 Domestic Sector 5 3 Supply of power 5 4. Indian Power sector Growth – Recent and Future 5 5. Transmission and Distribution – 6 5.1 National Power Grid 7 5.2 Losses in T & D 7 5.3 Measures that can be taken to reduce losses are: 8 5.3.1 For Technical losses: 8 5.3.2 For Commercial losses: 8 6. India’s energy mix – Future investment required 8 7. Environmental issues 9 8. Sources of power 9 8.1 Coal 9 8.2 Natural Gas 10 8.3 Hydro power 10 8.4 Nuclear sources of power 10 8.5 Renewable sources of power 11 8.5.1 Solar power 11 8.5.2 Wind power 11 8.5.3 Biomass power 11 9. Regulatory changes 12 10. Disinvestment & consolidation 12 11. Challenges: 13 Appendix: 14 Appendix I 14 Appendix II 14 Appendix III 15 Appendix IV 16 Appendix V 16 Appendix VI 16 Appendix VII 17 References: 18 Executive Summary Availability of power is one of the important ingredients for industrial growth. It is an important infrastructure facility without which any industrial activity cannot be thought of in modern times. In the report, the main parameter used is the increase in the demand of power in India. Assuming a growth of 8%, the projected energy demand will be about 3600 billion kWh, almost 5 times the current demand. Based on the demand growth and......

Words: 5972 - Pages: 24

Indian Power Sector

...an overall basis, the parameters used and the weightages are as follows: The key aspects evaluated under each of the areas can be summed up as follows: State Government {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} Regulatory Process {text:list-item} {text:list-item} {text:list-item} {text:list-item} (A negative marks of 5 is assigned to States which are yet to set up an SERC) Business Risk Analysis {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} Fnancial Risk Analysis {text:list-item} {text:list-item} {text:list-item} {text:list-item} Others {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} Progress in attaining Commercial Viability {text:list-item} {text:list-item} Sustainability of the revenue model of the power sector. 10.{text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} 11.Creation of a competitive environment 12.{text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item} {text:list-item}...

Words: 388 - Pages: 2

Health and Safety in Power Sector

...HEALTH AND SAFETY CONCERNS IN POWER SECTOR The power sector is prone to many accidents and mishaps due to the nature of the working conditions of the power generation plant. The following are the major health and safety concerns in the power sector: * Exposure of workers and public to radioactive material * Uncontrolled release of radioactive material leading to contamination and exposure off site. * Conventional construction hazards and working near live equipment. * Health problems such as respiratory disorders, skin disorders from emitted hazardous substances like lead, asbestos, coal dust, fly ash, silica and toxic gases However negligence towards these safety concerns leads to occurrence of accidents and some of these accidents can be on a large scale causing great loss to life and endangering the safety of employees as well as the general public. The following stated are the major accidents that have occurred in the recent past in the power sector: Accidents in Nuclear Power Generation Plants: * April 2011  Fire in the control room of the Kaiga Generating Station in Karnataka * November 2009  Fifty-five employees consume radioactive material after tritiated water finds its way into the drinking water cooler in Kaiga Generating Station. * January 2003  Failure of a valve in the Kalpakkam Atomic Reprocessing Plant in Tamil Nadu results in the release of high-level waste, exposing six workers to high doses of radiation. The leaking area of...

Words: 443 - Pages: 2

Fundamental Analysis of Power Sector

...70,214.62 | [pic] [pic] FUNDAMENTAL ANALYSIS The fundamental Analysis allows for selection of securities of different sectors of the economy that appear to offer profitable opportunities. The security analysis will help to establish what type of investment should be undertaken among various alternatives i.e. ,Real Estate, Bonds, Debentures, Equity Shares, Fixed Deposits, Gold,Jewellary etc.Neither all industries grow at same rate nor do all companies. The growth rate of a company depends basically on its ability to satisfy human desires through production of goods or performance is important to analyse the national economy. It is very important to predict the course of national economy because economic activity substantially affects corporate profits, investor’s attitudes, expectations and ultimately security prices. There are different cycles and causing for movements in the economy such as “Boom, Depression, Recession” etc., the performance of the economy depends basically on the monsoon and the growth rate of agriculture. The most important factor is the “Fiscal Policy”, which incorporates government expenditure, taxation, borrowing, deficit financing and which influences both public and private sector in the economy. The industrial growth in general and of infrastructural industries in particular influences the corporate performance. The security analysis is to be made by the investor, before......

Words: 21454 - Pages: 86

Analysis of Fundamentals

...Fundamentals Level – Skills Module Audit and Assurance (International) Wednesday 4 June 2008 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FIVE questions are compulsory and MUST be attempted. Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall. The Association of Chartered Certified Accountants Paper F8 (INT) ALL FIVE questions are compulsory and MUST be attempted 1 Introduction – audit firm You are an audit senior in Brennon & Co, a firm providing audit and assurance services. At the request of an audit partner, you are preparing the audit programme for the income and receivables systems of Seeley Co. Audit documentation is available from the previous year’s audit, including internal control questionnaires and audit programmes for the despatch and sales system. The audit approach last year did not involve the use of computerassisted audit techniques (CAATs); the same approach will be taken this year. As far as you are aware, Seeley’s system of internal control has not changed in the last year. Client background – sales system Seeley Co is a wholesaler of electrical goods such as kettles, televisions, MP3 players, etc. The company maintains one large warehouse in a major city. The customers of Seeley are......

Words: 1618 - Pages: 7

Public Sector Power

... Differentiate types of powers in public sector Three are three components of public sector which is Federal Government, State Government, and Local Government. Federal Government is headed by the Prime Minister of Malaysia. Prime Minister Department is leading at the Federal Ministry and the Chief Minister's Department at the State level. It is responsible for planning, designing and coordinating all policies. There are several ministries for instance Ministry of Finance, Ministry of Education, Ministry of Defence, Ministry of Tourism and Culture, Ministry of International Trade and Industry and others. Under ministry there are several department. Department is the Government agency that is under a ministry. Generally, the departments have branches in the state and district levels. Department's role is to implement many of the things that is under a ministry. Administrative Officer of many department is Director General of Department (Federal) or Director (State). Under department, basically there are two types of Public Corporations, namely Statutory Bodies and Non-Statutory Bodies (government owned company). Statutory bodies are organizations established under an Act of Parliament or State Enactment. Federal statutory body for instance is FELDA, MARA, BANK and others. Statutory bodies such as the State of Sabah is the Sabah Foundation, SLDB, USP, the District Council and others. Non-Statutory bodies are the organizations established under the Companies Act,......

Words: 276 - Pages: 2

Fundamental Analysis

...■ Fundamental Analysis: Fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements Fundamental analysis serves to answer questions, such as: • Is the company’s revenue growing? • Is it actually making a profit? • Is it in a strong-enough position to beat out its competitors in the future? • Is it able to repay its debts? • Is management trying to "cook the books"? The term fundamental analysis is used most often in the context of stocks, but we can perform fundamental analysis on any security, from a bond to a derivative. As long as we look at the economic fundamentals, we are doing fundamental analysis. For the purpose of this tutorial, fundamental analysis always is referred to in the context of stocks. Intrinsic Value of Fundamental Analysis: Intrinsic value is one of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stock’s “real” value. In financial jargon, this true value is known as the intrinsic value. For example, let’s say that a company’s stock was trading at $20. After doing extensive homework on the company, we determine...

Words: 3957 - Pages: 16

Fundamental Analysis

...Contents Introduction 2 Ratio Analysis 5 Arrow Electronics 5 Neenah Paper, Inc 8 Standard Motor Products, Inc 11 The Clorox Company 14 Analysis from the ratios (Competitive Analysis): 16 References 18 Introduction It is always a tough decision to invest in a company’s stock. The common stocks give the ownership and a part of the profit that the company gives to the stockholder. As the investors’ money is kept occupied in the stocks, it is an important decision for the investors. Here we will go through four companies which are enlisted in the New York Stock Exchange (NYSE). The four companies that has been included here are * Arrow Electronics * Neenah Paper, Inc * Standard Motor Products, Inc * The Clorox Company The financial reports of 2010, 2011, and 2012 have been considered in this report. At first let us take a look the important issues before investing in a company. 1. Evaluating the financial condition Before making any investing decision, one has to take a look over the entire financial situation. An important step to successful investing is knowing the risk tolerance. Factors may change with the current economy; so this issue is important. 2. Assessing risk Generally, if the financial goal is long term, it is likely to invest money carefully in asset categories with greater risk, like stocks or bonds, rather than restricting the investments to assets with less risk, like cash equivalents. On the other hand,......

Words: 1835 - Pages: 8

Analysis of Infrastructure Sector in India

...Analysis of Infrastructure Sector Infrastructure refers to the fundamental facilities and systems serving a country, city or area, including the services and facilities necessary for its economy to function. Infrastructure is the backbone of an economy. The various types of infrastructure are roads, airports, ports, housing, cold chain, warehousing, telecom towers and allied services, container freight stations etc. In the World Economic Forum’s Global Competitiveness Report for 2011-2012, India was ranked 89th out of 142 countries for its infrastructure. The report also criticized the transport, ICT and energy infrastructure labelling it as “largely insufficient and ill adapted to the needs of business”. Market Size: The Indian power sector has an investment potential of $US 250billion in the next 4-5 years, providing immense opportunities in power generation, distribution, transmission and equipment. The Indian railways have had an increase of 12.57% in revenues from last year. FDI received in construction development sector from April 2000 to January 2015 stood at US$ 24,028.19 million. The number of export and import containers moving through major ports in India expanded 7.34% year over year from April to October 2014. Government Estimation and Plans: Sustained increase in infrastructure is expected to be one of the crucial factors for sustaining strong growth in the economy. Infrastructure investment is expected to surge from 8.9% of GDP in FY15 to 12.1% of GDP......

Words: 700 - Pages: 3

Fundamental Analysis

...eurojournals.com/finance.htm Fundamental Analysis Strategy and the Prediction of Stock Returns Jaouida Elleuch* Faculty of Economics and management sciences (FSEG), University of Sfax, Tunisia E-mail: Elleuchj@yahoo.fr Abstract This paper examines whether a simple fundamental analysis strategy based on historical accounting information can predict stock returns. The paper’s goal is to show that simple screens based on historical financial signals can shift the distribution of returns earned by an investor by separating eventual winners stocks from losers. Results show that historical accounting signals can be used to improve the entire distribution of future returns earned by an investor. In fact, despite the overall down activity of the market over the sample period chosen, results reveal that fundamental accounting signals can be used to discriminate from an overall sample generating future negative returns of -0,116 a winner portfolio that provide positive future return of 0,019 from a loser one generating a negative return of -0,229. The over-performance of the winner portfolio seems to be attributable to the ability of the fundamental signals to predict future earnings. In fact, results show that fundamental signals have a positive and significant correlation with future earnings performance and that the winner portfolio have a future earning’s realisation (0,100) that outperforms that of the loser portfolio (-0,012). Keywords: Fundamental Analysis, Market......

Words: 7445 - Pages: 30

HD Time Trap | Electric Slide | Audi A1 S-LINE