Wednesday, March 31, 2010


After witnessing low spot prices over the past four months, rates have bounced back in March'10. Spot rates touched a high of Rs 7.9/unit in March, indicating strong demand. Average rates for March '10, Rs 5.8/unit, were 67% higher over Q3 FY10. With the country entering the summer season and an improvement in the economic environment, we believe demand for power will remain high. The demand-supply gap is expected to remain high as the country witnesses slow capacity addition during the eleventh plan. Hence, we believe spot rates will continue to remain firm.

Lower capacity addition will keep deficit high
Spot prices regaining firmness
Expect average merchant rates to hover around Rs 5.5-6/unit.

To read the full report: UTILITIES SECTOR