People walk past a light bulb in Bihar, India (Photographer: Prashanth Vishwanathan/Bloomberg)
Global brokerage house Morgan Stanley has downgraded its outlook on the Indian power sector to ‘In-line' from its earlier ‘Attractive' rating, anticipating disruptions coming in from the renewable producers.
Traditional Vs Renewable
- Solar power can now be produced at almost the same cost of traditional methodology (coal-based)
- Wind energy as the tariff for the same is only marginally higher than coal-based tariff
Besides that, increase in energy efficiency would lead to lower demand growth, the report said.
Other Key Takeaways
- Expect India to be the fastest growing solar market in the world in 2016-2020
- Markets have not paid due attention to the recent solar bids
- Utilities have not priced in the upcoming disruptions
Stock Calls
- NTPC downgraded to ‘Equal-weight' with a target of Rs 149 per share
- Adani Power downgraded to ‘Underweight' with a target of Rs 21 per share
- Tata Power upgraded to ‘Overweight' with a target of Rs 101 per share
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