- 18 Apr 2023
- ICICIdirect Research
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NTPC TO EXPAND COAL BASED CAPACITIES BY 10 GW PROVIDING OPPORTUNITIES FOR CAPITAL GOODS PLAYERS
NTPC - 332 Change: -1.75 (-0.52 %)News: India's largest electricity producer, NTPC, plans to build more coal plants to meet India’s growing energy needs. The power utility company expects to award construction orders for about 4.5 GW of coal-fired capacity during the current financial year. The projects will be built across three sites where power plants are already operational. These include the construction of 1.6 GW of coal power plants each at Lara in Chhattisgarh and Singrauli in Madhya Pradesh as well as 1.32 GW plant at Meja in Uttar Pradesh during the current financial year. The company is working on boosting output from its own mines to notch up 34 million tonne in the ongoing financial year, which is a 48% increase.
Views: Incremental capex in coal based plants has almost come to a halt over the last four to five years. This has added pressure to existing plants at the time of severe demand. The capex plans of NTPC are well timed when power consumption growth is pegged to growth at 8-9% over the next three to five years. Also, from a capital goods sector perspective, the capex will be beneficial for companies like Bhel and L&T, which are present in coal plant EPC segment and will provide decent order inflow opportunities.
Impact: Positive