Thursday, July 26, 2012
Great News for Power Companies
There is superb news for the power companies, like Tata Power Ltd, Adani Power Ltd, KSK Energy Ventures Ltd, Reliance Power Ltd, etc. Power companies which are forced to import coal despite high costs due to delay/denial over environment and forest clearance of their captive mines, can breathe easy now. The government is planning to allow incremental cost of fuel owing to such forced imports as a pass-through in tariff. Sources, said that the provisions would be included in the standard bidding document (SBD) of all forthcoming power projects. The changes would not only allow power companies to relinquish their commitments under the terms of power purchase agreement entered with state utilities but also get full compensation for increased fuel cost if coal is imported at a highest cost. I hope after this news most of the power companies will move up. Buy Reliance Power Ltd at Rs.93-94 for a target of Rs.109-111, in the short term, as the news is too good.