(Kotak) Power Monthly Tracker, April 26, 2019

Power Utilities
Monthly Sector Update
April 2019
Murtuza Arsiwalla
murtuza.arsiwalla@kotak.com
+91-22-4336-0870
Samrat Verma
samrat.verma@kotak.com
+91-22-4336-0869
FOR REG AC CERTIFICATION, SEE LAST PAGE FOR OTHER IMPORTANT DISCLOSURES, REFER TO THE END OF THIS MATERIAL.FOR DISCLOSURES REGARDING KOTAK SECURITIES, REFER TO THE END OF THIS MATERIAL.
DEMAND MODERATES, OVERALL CAPACITY ADDITION AT 15.6 GW IN FY2019
• Power demand: moderate demand growth across regions on the back of a strong base
All-India power demand grew 2.1% yoy in March 2019 (1.3% in February 2019) as against a growth of 7.8% in March 2018, although
FY2019 growth was more promising at 5%. South saw the highest growth of 5.6% yoy in March 2019. Among states, Rajasthan reported the
highest demand growth of 13.8% yoy followed by Madhya Pradesh (+8.7% yoy) and Andhra Pradesh (+7.9% yoy) in March 2019. On the
peak demand front, Madhya Pradesh showed the highest growth at 26% followed by Chhattisgarh and Karnataka at 20% yoy and 18.3% yoy
respectively. PLFs for coal-based capacities improved to 62% in March 2019 along with gas-based capacities operating at utilization of 20%.
• 6 GW of capacity addition in March 2019, 15.6 GW of net capacity addition in FY2019

All-India installed capacity stood at 356 GW (+5% yoy) with a total of 15.6 GW being added (net basis) in FY2019. 1.9 GW of coal-based
capacities have been decommissioned in FY2019. 2.6 GW of renewable capacity was added by the private sector in March 2019. Capacity
addition in FY2019 was primarily driven by the renewable segment with a total of 12 GW added. We highlight that even in FY2018, of the
13.7 GW capacity addition, 8.3 GW came from renewables while conventional capacity addition remained much lower at 5.4 GW.
• Short-term market: weak trends on realization and market share

Short-term trades in January 2019 declined to 10.4 BU (11.8 BU in December 2018) resulting in a decline in the share of short-term market to
10.4%. Bilateral trades at 4.8 BU comprised 46% of the short-term market while power exchanges at 3.3 BU accounted for 31.5% of the
short-term market in January 2019. Rates for bilateral sale increased 13% yoy to Rs4.4/kwh in January 2019 (Rs4.3/kwh in December 2018).
Tariffs on the exchange declined 22% yoy to Rs3/kwh in March 2019 with volumes of 2.8 BU (-16% yoy).
• Coal: dispatches increased during the month, as did production volumes

CIL reported 8% yoy increase in dispatches for March 2019 compared to growth of 5.5% yoy in March 2018. Production volumes registered
an increase of 9.6% yoy in March 2019. Coal India’s dispatches to the power sector increased 7% yoy in March 2019, as compared to 24%
yoy increase in March 2018. Spot auction premiums under e-auction of coal declined to 75% in March 2019 after being at 84% in February
2019.
• Gas: declining generation, lower spot prices

Gas-based generation declined 6.7% yoy at 3.8 BU in March 2019 (4 BU in March 2018) with PLFs of 20% on an installed capacity of 25 GW.
Spot prices of gas have declined to US$5.3/mmbtu in April 2019. Demand declined 2% yoy at 28 mcm/d in February 2019 (34 mcm/d in
January 2019).
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ALL-INDIA GROWTH IN DEMAND AND POWER DEFICIT
Energy demand grew at 2.1% yoy in March 2019
Energy deficit declined in recent months despite healthy demand growth of 5% in FY2019
Monthly trend of energy and peak deficits and demand growth rates in India, March fiscal year-ends, 2017-19
120 Demand (LHS, BU) Energy deficit (RHS, %) 1.00 12

Yoy demand growth (%)
10.0
100 10 8.7
8.4 8.7
0.75 7.8
8 7.4 7.0
80
6.0 6.0
6 5.6 4.9 4.9
60 0.50 4.6
4.6
40 4
0.25 2.1
1.7
20 2 1.1 1.3
- 0.00 0
May-18
Mar-18
Mar-19
Aug-18
Nov-17
Apr-18
Jul-18
Sep-18
Nov-18
Dec-17
Dec-18
Feb-18
Feb-19
Oct-17
Oct-18
Jun-18
Jan-18
Jan-19
May-17
May-18
Nov-17
Nov-18
Mar-19
Mar-17
Jul-17
Jul-18
Mar-18
Sep-18
Sep-17
Jan-19
Jan-18
180 Peak demand (LHS, GW) Peak power deficit (RHS, %) 4 12

10.1 Yoy
9.9peak demand growth (%)
175 10
8.4 8.6 8.7
170 3
165 8 7.3 7.2
6.7
160 5.3 5.3 5.6
2 6
155 4.6 4.4
4.2
150 4 2.9
1 2.0 2.1 2.4
145
2
140
135 0 0
May-18
Aug-18
Mar-18
Mar-19
Nov-17
Nov-18
Sep-18
Mar-17
May-17
May-18
Oct-17
Dec-17
Apr-18
Jul-18
Oct-18
Dec-18
Mar-18
Mar-19
Feb-18
Feb-19
Jul-17
Nov-17
Jul-18
Nov-18
Jun-18
Sep-17
Sep-18
Jan-18
Jan-19
Jan-18
Jan-19
Source: CEA, Kotak Institutional Equities
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STATE-WISE ENERGY DEMAND
South region showed highest demand growth of 5.6% yoy in March 2019
South region led by Andhra Pradesh and Karnataka showed demand improvement, Rajasthan in North reported strong demand growth
State-wise break-up of energy demand, March fiscal year-end, 2019 (MU)
Energy demand (MU)

State/region Mar-19 Mar-18 Yoy (%) YTD FY2019 YTD FY2018 Yoy (%)
Northern Region 28,464 28,625 (0.6) 383,581 371,934 3.1
Delhi 1,931 2,053 (5.9) 32,272 31,825 1.4
Haryana 3,658 3,987 (8.3) 53,664 50,775 5.7
Punjab 3,585 3,752 (4.5) 55,872 54,812 1.9
Rajasthan 6,774 5,950 13.8 79,939 71,193 12.3
Uttar Pradesh 8,754 9,264 (5.5) 117,046 120,051 (2.5)
Western Region 33,357 32,921 1.3 388,116 368,404 5.4
Chattisgarh 2,464 2,319 6.3 26,865 25,915 3.7
Gujarat 9,890 9,898 (0.1) 117,426 109,985 6.8
Madhya Pradesh 6,236 5,736 8.7 72,655 69,926 3.9
Maharashtra 13,631 13,836 (1.5) 158,134 149,760 5.6
Southern Region 33,605 31,827 5.6 340,695 320,248 6.4
Andhra Pradesh 6,072 5,629 7.9 64,135 58,384 9.9
Karnataka 7,614 7,061 7.8 72,767 67,869 7.2
Tamil Nadu 10,247 9,834 4.2 108,942 106,006 2.8
Eastern Region 11,999 12,024 (0.2) 145,103 136,522 6.3
Bihar 2,319 2,302 0.7 29,858 27,019 10.5
Orissa 2,583 2,538 1.8 31,168 28,801 8.2
West Bengal 4,585 4,622 (0.8) 53,985 50,760 6.4
North Eastern Region 1,240 1,023 21.2 16,541 16,217 2.0
All India 108,665 106,420 2.1 1,274,036 1,213,325 5.0
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STATE-WISE PEAK POWER DEMAND
Peak demand increased 4.4% yoy to 169 GW in March 2019
Madhya Pradesh reported highest growth in West in March 2019; Chhattisgarh and Karnataka registered strong peak demand growth
State-wise break-up of peak power demand, March fiscal year-end, 2019 (MW)
Peak demand (MW)

State/region Mar-19 Mar-18 Yoy (%) YTD FY2019 YTD FY2018 Yoy (%)
Northern Region 47,925 44,348 8.1 61,812 60,749 1.7
Delhi 4,016 3,766 6.6 7,016 6,553 7.1
Haryana 6,544 6,815 (4.0) 10,270 9,671 6.2
Punjab 6,564 6,687 (1.8) 12,556 11,705 7.3
Rajasthan 11,885 10,723 10.8 13,276 11,722 13.3
Uttar Pradesh 16,220 15,789 2.7 20,498 20,274 1.1
Western Region 53,132 49,031 8.4 56,548 50,477 12.0
Chattisgarh 4,444 3,706 19.9 4,444 4,169 6.6
Gujarat 16,263 14,820 9.7 18,148 16,590 9.4
Madhya Pradesh 12,328 9,786 26.0 13,505 12,338 9.5
Maharashtra 22,361 22,486 (0.6) 23,864 22,542 5.9
Southern Region 49,464 47,385 4.4 49,464 47,385 4.4
Andhra Pradesh 8,977 8,993 (0.2) 9,449 8,993 5.1
Karnataka 12,841 10,857 18.3 12,841 10,857 18.3
Tamil Nadu 15,712 14,819 6.0 15,712 15,001 4.7
Eastern Region 21,658 20,794 4.2 22,959 20,794 10.4
Bihar 4,633 4,482 3.4 4,945 4,521 9.4
Orissa 4,827 4,652 3.8 5,624 4,652 20.9
West Bengal + Sikkim 8,287 8,095 2.4 8,775 8,137 7.8
North Eastern Region 2,540 2,283 11.3 2,967 2,629 12.9
All India 169,464 162,263 4.4 176,538 164,066 7.6
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POWER OUTAGES—MONTHLY TRENDS
All-India power outages have moderated in recent months with the onset of winters
Power outages moderated in February 2019; Haryana remains among the worst-affected states
Details of power outages across major states of India (hours/month)
Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19
Haryana 23 18 22 24 37 37 37 23 23 20 18 19 18
Punjab 13 10 6 9 11 12 10 7 9 5 4 7 11
Rajasthan 18 22 15 NA 6 6 3 NA NA 1
Uttar Pradesh 7 5 8 8 6 6 6 5 5 5 5 4 4
Chhattisgarh 6 16 8 NA 0 18 18 583 11 5 3 8 7
Gujarat 2 1 1 1 2 2 1 1 1 1 1 2 2
Madhya Pradesh 2 3 4 7 7 5 5 6 7 4 3 4 3
Maharashtra 1 1 1 2 3 4 3 1 1 2 1 1 1
Andhra Pradesh 1 2 5 4 9 7 7 6 6 2 3 2 1
Karnataka 6 6 8 9 13 11 11 9 9 8 8 8 7
Kerala 7 8 7 8 NA 0 9 9 12 12 NA 4 2
Tamil Nadu
Bihar 11 9 10 12 2 4 4 NA NA NA NA NA NA
West Bengal 3 4 11 10 8 8 10 5 8 4 2 5 4
All India 7 5 6 8 9 8 8 12 7 5 5 5 5
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FUEL-WISE AND OWNERSHIP-WISE INSTALLED CAPACITY
Renewables led bulk of the capacity addition with 12GW being added in FY2019
6 GW of capacities were commissioned in March 2019 taking total capacity addition to 15.6 GW In FY2019
Status of installed capacity and capacity addition, March fiscal year-ends, March 2019 (MW)
Installed capacity as of Mar-2019 (MW)

Coal Gas Diesel Nuclear Hydro Renewable Total Yoy (%)
Central 58,820 7,238 — 6,780 12,126 1,632 86,597 2
State 65,367 7,119 364 — 29,879 2,348 105,076 1
Private 76,518 10,581 274 — 3,394 73,661 164,428 8
Total 200,705 24,937 638 6,780 45,399 77,642 356,100 5
Monthly capacity addition in Mar-2019 (MW)
Central 1,960 — — — — — 1,960 (24)
State 1,020 — — — — 17 1,037 61
Private 372 — — — — 2,569 2,941 (6)
Total 3,352 — — — — 2,586 5,938 (7)
YTD capacity addition up to Mar-2019 (MW)
Central 1,865 — — — 85 130 2,080 (51)
State 696 40 — — 21 351 1,108 114,088
Private 972 — (200) — — 11,614 12,386 31
Total 3,533 40 (200) — 106 12,095 15,574 14
1.9 GW of coal based capacities were decommissioned in FY2019

Status of decommissioned capacities, March fiscal year-ends, March 2019 (MW)
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
Decommissioned 210 214 — — — 860 — 705 — — — 100 —
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FUEL-WISE AND OWNERSHIP-WISE POWER GENERATION
Coal-based generation declined 0.5% yoy in March 2019
Gas-based generation declined 6.7% yoy in March 2019

Status of power generation in India, March fiscal year-end, March 2019
Generation in the month of Mar-2019 (MU)

Coal Gas Diesel Thermal (total) Nuclear Hydro Total
Central 29,944 1,644 — 33,457 3,249 3,447 40,153
State 27,847 1,012 14 29,197 — 4,756 33,953
Private IPP 28,620 996 — 30,577 — 351 30,929
Private UTL 1,464 133 — 1,596 — 279 1,876
Total 87,875 3,785 14 94,828 3,249 8,834 106,911
YTD generation up to Mar-2019 (MU)
Central 328,039 19,552 — 367,413 36,391 53,765 457,569
State 315,288 15,862 122 334,258 — 67,492 401,750
Private IPP 323,706 12,945 — 348,079 — 11,939 360,017
Private UTL 17,720 1,408 — 19,128 — 1,722 20,851
Total 984,754 49,767 122 1,068,878 36,391 134,918 1,240,187
Yoy growth for Mar-2019 (%)

Central 1.8 (2.8) NA 1.4 2.7 40.6 4.0
State (10.4) (18.0) (43.1) (10.5) NA 15.6 (7.6)
Private IPP 9.2 (1.0) NA 8.0 NA 14.5 8.1
Private UTL (10.6) 8.3 NA (9.3) NA 121.9 (0.5)
Total (0.5) (6.7) (43.1) (0.9) 2.7 26.2 1.0
Yoy growth for YTD FY2019 (%)
Central 4.1 (3.8) NA 3.2 (5.1) (2.3) 1.8
State 4.8 (3.3) (53.4) 4.2 NA 18.4 6.4
Private IPP 1.4 5.7 NA 1.6 NA (6.1) 1.3
Private UTL 1.5 4.0 NA 1.7 NA 13.6 2.6
Total 3.3 (1.1) (53.4) 2.9 (5.1) 6.9 3.1
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FUEL-WISE AND OWNERSHIP-WISE PLF OF POWER PLANTS
Coal-based capacities operated at improved PLF of 62% in March 2019
PLF for gas-based capacities declined to 20% in March 2019

Status of all India PLF across various fuels, March fiscal year-ends, March-2019
PLF in the month of Mar-2019 (%)

Coal Gas Diesel Thermal (total) Nuclear Hydro Grand total
Central 78% 31% 0% 78% 64% 31% 62%
State 59% 19% 5% 59% 0% 24% 46%
Private IPP 56% 13% 0% 56% 0% 16% 48%
Private UTL 60% 99% 0% 60% 0% 84% 64%
All India 62% 20% 3% 57% 64% 26% 52%
YTD PLF up to Mar-2019 (%)
Coal Gas Diesel Thermal (total) Nuclear Hydro Grand total
Central 73% 31% 0% 73% 61% 42% 61%
State 58% 26% 6% 58% 0% 28% 46%
Private IPP 55% 14% 0% 55% 0% 46% 48%
Private UTL 61% 89% 0% 61% 0% 44% 61%
All India 59% 23% 3% 55% 61% 34% 52%
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FUEL-WISE AND OWNERSHIP-WISE POWER GENERATION
Renewable generation stood at 9.2 BU in February 2019
Renewable generation saw a strong growth of 22.5% yoy in February 2019

Status of power generation in India, March fiscal year-end, February 2019
Generation in the month of Feb-2019 (MU)
Coal Gas Diesel Thermal (total) Nuclear Hydro Renewable Total
Central 25,823 1,410 — 28,913 2,783 2,751 — 34,447
State 24,177 905 10 25,318 — 3,997 — 29,315
Private IPP 23,954 773 — 25,540 — 271 — 25,811
Private UTL 1,357 115 — 1,472 — 115 9,219 10,806
Total 75,311 3,204 10 81,244 2,783 7,134 9,219 100,379
YTD generation up to Feb-2019 (MU)
Central 298,095 17,908 — 333,956 33,142 50,318 — 417,415
State 287,442 14,850 108 305,061 — 62,736 — 367,797
Private IPP 295,086 11,949 — 317,502 — 11,587 — 329,089
Private UTL 16,257 1,275 — 17,532 — 1,443 116,496 135,471
Total 896,879 45,982 108 974,051 33,142 126,084 116,496 1,249,772
Yoy growth for Feb-2019 (%)

Central (1.4) 0.7 NA (1.2) (17.6) 37.2 NA (0.5)
State (4.9) (20.9) (50.5) (5.9) NA 20.1 NA (3.0)
Private IPP 1.7 1.2 NA 1.0 NA 9.7 NA 1.1
Private UTL 1.5 10.5 NA 2.1 NA 14.7 22.5 19.2
Total (1.6) (6.1) (50.5) (2.0) (17.6) 25.6 22.5 0.9
Yoy growth for YTD FY2019 (%)
Central 4.3 (3.9) NA 3.3 (5.8) (4.3) NA 1.6
State 6.5 (2.1) (54.4) 5.9 NA 18.7 NA 7.9
Private IPP 0.7 6.3 NA 1.0 NA (6.6) NA 0.7
Private UTL 2.8 3.6 NA 2.9 NA 3.8 24.4 20.9
Total 3.7 (0.6) (54.4) 3.3 (5.8) 5.7 24.4 5.0
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POWER TRADING IN THE SHORT-TERM MARKET
Short-term market showed decline in market share to 10.4% in January 2019
Power exchange has a market share of 31% of short-term power, slight improvement seen after the decline in recent months
Details of tariff (Rs/kwh) and volume (MU) of power traded in the short-term market, March fiscal year-ends, February 2018 – January 2019
Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19
Price of power traded (Rs/unit)
Through traders 4.1 3.6 3.6 4.2 4.1 4.1 4.2 4.0 4.8 4.5 4.3 4.4
Through Exchanges
IEX 3.4 4.1 4.0 4.8 3.9 3.6 3.4 5.0 6.1 3.8 3.5 3.6
PXIL 2.1 3.9 3.4 NA 4.7 3.8 3.1 5.4 6.5 3.4 4.8 -
Through UI
NEW grid 2.2 2.3 2.3 2.6 2.1 2.1 2.0 2.3 2.2 2.2 2.2 3.5
Volume of electricity (MU)
Generation 91,621 105,162 103,455 110,606 102,999 102,417 105,670 108,046 113,366 99,888 100,537 100,359
Long-term PPA's 82,206 93,509 92,711 98,549 90,072 89,188 91,593 92,002 100,232 89,428 88,787 89,932
Short-term power sales 9,415 11,653 10,744 12,057 12,927 13,229 14,077 16,044 13,135 10,459 11,750 10,427
Bilateral 4,524 5,946 4,912 5,170 5,939 7,281 8,183 7,113 4,746 5,401 5,886 4,797
Power exchange 3,354 3,979 4,061 4,916 4,981 4,054 3,980 5,740 6,509 3,406 3,059 3,281
Unscheduled Interchange (UI) 1,538 1,728 1,771 1,971 2,007 1,894 1,915 3,191 1,879 1,652 2,805 2,349
Composition of power sales
Long-term PPA's (%) 89.7 88.9 89.6 89.1 87.4 87.1 86.7 85.2 88.4 89.5 88.3 89.6
Short-term power sales (%) 10.3 11.1 10.4 10.9 12.6 12.9 13.3 14.8 11.6 10.5 11.7 10.4
Short-term power trading profile (%)
Bilateral 48.0 51.0 45.7 42.9 45.9 55.0 58.1 44.3 36.1 51.6 50.1 46.0
Power exchange 35.6 34.1 37.8 40.8 38.5 30.6 28.3 35.8 49.6 32.6 26.0 31.5
Unscheduled Interchange (UI) 16.3 14.8 16.5 16.4 15.5 14.3 13.6 19.9 14.3 15.8 23.9 22.5
Source: CERC, Kotak Institutional Equities
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IEX—VOLUME AND PRICE TRENDS
Cleared volumes on exchange declined 15% yoy in March 2019
Cleared volumes declined to 3.3 BU due to weak demand in March 2019 Merchant tariffs in spot markets declined to Rs3.1/unit in March 2019
Monthly volumes traded on IEX, Mar 2017—Mar 2019 (MU) Market clearing price on IEX, Mar -17—Mar -19 (Rs/kwh)
Cleared Sell Bids Buy Bids 7.0
9,000
8,000 6.0
7,000
5.0
6,000
5,000 4.0 3.12

4,000
3.0
3,000
2,000 2.0
May-18
May-17
May-18
May-17
Mar-19
Mar-17
Mar-18
Aug-17
Aug-18
Aug-17
Aug-18
Apr-17
Jul-17
Sep-17
Nov-17
Apr-18
Mar-18
Jul-18
Sep-18
Nov-18
Mar-17
Mar-19
Dec-17
Feb-18
Dec-18
Feb-19
Nov-18
Nov-17
Apr-17
Jul-17
Oct-17
Dec-17
Oct-18
Sep-17
Apr-18
Jul-18
Dec-18
Oct-17
Oct-18
Sep-18
Feb-19
Jun-18
Feb-18
Jun-17
Jan-18
Jan-19
Jun-17
Jun-18
Jan-18
Jan-19
Source: IEX, Kotak Institutional Equities Source: IEX, Kotak Institutional Equities
Forward trades in DEEP show a spike in tariffs going into summer months
Volumes (MW) and prices (Rs/kwh) under DEEP
Capacity contracted (MW) Avg. Price (Rs/unit)
14,000 8.0
12,000 7.0
6.0
10,000
5.0
8,000
4.0
6,000
3.0
4,000
2.0
2,000 1.0
- 0.0
Mar-18
Mar-16
Mar-17
Mar-19
Mar-20
Dec-17
Dec-16
Dec-18
Dec-19
Sep-17
Sep-16
Sep-18
Sep-19
Jun-18
Jun-16
Jun-17
Jun-19
Source: DEEP, Kotak Institutional Equities
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GENERATION PROFILE FOR KEY PLAYERS
NHPCs generation showed increase in generation due to unseasonal rains in North
NTPC’s generation increased 2% yoy in March 2019 NHPC’s generation has shown an improvement in March 2019
Monthly generation of NTPC, March fiscal year-ends (BU) Monthly generation of NHPC, March fiscal year-ends (BU)
Coal Gas Hydro
23.8 24.0 23.7 22.9 24.3 4.0
25 23.0 22.9 23.3
21.7 21.6 21.7 22.3 3.3 3.3
20.8 3.5
2.9
20 3.0 2.7
2.4
2.5
15 1.9
2.0 1.6
1.6
23.0 22.2 23.0 22.4 22.2 22.3 22.6 23.6 1.3
10 20.8 20.6 20.6 21.2 20.2 1.5 1.2
0.9 0.9
1.0 0.7
5 0.5
-
-
May-18
Aug-18
Nov-18
Mar-18
Mar-19
Dec-18
Oct-18
Jul-18
Apr-18
Jun-18
Feb-19
Sep-18
Jan-19
May-18
Aug-18
Mar-19
Mar-18
Nov-18
Jul-18
Dec-18
Apr-18
Sep-18
Oct-18
Jun-18
Jan-19
Feb-19
Source: CEA, Kotak Institutional Equities Source: CEA, Kotak Institutional Equities
Adani Power’s generation showed sharp improvement in March 2019 CESC’s generation at Dhariwal plant has remained flat in recent months
Adani’s monthly generation, March fiscal year-ends (BU) CESC’s monthly generation, March fiscal year-ends (BU)
Mundra Kawai Tiroda Udupi 1.4 Kolkata Dhariwal Haldia
7 1.4 1.3 1.3
6.4 1.3
6.1 1.2 1.2 1.2 1.2
5.7 5.9
6 5.4 0.7 1.2 1.1 1.1 1.1
5.3 5.2 0.8 0.3 0.3 0.4 0.4 0.4
5.0 0.4 1.0
4.6 0.1 0.3 1.0 0.4 0.4 0.4 0.9
5 0.4 0.4
0.1 0.6 2.1 2.2 0.4
2.1 2.1 0.4 0.3 0.4
1.7 1.8 0.8
4 3.3 1.7 0.4 0.3
1.8 0.3 0.3 0.3
2.8 2.0 0.2 0.2 0.2 0.2
0.4 0.6 0.8 0.0 0.2 0.2
3 2.4 2.4 0.7 0.7 0.6
0.8 0.9 0.3 0.3 0.1
0.6 0.6
0.7 0.6 1.3 0.7 0.4
2
1.5 0.4 2.8 2.6 2.8 2.6 2.9 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.5
1.3 1.4 2.1 2.4 2.3 0.2 0.5 0.5
1 1.7 0.4 0.4
0.4 1.2
0.2
0.2 0.3 0.3
- 0.1 -
May-18
Aug-18
Nov-18
Dec-18
Mar-19
Mar-18
Jul-18
Oct-18
May-18
Mar-19
Apr-18
Jun-18
Sep-18
Mar-18
Jan-19
Feb-19
Aug-18
Jul-18
Nov-18
Dec-18
Sep-18
Apr-18
Oct-18
Feb-19
Jun-18
Jan-19
Source: CEA, Kotak Institutional Equities Source: Ministry of Coal, Kotak Institutional Equities
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GENERATION PROFILE FOR KEY PLAYERS
Generation at Reliance Power’s Butibori and Rosa plants was substantially low in March 2019
Only Sasan contributed to Reliance Power’s overall generation in March 2019 JSW Energy saw an improvement in generation in March 2019
RPWR’s monthly generation, March fiscal year-ends (BU) JSW’s monthly generation, March fiscal year-ends, (BU)
4.5 Sasan Butibori Rosa Ratnagiri Rajwest Vijaynagar Hydro
4.0 3.8 3.0
3.6 3.6 3.5 3.6
3.5
3.5 0.6 3.3 3.3 3.2 3.2 2.3 2.3 2.4 2.4
0.5 2.5 2.3 2.3
0.5 0.6 3.0 0.6 0.7 0.0 3.0
0.3 0.4 0.2 0.3 0.3 0.3
3.0 0.2 0.2 0.2 0.1 2.7 0.0 1.9 0.4
0.2 0.4 0.2 0.4 0.2 0.1 2.0 0.7
2.5 0.2 0.1
0.0 1.7 0.9 1.0 0.9 1.7 1.6 1.6
0.2 0.4 0.6
0.1 0.2 1.4 1.3
2.0 1.5 0.4 0.4 0.1 0.1
0.4 0.2 0.3 0.2 0.2 0.1 0.3
0.7 0.3 0.3 0.7 0.2
1.5 2.9 2.8 2.9 2.9 2.9 0.2
2.7 2.7 2.7 2.8 2.8 2.6 1.0 0.6 0.6 0.6 0.5 0.6 0.5
2.4 2.5 0.6
1.0 0.5 0.6 0.5 0.4
0.5 0.9 0.8
0.5 0.6 0.7 0.7 0.7 0.7 0.6 0.7 0.6 0.7
0.5 0.5
- -
May-18
May-18
Mar-18
Mar-19
Aug-18
Aug-18
Jul-18
Nov-18
Apr-18
Sep-18
Nov-18
Dec-18
Mar-19
Mar-18
Dec-18
Oct-18
Oct-18
Jul-18
Feb-19
Apr-18
Jun-18
Sep-18
Jun-18
Jan-19
Feb-19
Jan-19
Tata Power’s generation at Mundra increased 17% yoy in March 2019 JSPL’s generation at Tamnar II improved to 0.7 BU in March 2019
TPWR’s monthly generation, March fiscal year-ends (BU) JSPL’s monthly generation, March fiscal year-ends (BU)
Mundra Maithon Mumbai thermal Mumbai hydro Others 4.3 1.4 Tamnar I Tamnar II
4.5 4.1
4.0 3.9
4.0 3.8 1.2
3.7 3.6 3.5 3.7
3.5 1.0 1.0
3.4 0.5 0.6
3.5 0.6 3.2 0.4 0.9 0.9
0.6 1.0
0.6 2.8 0.5 0.5 0.8 0.8
3.0 0.6 0.5 0.7 0.6 0.7 0.8 0.8 0.8 0.8
0.7 0.6 0.7 0.8
0.4 0.6 0.6 0.8
2.5 0.7 0.6 0.6 0.7
0.7 0.6 0.5 0.6 0.7
2.0 0.5 0.6 0.4 0.7
0.5 0.5 0.7
0.6 0.5 0.5
0.6 0.6 0.6
1.5 0.4
2.5 2.7 2.7 2.7 0.4
2.2 2.1 2.3 2.2 2.3
1.0 2.0 1.9 2.0
1.4 0.2 0.3 0.4 0.4
0.5 0.3 0.3 0.3 0.3 0.2 0.3
0.2 0.2 0.2 0.2
- -
May-18
Aug-18
Nov-18
Mar-18
Jul-18
Dec-18
Mar-19
Apr-18
Sep-18
Oct-18
Feb-19
Jun-18
Jan-19
May-18
Mar-18
Aug-18
Mar-19
Nov-18
Jul-18
Sep-18
Apr-18
Dec-18
Feb-19
Oct-18
Jun-18
Jan-19
Kotak
KotakInstitutional
14
PLF PROFILE OF KEY PLAYERS
PLF for NHPC’s hydro plants increased to 44% in March 2019
Coal PLFs of most players remained range-bound in March 2019

Fuel-wise / plant-wise break-up of monthly PLF for key players, March fiscal year-ends (%)`
Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
NTPC
Coal 92 89 92 83 82 82 85 90 89 89 91 81 95
Gas 24 24 26 19 17 15 23 38 20 17 19 16 19
Hydro 13 17 31 67 97 109 74 32 21 16 14 17 18
NHPC
Hydro 25 43 66 78 90 91 74 51 35 24 18 33 44
Adani Power
Mundra 7 4 8 37 61 81 71 67 51 76 82 84 84
Kawai 18 32 40 40 58 64 81 93 76 76 79 81 70
Tiroda 54 57 61 54 74 71 70 86 86 86 84 80 90
Udupi 77 73 66 50 12 14 50 88 67 32 31 37 74
CESC
Kolkata 60 60 62 60 61 62 60 61 42 43 55 51 53
Dhariwal 52 79 82 72 50 45 51 76 73 69 43 36 50
Haldia 96 94 93 88 95 96 97 94 87 84 66 77 79
Reliance Power
Sasan 98 100 97 95 82 91 89 93 99 99 95 98 98
Butibori 74 43 43 50 52 37 97 52 52 63 19 - -
Rosa 67 63 61 67 41 47 66 73 28 1 7 9 32
JSW Energy
Ratnagiri 64 80 96 77 60 55 78 95 82 65 76 73 77
Rajwest 79 77 83 74 63 75 76 83 60 58 70 60 66
Vijaynagar 56 65 62 25 43 46 62 90 45 35 37 32 40
Hydro 15 20 39 94 109 98 77 34 22 17 15 12 15
Tata Power
Mundra 83 75 66 49 62 70 71 78 76 90 91 87 91
Maithon 92 87 91 83 69 77 60 80 80 88 75 83 85
Mumbai thermal 53 51 52 48 38 46 53 54 45 45 34 43 48
Mumbai hydro 39 42 49 35 56 44 39 39 30 32 41 35 86
JSPL
Tamnar I 24 23 46 52 43 38 40 51 41 22 33 27 35
Tamnar II 31 49 52 33 38 30 35 45 26 26 51 47 38
Kotak
KotakInstitutional
15
PAF PROFILE FOR NTPC’S PLANTS
PAF for NTPC’s plants improved in March 2019 on account of improvement at Kudgi & Mauda
PAF for NTPC’s plants improved in March 2019

Unit-wise break-up of monthly PAF for NTPC’s plants, March fiscal year-ends (%)
Plant name Units Capacity (MW) Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19
Anta GT All 419 99 99 56 89 97 98 98 93 97 101 102 101 100
Auraiya GT All 663 74 100 61 91 95 98 98 96 95 97 100 100 100
Barh II 1,2 1,320 100 93 84 95 100 90 78 93 91 96 97 78 86
Bongaigaon I 1,2 500 97 88 85 97 97 94 70 59 87 0 0 0 0
Dadri GT All 830 100 90 38 76 97 98 97 95 99 102 100 100 95
Dadri NCTPP 1,2,3,4 840 100 78 95 100 92 101 98 75 80 94 75 100 96
Dadri NCTPP 5,6 980 56 97 88 94 92 102 104 99 91 100 98 81 50
Farakka 1,2,3,4,5 1,600 68 51 75 94 87 81 95 82 97 96 96 98 100
Farakka 6 500 89 94 95 78 89 93 94 93 71 93 96 90 95
Gandhar GT All 657 99 91 80 89 100 80 62 67 68 96 102 103 90
Kahalgaon 1,2,3,4 840 73 94 96 92 75 91 96 90 88 95 96 98 85
Kahalgaon 5,6,7 1,500 98 97 75 75 82 99 75 83 92 98 99 98 96
Kawas GT All 656 99 99 86 98 100 100 101 96 98 100 98 93 81
Kol Dam All 800 92 100 107 110 110 110 109 110 106 107 108 107 110
Korba 1,2,3,4,5,6 2,100 98 97 89 89 81 80 74 87 92 81 85 97 101
Korba 7 500 93 99 92 90 93 98 76 87 100 90 90 100 100
Mauda I 1,2 1,000 83 85 53 53 85 51 86 96 104 102 103 103 100
Ramagundem 1,2,3,4,5,6 2,100 98 101 90 91 74 97 94 74 95 95 94 95 81
Ramagundem 7 500 102 93 93 99 100 100 95 99 45 19 100 92 101
Rihand 1,2 1,000 70 55 89 93 99 98 86 87 88 65 101 98 102
Rihand 3,4 1,000 97 99 64 58 98 101 101 101 96 99 88 101 91
Rihand 5,6 1,000 100 95 100 91 100 101 88 50 91 93 101 101 101
Simhadri 1,2 1,000 102 103 98 102 96 100 70 51 59 100 92 102 93
Simhadri 3,4 1,000 91 103 58 52 98 49 69 91 98 103 103 103 94
Sipat 1,2 1,000 61 96 99 100 100 91 99 97 91 90 50 86 99
Singrauli All 2,000 71 62 82 77 64 83 93 94 103 101 92 98 99
Sipat 3,4,5 1,980 94 97 92 83 67 92 94 100 95 100 98 95 99
Talcher New 3,4,5,6 2,000 101 95 94 86 59 65 67 68 87 97 93 95 101
Talcher New 1,2 1,000 99 91 94 87 81 80 81 80 79 38 54 84 95
Unchahar 1,2 420 100 96 98 98 103 77 74 100 102 101 105 104 105
Unchahar 3,4 420 100 99 100 100 55 85 105 93 105 104 102 104 102
Unchahar 5 210 100 53 55 100 101 89 104 105 105 105 105 105 91
Unchahar 6 500 0 0 0 0 0 0 0 0 0 34 80 84 71
Vindhyachal 1,2,3,4,5,6 1,260 84 83 83 93 93 88 76 93 93 98 101 98 90
Vindhyachal 7,8 1,000 96 98 100 72 58 90 92 85 100 100 99 100 99
Vindhyachal 9,10 1,000 100 95 97 96 99 101 101 100 82 67 95 101 101
Vindhyachal 11,12 1,000 100 99 100 100 99 59 99 97 99 100 100 100 100
Vindhyachal 13 500 100 96 99 96 97 102 101 95 102 102 72 44 102
Mauda I 3,4 1,320 60 71 59 73 80 86 69 42 62 98 97 99 104
Kudgi I All 2,400 99 99 98 116 97 100 75 35 44 67 81 95 102
Solapur 1 660 83 87 87 73 87 50 54 96 101 100 100 100 100
Total 41,976 89 89 84 87 85 87 85 82 87 90 92 95 94
Kotak
KotakInstitutional
16
OUTSTANDING DUES TO GENERATION AND DISTRIBUTION COMPANIES
Outstanding dues from SEBs have been on the rise in recent months
SEBs have around 4 months of dues payables to generation companies NTPC has the highest receivables from various SEBs
SEBs’ outstanding dues to generation and distribution companies across India (Rs bn) Dues recoverable for key generation companies (Rs bn)
450 Outstanding (Rs bn) [LHS] Oustanding (months) [RHS] 5 NTPC Tata Power NHPC
250
400
350 4 25
200 25
30 25 10
27 10
300 25 30 10
24 14 15
3 150 19 14
250 15
18 14 13
17
415
18
411
408
13 13
200
372
372
371
371
366
12
355
355
2 100
331
329
16
320
318
317
314
185
303
300
300
150 13 165 175
143 152 157
125 132 140
100 50 103 115 108
1
77
50
- 0 -
May-18
Aug-18
Nov-18
Mar-18
Dec-18
Jul-18
Oct-18
Apr-18
Sep-18
Jun-18
Jan-18
Feb-18
Jan-19
May-18
Aug-17
Aug-18
Nov-17
Nov-18
Mar-18
Oct-17
Oct-18
Jul-17
Dec-17
Jul-18
Dec-18
Apr-18
Feb-18
Jun-18
Sep-17
Sep-18
Jan-19
Jan-18
Source: SEB, Kotak Institutional Equities Source: SEB, Kotak Institutional Equities
Kotak
KotakInstitutional
17
VOLTAGE-WISE AND OWNERSHIP-WISE T&D CAPACITY ADDITION
India added 2,868 ckt kms in March 2019 compared to 3,587 ckt kms in March 2018
Transmission capacity addition moderated in 4QFY19 PGCIL ordering activity slowed with ordering of just Rs268 mn in March 2019
Details of T&D capacity addition in India, March fiscal year-ends Ordering activity by PGCIL, March fiscal year-ends (Rs bn)
Conductor HVDC Substation
Monthly transmission capacity addition in Mar-2019 (ckt km) 80 Tower & Monthly
Transmission Line
transmission Transformer/Reactor
capacity addition in Mar-2018Others
(ckt km)
(kV) +/- 800 HVDC +/- 500 HVDC 765 400 220 Total Yoy (%) 70
Central — — — 799 — 799 (30)
60
State — — — 260 455 715 (70)
50
Private — — 936 418 — 1,354 1,439
Total — — 936 1,477 455 2,868 (20) 40
YTD transmission capacity addition up to Mar-2019 (ckt km) 30 YTD transmission capacity addition up to Mar-2018 (ckt km)
+/- 800 HVDC +/- 500 HVDC 765 400 220 Total Yoy (%)
20
Central — — 5,262 3,124 476 8,862 (4) 10 10
10 4 5 5 4
State — — — 3,225 6,132 9,357 (19) 1 - 2 2 2 2 0
Private — — 1,730 2,607 644 4,981 116 -
May-18
Aug-18
Mar-18
Mar-19
Nov-18
Jul-18
Dec-18
Oct-18
Sep-18
Apr-18
Jun-18
Jan-19
Feb-19
Total — — 6,992 8,956 7,252 23,200 0
Source: PGCIL, Kotak Institutional Equities

Monthly substation capacity addition in Mar-2019 (MVA) Monthly substation capacity addition in Mar-2018 (MVA)
(kV) +/- 800 HVDC +/- 500 HVDC 765 400 220 Total Yoy (%)
Central — — 3,500 815 — 4,315 (30) No new investment approvals were given in March 2019
State — — — 2,290 5,365 7,655 13 Investment approvals given by PGCIL, March fiscal year-ends (Rs bn)
Private — — — — — — NA 10 9
Total — — 3,500 3,105 5,365 11,970 (7)
9
YTD substation capacity addition up to Mar-2019 (MVA) YTD substation capacity addition up to Mar-2018 (MVA)
8
+/- 800 HVDC +/- 500 HVDC 765 400 220 Total Yoy (%) 7
7
Central — — 28,000 13,130 — 41,130 22 6
6
State — — — 12,505 20,065 32,570 (26) 5
5
Private — — — 2,575 2,900 5,475 (37) 4
4
Total — — 28,000 28,210 22,965 79,175 (8)
3
Source: CEA, Kotak Institutional Equities 2
1
- - - - - - - -
-
May-18
Aug-18
Nov-18
Mar-18
Mar-19
Jul-18
Oct-18
Dec-18
Apr-18
Feb-19
Sep-18
Jun-18
Jan-19
Source: PGCIL, Kotak Institutional Equities
Kotak
KotakInstitutional
18
COAL INDIA’S DISPATCHES AND PRODUCTION
Coal India’s dispatches in March 2019 increased by 8% yoy
Coal India reported increase in dispatches at 8% yoy in March 2019; production volume increased by 9.6% yoy
Subsidiary-wise monthly dispatch volumes of Coal India in FY2018, March fiscal year-ends (mn tons)
Growth (%) YTD Quarterly

Mar-19 Mar-18 Feb-19 yoy mom 2019 2018 (% chg.) 4QFY19 4QFY18 (% chg.)
Dispatches
ECL 5.80 5.10 4.82 13.7 20.3 50.4 43.6 15.5 15.7 14.0 12.1
BCCL 3.20 3.45 2.59 (7.2) 23.6 33.1 33.4 (0.7) 8.6 9.6 (10.8)
CCL 7.20 6.37 6.03 13.0 19.4 68.4 67.6 1.2 19.4 18.3 6.4
NCL 8.80 9.06 8.05 (2.9) 9.3 101.5 96.9 4.8 25.7 25.8 (0.2)
WCL 5.50 4.76 5.13 15.5 7.2 55.5 48.8 13.8 15.8 13.6 16.2
SECL 14.80 13.27 13.06 11.5 13.3 156.1 151.1 3.3 40.6 40.2 1.1
MCL 14.20 13.05 11.66 8.8 21.8 142.3 138.3 2.9 37.4 37.2 0.7
NEC 0.10 0.14 0.11 (28.6) (9.1) 0.8 0.9 (13.5) 0.3 0.4 (20.5)
CIL 59.60 55.20 51.45 8.0 15.8 608.1 580.3 4.8 163.5 158.9 2.9
Production
ECL 6.80 6.01 5.27 13.1 29.0 50.2 43.6 15.1 17.2 15.5 11.4
BCCL 3.70 4.00 2.85 (7.5) 29.8 31.0 32.6 (4.9) 9.5 10.6 (10.5)
CCL 13.20 12.96 7.01 1.9 88.3 68.7 63.4 8.4 27.1 26.1 3.7
NCL 9.30 9.07 8.34 2.5 11.5 101.5 88.5 14.7 26.9 25.6 5.0
WCL 9.10 7.95 5.88 14.5 54.8 53.2 46.2 15.1 21.1 18.5 14.0
SECL 18.90 15.47 14.12 22.2 33.9 157.4 144.7 8.8 46.6 43.0 8.4
MCL 18.10 16.70 14.48 8.4 25.0 144.2 143.1 0.8 45.8 43.8 4.7
NEC 0.10 0.13 0.09 (21.9) 11.1 0.7 0.8 (4.6) 0.3 0.4 (32.1)
CIL 79.20 72.29 58.04 9.6 36.5 606.9 567.4 7.0 194.4 183.4 6.0
Source: Company, Kotak Institutional Equities
Kotak
KotakInstitutional
19
COAL IMPORT PRICES AND E-AUCTION PREMIUMS
Decline in imported coal prices has offered some breather to power producers
Imported coal prices declined to US$69/ton in April 2019 Spot auction premiums declined to 75% in March 2019
Imported coal prices (US$/ton) and currency (Rs/$), March fiscal year-ends Monthly trend of coal e-auction premiums in FY2018, March fiscal year-ends
Coal (US$/ton) USD:INR (Rs)
Spot e-auction volumes (mn tons, LHS) Spot e-auction premium (%, RHS)
120 (%)
(mn tons) 131
10 140
9 111
100 104 120
8 95 92 102
93 97
7 87 84 100
80 76
74 73 75
80 6 65 67 80
63
5 58
47 60
4 42 44
32 35
60 3 29 40
2
20
1 5.4 4.1 4.2 3.2 3.9 3.4 3.1 4.3 5.2 9.1 4.6 6.0 3.8 3.4 3.5 3.6 2.4 2.2 2.6 0.2 1.0 3.4 4.8 3.1 4.2
40 0 -
Aug-15
Aug-16
Aug-17
Aug-18
Dec-17
Dec-15
Dec-16
Dec-18
Oct-17
Oct-15
Apr-16
Jun-16
Oct-16
Oct-18
Apr-15
Jun-15
Apr-17
Jun-17
Apr-18
Jun-18
Apr-19
Feb-16
Feb-17
Feb-19
Feb-18
May-18
May-17
Nov-17
Nov-18
Mar-17
Mar-18
Mar-19
Jul-17
Jul-18
Sep-18
Sep-17
Jan-19
Jan-18
Source: Bloomberg, Kotak Institutional Equities Source: Ministry of Coal, Kotak Institutional Equities
Monthly dispatches to power sector increased by 7% yoy in March 2019 Railways freight increased 7% yoy to Rs2.1/ton km in March 2019
Coal India’s dispatches to the power sector, March fiscal year-ends (mn tons) Distance of coal transportation for power by railways (km, Rs/ton km)
Dispatch to power (LHS, mn tons) YoY growth (RHS, %) Distance (km, RHS) Freight (Rs/ton km, LHS)
(mn tons) (%) 2.20 570
50 46 35
43 2.10
45 40 41
42 41 40 42 40 40 42 43 42 42 40 30 550
38 37 35 2.00
40 35 33 33 35 34 25
31 32 530
35 20 1.90
30 1.80 510
15
25
10 1.70
20 490
15 5 1.60
10 - 470
1.50
5 (5)
- (10) 1.40 450
Mar-16
Mar-19
Dec-16
Mar-17
Mar-18
Dec-17
Dec-18
Sep-17
Jun-16
Sep-16
Jun-17
Jun-18
Sep-18
May-17
May-18
Mar-17
Mar-18
Mar-19
Nov-17
Nov-18
Jul-17
Sep-17
Jul-18
Sep-18
Jan-18
Jan-19
Source: Coal India, Kotak Institutional Equities Source: Ministry of Coal, Kotak Institutional Equities
Kotak
KotakInstitutional
20
COAL INVENTORY
No plant had critical level of coal inventory as of March 2019
Coal inventory at plants improved in March 2019; no plants left with critical levels of coal inventory
Inventory position of coal across power plants in India, March fiscal year-ends (days of requirement)
Mar-2019 Feb-2019 Jan-2019

Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#)
North 26 — — 20 1 — 15 1 1
West 15 — — 14 2 2 12 1 3
South 13 — — 15 — — 13 — —
East 17 — — 14 — — 10 — —
All India 18 — — 16 3 2 12 2 4
Mar-2018 Feb-2018 Jan-2018

Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#) Days Critical (#) Super-Critical (#)
North 13 2 3 13 6 6 11 — 5
West 8 7 10 9 6 14 8 5 9
South 12 1 3 12 4 3 13 — 1
East 8 — — 6 6 5 6 — —
All India 10 10 16 10 22 29 9 5 15
Kotak
KotakInstitutional
21
GAS SUPPLY AND PRICES
Spot prices averaged at US$5.2/mmbtu in March 2019
Stable gas supply to power sector may help improve gas-based plant PLFs Spot prices have declined to US$5.2/mmbtu in April 2019
Gas consumption by power, March fiscal year-ends (mcm/day) Spot prices for gas, March fiscal year-ends (US$/MMBTU)
Domestic gas RLNG Price (US$/MMBTU)

45 41 25.0
40
40
36 35 35 36
33 33 33 33 34 33 33 33 34
35 32 32 31 12 33 32 32 13 33 20.0
29 30
30 6 11 7 28 6 8 10 5 8 28
5 6 7 7
5
8
6 6 11 8 6 8
5 7 5 15.0
25 4
20
10.0
15 29 28 26
27 27 27 27 27 26 27 27 26 28 28 27 27
24 23 24 25 23 23 25 25 25 23
10
5.0 5.2
5
0
-
May-17
May-18
Mar-17
Aug-17
Mar-18
Aug-18
Jul-17
Jul-18
Nov-18
Nov-17
Dec-17
Dec-18
Sep-17
Apr-18
Apr-17
Sep-18
Oct-17
Oct-18
Feb-17
Feb-19
Jun-17
Feb-18
Jun-18
Jan-17
Jan-18
Jan-19
Oct-14
Oct-15
Oct-17
Oct-18
Oct-12
Apr-13
Oct-13
Apr-14
Apr-15
Apr-16
Oct-16
Apr-17
Apr-18
Apr-19
Apr-12
Source: PPAC's gas monthly report, Kotak Institutional Equities Source: Sigma Insights, Kotak Institutional Equities
Kotak
KotakInstitutional
22
VALUATION SUMMARY AND STOCK PERFORMANCE
Indian power utilities—attractive valuations, with growth visibility
Summary valuation of Utilities companies
Share price performance

Mkt Cap. Price 1-month 3-month 12-month Target Div Yield (%) P/E (X)
Rating (US$ bn) 23-Apr (%) (%) (%) (Rs) 2018 2018 2019E 2020E 2021E
CESC BUY 1.3 689 (3.0) 0.5 (15.5) 800 1.7 10.3 11.0 7.1 6.4
JSW Energy REDUCE 1.7 72 9.2 5.7 (14.3) 67 — 23.4 16.5 13.2 12.5
NHPC ADD 3.4 23 (5.3) (7.9) (15.3) 28 6.0 9.5 8.6 8.6 6.7
NTPC BUY 19.0 134 (0.7) 14.5 (7.2) 158 3.1 12.8 12.3 10.9 9.6
Power Grid BUY 14.5 193 (2.8) 3.3 (6.5) 235 2.7 12.2 10.5 9.0 8.1
Tata Power BUY 2.6 68 (5.9) (8.5) (19.9) 85 — 12.8 15.6 13.1 9.0
EV/EBITDA (X) P/BV (X) ROCE (%) ROE (%)

2018 2019E 2020E 2021E 2018 2019E 2020E 2021E 2018 2019E 2020E 2021E 2018 2019E 2020E 2021E
CESC 7.2 7.1 5.8 5.3 0.8 0.7 0.7 0.6 5.7 6.4 7.8 8.0 6.7 6.7 10.0 10.2
JSW Energy 6.9 6.0 5.1 4.6 1.1 1.0 0.9 0.9 2.7 6.2 6.5 5.9 4.7 6.2 7.2 7.1
NHPC 9.2 8.1 7.9 6.8 0.8 0.8 0.7 0.7 4.4 4.8 4.4 5.0 8.5 9.1 8.8 10.9
NTPC 11.0 9.6 8.5 7.2 1.3 1.2 1.1 1.1 5.7 5.9 6.2 6.8 10.4 10.2 10.8 11.4
Power Grid 8.5 7.6 7.0 6.6 1.9 1.7 1.5 1.4 8.0 8.4 9.0 9.1 15.8 16.7 17.6 17.6
Tata Power 10.3 10.1 10.4 9.9 1.2 1.1 1.0 0.9 5.2 5.1 20.2 2.7 10.7 7.5 8.2 10.9
Source: Bloomberg, Kotak Institutional Equities estimates
Kotak
KotakInstitutional
23
POWER DEMAND—ANNUAL TRENDS
All-India power demand has grown at 5% CAGR over the past 10 years
Demand has picked up at a faster pace in South and West region in comparison to North
All-India power requirement (BU), growth (%) and energy deficit (%), March fiscal year-ends
Requirement (BU) Growth (%) Energy deficit (%)

2009 2014 2016 2018 2019 1-Year 3-Year 5-Year 10-Year 2014 2016 2018 2019
Delhi 22 27 30 32 32 1 3 4 4 — — — —
Haryana 29 43 48 51 54 6 4 4 6 1 — — —
Punjab 42 48 50 55 56 2 4 3 3 2 — — —
Rajasthan 38 58 67 71 80 12 6 7 8 — — 1 —
Uttar Pradesh 69 95 106 120 117 (3) 3 4 5 14 13 1 1
Northern Region 227 309 340 372 384 3 4 4 5 6 5 2 1
Chattisgarh 15 19 26 26 27 4 2 7 6 1 1 — —
Gujarat 67 88 104 110 117 7 4 6 6 — — — —
Madhya Pradesh 42 49 62 70 73 4 5 8 6 — — — —
Maharashtra 122 126 142 150 158 6 4 5 3 2 — — —
Western Region 254 295 347 368 388 5 4 6 4 1 — — —
Andhra Pradesh 72 96 50 58 64 10 8 (8) (1) 7 — — —
Karnataka 43 64 64 68 73 7 4 3 5 10 5 — —
Kerala 18 22 23 25 25 0 2 3 4 2 1 — —
Tamil Nadu 70 94 97 106 109 3 4 3 5 6 1 — —
Southern Region 204 277 288 320 341 6 6 4 5 7 2 — —
Bihar 11 15 24 27 30 11 8 14 11 4 1 2 —
Orissa 21 25 27 29 31 8 5 5 4 2 1 — —
West Bengal 31 43 47 51 54 6 4 5 6 — — — —
Eastern Region 82 108 125 137 145 6 5 6 6 1 1 1 —
North Eastern Region 9 13 14 16 17 2 5 5 6 6 5 3 3
All India 777 1,002 1,114 1,213 1,274 5 5 5 5 4 2 1 1
Note:
Growth rates for Andhra Pradesh have been adjusted for the split of the state into Telanagana and Andhra Pradesh
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GENERATION CAPACITY—ANNUAL TRENDS
All-India generation capacity stands at 356 GW as of March 2019 from 148 GW in 2009
Private sector players have played a dominant role in capacity addition Coal continues to dominate the overall capacity profile
Ownership-wise All-India generation capacity, March fiscal year-ends (GW) Ownership-wise coal-based capacity, March fiscal year-ends (GW)
Central State Private 356 Central State Private Total

360 341 250
327
298
310 197 201
268 185 192
164 200
260 243 152
223 143 165
120
200 98 145 76 77
210 83 150 69 73
174 69 130
159 58
148 54 112
160 37 46
23 29 104 105 94 35
97 102 104 100 84 23
110 89 92 78 65 65
82 86 13 64 65
76 79 5 8 58
52 54
60 47 49
76 80 85 87 50 43 45
51 54 60 65 68 73
49
10 48 51 54 57 59
34 39 44 46
30 31
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 -
(40)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Gas-based capacity addition has been negligible over the last year State sector still dominates hydro capacities
Ownership-wise gas-based capacity, March fiscal year-ends (GW) Ownership-wise hydro capacity, March fiscal year-ends (GW)
Central State Private Total
Central State Private Total 50
40
45
3 3 3
35 3
40 3 3
1 3 3
30 35 1 1
25 25 25
25
25 23 30
22
20 30 30 30
18 25 27 28
20 17 18 10 11 11 11 27 27 27
9 27 27 27
15 8 20
7
15 7 7
6 15
5
10 7 7 7 7 7 7
4 5 6 10
4 4
5 5 9 10 11 12 12 12 12
7 7 8 8 7 7 7 9 9 9 9
7 7 7 7
- -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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GENERATION—ANNUAL TRENDS
Coal-based generation accounted for 79% of the overall generation in India
Private sector has significantly stepped up its contribution over the years Coal overwhelmingly dominates India’s generation profile
Ownership-wise All-India generation, March fiscal year-ends (BU) Ownership-wise coal-based generation, March fiscal year-ends (BU)
Central State Private Central State Private

1,300 1,240 1,100
1,198 985
1,200 1,153 949
1,103 909
1,100 1,044 862
962 381 900 800
1,000 907 373 341
872 369 714 335
900 282 348 659 331
806 700 309
766 184 226 585 248
800 718 140 193
116 515 535 141
700 67 93 480
402 88
350 376 500 44 63 315
600 367 345 26 281 300
368 347 350 280 273
500 348 343 272 270 259
345 255 262 256
400 300
300 328
448 458 248 262 272 280 297 315
200 364 376 385 395 409 433 100 199 209 216 225
304 324 346
100
- (100) 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Some respite in gas-based generation, though far from the peaks of 2011 Private sector has made little in-roads in hydro-based generation
Ownership-wise gas-based generation, March fiscal year-ends (BU) Ownership-wise hydro generation, March fiscal year-ends (BU)
Central State Private Central State Private
120 135 135
140 131 129
110 122 126
100 10 121 14
100 97 15 114 9 114 11
93 120 14
107 12 13
90 5 5 10
100 5
80 73 38
35 33
70 67 71 73 68 67
80 53 51 57
20 64 63 56
60 50 50 60
21 47 49
50 21 20 21 45 41 60
40 20 14 13 14
17 11 8 15
40
30 15 16 16
14 16 15 51 51 51 57 58 55 54
20 38 40 37 20 43 41 46 48
31 27
10 17 16 16 20 20 20
- -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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CAPACITY UTILIZATION—ANNUAL TRENDS
Capacity addition has grown at pace far ahead of demand growth leading to drop in utilizations
Private sector capacity utilization have taken a bigger hit Coal PLFs have dropped below 60% in 2019
Ownership-wise All-India PLF, March fiscal year-ends (%) Ownership-wise PLF of coal plants, March fiscal year-ends (%)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
- -
Central State Private All-India Central State Private All-India
PLFS of gas-based capacities have been struggling since the last four years State-hydro plants have consistently operated at lower utilizations
Ownership-wise PLF of gas plants, March fiscal year-ends (%) Ownership-wise PLF of hydro plants, March fiscal year-ends (%)
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 60 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
100
90
50
80
70 40
60
50 30
40
20
30
20
10
10
- -
Central State Private All-India Central State Private All-India
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SHORT-TERM MARKET—ANNUAL TRENDS
Tariffs in the bilateral market remain around Rs3.5/kwh, a sharp trend down from Rs7/kwh
Tariffs have gone up on exchanges in 2018 Short-term market has grown 4X since 2009
Segment-wise tariff trends in short-term market, March fiscal year-ends (Rs/kwh) Segment-wise volume trends in short-term market, March fiscal year-ends (BU)
Bilateral Exchange UI Bilateral (Direct) Bilateral Exchange UI

150 144
8.0
7.37.5 140
7.0 6.7 130 119 24
115
120
110 105
6.0 99 99 23
5.3 100 95 21
5.0 46
5.0 4.6 4.8 90 82 21 19
4.2 4.1 4.3 4.3 4.3 25
3.9 4.1 80 35
3.73.9 66 28 40
4.0 3.5 3.6 3.5 3.5 3.63.4 70 31
28 24 29
2.9 60 16
3.0 2.7 50
2.5 26 16 58
2.1 2.3 2.1 35 35
1.9 40 7 7 35
1.8 36 36 35 35
2.0 30 3 28
20 27
1.0 10 22 24 21
10 15 15 17 16 17
- 3 6
- 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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TRANSMISSION CAPACITY—ANNUAL TRENDS
Private sector plays an insignificant role in the transmission sector, dominated by state utilities
Adoption of high voltage transmission corridors is still in nascent stage Central sector transmission capacity largely represents PGCIL
All-India transmission capacity, March fiscal year-ends (‘000 cktkm) Central transmission capacity, March fiscal year-ends (‘000 cktkm)
+/- 800 HVDC 765 +/- 500 HVDC 400 220 +/- 800 HVDC 765 +/- 500 HVDC 400 220
450 413 180
391 159
400 368 160 150
342 141 12
350 140 129 11
313 11
291 175 115
300 269 275 169 120 11
255 163 106
236 157 98 99 11
250 221 100 91 10
149 84 10 101
145 79 10 98
200 140 141 10 92
135 80 10
128 10 89
150 123 181 83
172 60 80
158 76 77
100 147 71
136 40 61 65 6 6
113 118 126 6
88 97 106 6
50 9 9 9 34
9 42 20 6 25 29
9 9 9 24 31 35 6 20
- 7
3 7
4 9
5 9
6 6 11 19 4 6 6 6 5 6 6 6 6 10 16
- 3 3 4 5 6 4 6 6 6
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Growth in state owned transmission infrastructure has moderated Private sector has stepped up participation in transmission in recent times
State transmission capacity, March fiscal year-ends (‘000 cktkm) Private transmission capacity, March fiscal year-ends (‘000 cktkm)
240 224 35
214
220 202 31
192 30
200 181 27
172
180 163 164 25
156 25
160 142 148
163 20
140 156 20
151 18 21
120 145
133 138 19
100 129 129 15 13 17
118 124 11
80 112 14
10 8 13
60 7
10 2
40 4 8 2 2
54 58 5 6 2
20 36 40 44 48 5 7
28 29 30 32 33 - 2 5 5
4 2 2 2 2 3
- - 1 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Kotak
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SUBSTATION CAPACITY—ANNUAL TRENDS
India has 900K MVA of substation assets as of March 2019
States own 60% of India’s substation infrastructure Central sector is taking the lead in adoption of high voltage transmission
All-India sub-station capacity, March fiscal year-ends (‘000 MVA) Central sub-station capacity, March fiscal year-ends (‘000 MVA)
+/- 800 HVDC 765 +/- 500 HVDC 400 220 900 +/- 800 HVDC 765 +/- 500 HVDC 400 220 348
900 827 350
312 10
800 741 10
300 279
700 659 352
243 9 145
596 331
250
600 531 313 217 9 130
473 293 187 8 116
500 200
411 269 8 105 10
357 150 10
400 319 257 313 99
303 243 283 150 8 10
117 92
300 224 241 10
207 209 86 6 10
189 192 14 100 74 75 85 175
200 175 14 6 10 154
177 14 4 5 77 138
168 14 14 119
100 151 191 212 50 67 10 101
109 116 134 14 141 168 54 59 78
14 83 122 10 48
14 9 11 11
25 49 11 24
- 5 5 5 2 6 9 9 - 5 7
5 10
5 2 6 9 9
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Growth in state owned transmission infrastructure has moderated Private sector has stepped up participation in transmission in recent times
State sub-station capacity, March fiscal year-ends (‘000 MVA) Private sub-station capacity, March fiscal year-ends (‘000 MVA)
550 518 35 33 34
482
438 30
450 397
362 24 11 12
336 25
350 318 341
292 320
268 20 18
242 302 17 6
229 283 3 3
250
259 2 3
234 247 15 1
200 216 3 3
150 171 183
10 8
141 156 18 18
102 119 5 15
50 82 85 93 5 1 12 12
55 58 67 73 2 2 3
1 1
- 3
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1 1 3
(50) -
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Kotak
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30
DISCLOSURES
"Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report
accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or
views expressed in this report: Murtuza Arsiwalla, Samrat Verma."
Kotak Institutional Equities Research coverage universe

Distribution of ratings/investment banking relationships
Percentage of companies covered by Kotak Institutional
70%
Equities, within the specified category.
60%
Percentage of companies within each category for which Kotak
Institutional Equities and or its affiliates has provided
50%
investment banking services within the previous 12 months.
40% * The above categories are defined as follows: Buy = We

expect this stock to deliver more than 15% returns over the
27.9% 28.9% next 12 months; Add = We expect this stock to deliver 5-15%
30%
returns over the next 12 months; Reduce = We expect this stock
22.5%
20.6% to deliver -5-+5% returns over the next 12 months; Sell = We
20% expect this stock to deliver less than -5% returns over the next
12 months. Our target prices are also on a 12-month horizon
basis. These ratings are used illustratively to comply with
10%
4.4% 3.4% applicable regulations. As of 31/03/2019 Kotak Institutional
0.5% 0.0% Equities Investment Research had investment ratings on 204
0% equity securities.
BUY ADD REDUCE SELL
Source: Kotak Institutional Equities As of March 31, 2019
Kotak
KotakInstitutional
31
RATINGS AND OTHER DEFINITIONS/IDENTIFIERS
Definitions of ratings
BUY. We expect this stock to deliver more than 15% returns over the next 12 months.
ADD. We expect this stock to deliver 5-15% returns over the next 12 months.
REDUCE. We expect this stock to deliver -5-+5% returns over the next 12 months.
SELL. We expect this stock to deliver <-5% returns over the next 12 months.
Our Fair Value estimates are also on a 12-month horizon basis.
Our Ratings System does not take into account short-term volatility in stock prices related to movements in the market. Hence, a particular Rating may not strictly be in accordance with the
Rating System at all times.
Other definitions
Coverage view. The coverage view represents each analyst’s overall fundamental outlook on the Sector. The coverage view will consist of one of the following designations: Attractive,
Neutral, Cautious.
Other ratings/identifiers
NR = Not Rated. The investment rating and fair value, if any, have been suspended temporarily. Such suspension is in compliance with applicable regulation(s) and/or Kotak Securities policies
in circumstances when Kotak Securities or its affiliates is acting in an advisory capacity in a merger or strategic transaction involving this company and in certain other circumstances.
CS = Coverage Suspended. Kotak Securities has suspended coverage of this company.
NC = Not Covered. Kotak Securities does not cover this company.
RS = Rating Suspended. Kotak Securities Research has suspended the investment rating and fair value, if any, for this stock, because there is not a sufficient fundamental basis for determining
an investment rating or fair value. The previous investment rating and fair value, if any, are no longer in effect for this stock and should not be relied upon.
NA = Not Available or Not Applicable. The information is not available for display or is not applicable.
NM = Not Meaningful. The information is not meaningful and is therefore excluded.
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DISCLAIMER
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2. Such research analysts may not be associated persons of Kotak Mahindra Inc and therefore, may not be subject to NASD Rule 2711 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
3. Any U.S. recipients of the research who wish to effect transactions in any security covered by the report should do so with or through Kotak Mahindra Inc and (ii) any transactions in the securities covered by the research by U.S. recipients must be effected only through Kotak
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This report is distributed in Singapore by Kotak Mahindra (UK) Limited (Singapore Branch) to institutional investors, accredited investors or expert investors only as defined under the Securities and Futures Act. Recipients of this analysis / report are to contact Kotak Mahindra (UK)
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and our affiliates have investment banking and other business relationships with a significant percentage of the companies covered by our Investment Research Department. Our research professionals provide important input into our investment banking and other business selection
processes. Investors should assume that Kotak Securities Limited and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of this material and that the research professionals who were involved in preparing
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In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additionally, other important information regarding our relationships with the company or companies that are the subject of
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This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. We are not soliciting any action based on this material. It is for the general information of clients of Kotak
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(Kotak) Power Monthly Tracker, April 26, 2019

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Power Utilities

Monthly Sector Update

• 6 GW of capacity addition in March 2019, 15.6 GW of net capacity addition in FY2019

• Short-term market: weak trends on realization and market share

• Coal: dispatches increased during the month, as did production volumes

• Gas: declining generation, lower spot prices

120 Demand (LHS, BU) Energy deficit (RHS, %) 1.00 12

180 Peak demand (LHS, GW) Peak power deficit (RHS, %) 4 12

Source: CEA, Kotak Institutional Equities

Energy demand (MU)

Source: CEA, Kotak Institutional Equities

Peak demand (MW)

Source: CEA, Kotak Institutional Equities

Source: CEA, Kotak Institutional Equities

Installed capacity as of Mar-2019 (MW)

Source: CEA, Kotak Institutional Equities

1.9 GW of coal based capacities were decommissioned in FY2019

Source: CEA, Kotak Institutional Equities

Gas-based generation declined 6.7% yoy in March 2019

Generation in the month of Mar-2019 (MU)

Yoy growth for Mar-2019 (%)

Source: CEA, Kotak Institutional Equities

PLF for gas-based capacities declined to 20% in March 2019

PLF in the month of Mar-2019 (%)

Source: CEA, Kotak Institutional Equities

Renewable generation saw a strong growth of 22.5% yoy in February 2019

Yoy growth for Feb-2019 (%)

Source: CERC, Kotak Institutional Equities

5,000 4.0 3.12

Source: DEEP, Kotak Institutional Equities

Coal PLFs of most players remained range-bound in March 2019

Source: CEA, Kotak Institutional Equities

PAF for NTPC’s plants improved in March 2019

Source: CEA, Kotak Institutional Equities

Source: PGCIL, Kotak Institutional Equities

Growth (%) YTD Quarterly

Source: Company, Kotak Institutional Equities

Mar-2019 Feb-2019 Jan-2019

Mar-2018 Feb-2018 Jan-2018

Source: CEA, Kotak Institutional Equities

Domestic gas RLNG Price (US$/MMBTU)

Summary valuation of Utilities companies

Share price performance

EV/EBITDA (X) P/BV (X) ROCE (%) ROE (%)

Source: Bloomberg, Kotak Institutional Equities estimates

Requirement (BU) Growth (%) Energy deficit (%)

Source: CEA, Kotak Institutional Equities

Central State Private 356 Central State Private Total

Central State Private Central State Private

Bilateral Exchange UI Bilateral (Direct) Bilateral Exchange UI

Kotak Institutional Equities Research coverage universe

40% * The above categories are defined as follows: Buy = We

Source: Kotak Institutional Equities As of March 31, 2019

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