Order inflows in the power sector were poor in April 2011, but power generation registered an encouraging 7.6% growth year-on-year, and alternate energy sources did much better. Power stocks have by and large underperformed the market over the past three months
Power forms a vital part of infrastructure development. In India, recently, the sector has been riddled with poor order inflows. But the growth in power generation has been encouraging. Renewable forms of power generation also have shown strong growth over the past few months. There have been large orders for wind projects and nuclear power generation and hydro generation have crossed the targets set by the Central Electricity Authority (CEA) for April 2011.
According to a research report by IDFC Securities on the status of infrastructure development, "Order inflows (in infrastructure) in April 2011 fell sharply by 49% year-on-year, due to very few orders in the power generation segment, which has been the mainstay of order inflows."
Power generation has grown by 7.6% over the previous year for April 2011. In 2010-11, the power generation sector contributed 45% to the total order inflows of the infrastructure sector. Power transmission and distribution (T&D) was the second highest contributor with 16.9%.
However, orders for the power generation sector fell in April 2011 to Rs8 billion, which is the lowest in two years. Consequently, the order inflows for infrastructure overall during the month fell by half to Rs76 billion from the corresponding period a year ago.
But, IDFC says, there was some relief for the power sector in May. L&T and BHEL received a few large orders, and Gamesa got a large order from Caparo Energy for wind projects in India. This resulted in a 68% yearly jump in order bookings this month.
The highest growth in power generation was in the nuclear power segment that grew by 40.5% from 18,631 MU (power unit) in FY2009-10 to 26,182 MU in FY2010-11. Nuclear generation achieved a remarkable growth rate of 50.72% over March-April 2011 due to improved availability of nuclear fuel to the nuclear plants.
Nuclear power generated 2,660 MU in April, exceeding the target by 612 MU. Energy generated from hydro-electric stations (excluding import from Bhutan) during the month was 8,875 MU against the target of 7,522 MU. Hydro-based plants and coal-based plants registered a growth of 3.40% and 9.22% respectively in March-April 2011. Thermal power generation grew only by 3.4% due to the negative growth rate of gas-based stations.
Alternate energy generation has immense potential as generation of clean and renewable energy is top priority for the country. The growth in nuclear power generation and hydro power generation has been encouraging.
Unfortunately, the performance of power company stocks has not been great. The BSE Power index was down by 12.11% over FY2010-11, against a 10.96% gain by the Sensex in this period.
According to a chart prepared by IDFC, on the performance of power stocks in relation to the Sensex over the past three month, power equipment manufacturer ABB Ltd outperformed the Sensex by 23.5%, whereas the public sector unit BHEL was lower by 4.4%.
Among power utilities, Jaiprakash Power Ventures was the top performer, beating the Sensex by 26.2%. NTPC and Adani saw lower growth compared to the Sensex-they were 1.3% and 7.5% lower.
Most power transmission companies also displayed poor performance. Kalpataru and Jyoti Structures were 4.5% and 6.2% lower than the Sensex.
Journalist and RTI activist Vinita Deshmukh says any individual can use the Right to Information Act for the betterment of society and to find answers to everyday problems. At a Moneylife Foundation workshop, she described numerous instances where common citizens have persisted and succeeded along this road
There was a convict, who was sentenced to prison for murder. However, due to the good conduct he exhibited, he was put in an open cell. But when he protested about the quality of the food in the prison he was shifted back to a closed cell without being given any reason. He used the Right to Information (RTI) Act to obtain a copy of the Indian Prison Manual, then wrote to the media about the injustice done to him, and managed to get back to an open cell.
Narrating this incident at a seminar on 'How to use the RTI Act effectively', Vinita Deshmukh, journalist and RTI activist, said: "If a prisoner can use the RTI Act, why can't we? I don't say that we take on a huge scam, but there are several small matters which directly concern you, and which you can remedy."
Ms Deshmukh presented numerous case studies to illustrate how the RTI Act has been used by individuals for the betterment of society, or to find answers to everyday problems. She described how she had utilised information obtained by using the RTI, to make Pune residents aware of the environmental and civic laws that were being flouted by Dow Chemicals, which planned to set up a chemical plant under the garb of a 'research centre'. Under pressure of a growing popular agitation, the government subsequently called a halt to the project and Dow Chemicals pulled out.
Ms Deshmukh gave examples of how senior citizens, peasants and journalists have used the Act to obtain information and put pressure on the authorities to do their job and stop corruption. "Instead of waiting for 30 days and risking further delay for appellate follow-ups, use Section 4 of the RTI Act which allows any citizen to go to a public authority's office and inspect files and records," she said.
The journalist and RTI activist also talked about how grievances have been addressed almost immediately after filing an RTI application, and how sometimes even files that had gone missing, reappeared miraculously when the information was sought. "Government babus don't show it, but they are scared of the RTI. Use it as often as you can, and it will not only check corruption but also ensure better, speedy and efficient governance," she said.
Ms Deshmukh expressed optimism over the use of RTI in India. "India is much ahead of the United States in the public use of the Right to Information, and if we say that 35% of the applications filed are replied to satisfactorily, that is quite some achievement. If people take up the issue seriously, they can force the government to act properly," she said.
This programme, hosted by Moneylife Foundation, complemented earlier seminars on the RTI issue addressed by Ashok Ravat and Bhaskar Prabhu. Ms Deshmukh writes a column for Moneylife that also focuses on the effective use of RTI. Mr Ravat and Mr Prabhu both described their association with the RTI movement and gave tips on how to use RTI better.
Atul Auto has recommended a final dividend of Rs4 per share or 40% against 20% during previous year
Rajkot-based three wheeler manufacturer Atul Auto said that its net profit rose 108% to Rs9.43 crore for the year ended 31 March 2011 from Rs4.54 crore in the last fiscal.
During the 12-month period, the company's net turnover rose 69% to Rs201 crore.
According to SIAM, there is 57% increase in total sales of vehicles compared to overall market growth of 19.44%. The company has recommended a final dividend of Rs4 per share or 40% against 20% during previous year.
Vijay Kedia-director, Atul Auto Ltd said, "We are pleased to inform that company has beaten its own target of achieving 50% growth at the beginning of the year. In fiscal 2012 the company intends to penetrate its product across the country." Atul Auto is interested in acquiring controlling stake in some running units from auto or auto components field and company in consultation with few investment bankers. This will take some time and should happen in calendar year 2012, he further added.
On Tuesday, Atul Auto ended 1.38% to Rs128.40 on the Bombay Stock Exchange, while the benchmark Sensex gained 1.49% to 18,503.28.