Budget 2012 have levered strong growth for power sector
Budget 2012 have levered strong growth for power sector by proposing
numerous policies in their favor. Giving relief to power producers, FM
Mr.Pranab Mukherjee granted them duty-free imports of coal and LNG,
extended tax breaks for new projects and allowed power projects to
retire part of their rupee debt and replace it with foreign borrowing,
which is much cheaper even after hedging costs. This would also
increase the ability of domestic banks to lend to the sector without
exceeding their exposure limits. Progressive measures, like increasing
the tax-free bond limit for power sector, reduction of withholding tax
from 20% to 5%, exemption on customs duties for import of thermal
fuels for power plants, will go a long way in reducing financial
burden, which will benefit both the suppliers as well as the consumers
of power. The sector has also been allowed enhanced depreciation on
selected items.
numerous policies in their favor. Giving relief to power producers, FM
Mr.Pranab Mukherjee granted them duty-free imports of coal and LNG,
extended tax breaks for new projects and allowed power projects to
retire part of their rupee debt and replace it with foreign borrowing,
which is much cheaper even after hedging costs. This would also
increase the ability of domestic banks to lend to the sector without
exceeding their exposure limits. Progressive measures, like increasing
the tax-free bond limit for power sector, reduction of withholding tax
from 20% to 5%, exemption on customs duties for import of thermal
fuels for power plants, will go a long way in reducing financial
burden, which will benefit both the suppliers as well as the consumers
of power. The sector has also been allowed enhanced depreciation on
selected items.
With FM Mr.Pranab Mukherjee reviving hopes for power, it is
undoubtedly one of the most promising sectors to look forward to.Insighttechnical recommend it's best picks from power sector for long term investment.
NEYVELI LIGNITE CORPORATION (513683)
Current: 87 Target: 120 in 4 months
undoubtedly one of the most promising sectors to look forward to.Insighttechnical recommend it's best picks from power sector for long term investment.
NEYVELI LIGNITE CORPORATION (513683)
Current: 87 Target: 120 in 4 months
NLC is a government-owned power generating company having its own
lignite mining company. It is recently announced as “Navratna” by
Government of India in April 2011. NLC spreads over an area of around
54 square km, comprising Neyveli Township and temporary colonies
around 32 blocks. The company runs the biggest open-pit lignite mines
in India and mines around 2.4 Crore tonnes of lignite annually for
fuel, with an installed capacity of 2490 MW of electricity per annum.
Neyveli Lignite Corporation reported a net profit of Rs 184.94 Crore
in the October-December quarter of FY12, a growth of 92.5% as compared
to Rs 96.07 Crore in a year ago quarter.Net sales rose 20.3% to Rs
1,045.99 Crore from Rs 869.21 crore year-on-year.
The Company has 50% joint venture with Tamil Nadu Electricity Board
and it’s announced its plans to invest about Rs.36, 900 Crore on power
generations and mining capacity augmentation by 2017. The plan also
includes development of power projects using other fuel feed. The
company is also planning to invest Rs.40,200 Crore to build power
plants in Tamil Nadu, Rajasthan and Uttar Pradesh. Strong expansion &
diversification plans to explore coal-based, wind and solar power
generation projects will add on strength to the cashbook. The coal
priced has risen, due to which Central Govt. has forced SEB to
increase Electricity Power tariff by 25-30%. This will directly
benefit NLC for ownership of their mines.
We recommend ‘BUY’ on the stock at CMP Rs. 86 with a target price of
Rs. 120 in 4 months.For more visit http://www.insighttechnical.net or call us on +919822226867
lignite mining company. It is recently announced as “Navratna” by
Government of India in April 2011. NLC spreads over an area of around
54 square km, comprising Neyveli Township and temporary colonies
around 32 blocks. The company runs the biggest open-pit lignite mines
in India and mines around 2.4 Crore tonnes of lignite annually for
fuel, with an installed capacity of 2490 MW of electricity per annum.
Neyveli Lignite Corporation reported a net profit of Rs 184.94 Crore
in the October-December quarter of FY12, a growth of 92.5% as compared
to Rs 96.07 Crore in a year ago quarter.Net sales rose 20.3% to Rs
1,045.99 Crore from Rs 869.21 crore year-on-year.
The Company has 50% joint venture with Tamil Nadu Electricity Board
and it’s announced its plans to invest about Rs.36, 900 Crore on power
generations and mining capacity augmentation by 2017. The plan also
includes development of power projects using other fuel feed. The
company is also planning to invest Rs.40,200 Crore to build power
plants in Tamil Nadu, Rajasthan and Uttar Pradesh. Strong expansion &
diversification plans to explore coal-based, wind and solar power
generation projects will add on strength to the cashbook. The coal
priced has risen, due to which Central Govt. has forced SEB to
increase Electricity Power tariff by 25-30%. This will directly
benefit NLC for ownership of their mines.
We recommend ‘BUY’ on the stock at CMP Rs. 86 with a target price of
Rs. 120 in 4 months.For more visit http://www.insighttechnical.net or call us on +919822226867
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