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The power generation in first two months of the second quarter of current financial year rose marginally by 1.5 per cent on-year due to heavy rainfall during these months, Emkay Global Financial Services said in a report.

This was sharply lower than 16 per cent growth in the first quarter of the current financial year, which had the impact of low base due to Covid-19.

August generation has been less than 1 per cent. On a 3-year CAGR basis, growth for the two months has been 3.5-5 per cent.

"A closer look into the electricity demand pattern suggests that heavy rains during July-August 2022 (up 30 per cent YoY) might be the main reason for the same. Both residential and agricultural demand has high corelation to weather conditions. As the rainy season recedes, we believe growth in power demand will normalize to the medium-term figure of ~5 per cent," the report said.

Hydro growth has been strong at 10 per cent, while Thermal and RE growth stood flat to moderate at 2 per cent.

While, coal production reported 11.4 per cent and 8.3 per cent YoY growth for July and August, respectively. Coal dispatch is up 8.5 per cent/5.4 per cent YoY for the two months, although there was some tapering in growth.

As per report, overall coal dispatch has been ~7 per cent for these two months, the power sector has received ~14 per cent higher coal in August 2023 as against August 2022 - YTD numbers stand at 20 per cent.

This is good compared to last year, when India faced good demand upsurge during Sep-Oct and many thermal units did not have enough inventory.