Utilities: Supreme Court-denies compensation, but with a rider - Kotak

Supreme Court—denies compensation, but with a rider. The Supreme Court has denied award of compensation for fuel cost under-recovery in the case of imported coal plants; however, it referred the case back to CERC to quantify the tariff relief to be provided to plants that had to resort to higher use of imported coal due to lack of availability of domestic coal, as directed by the government's policy in 2013. We downgrade Tata Power to REDUCE (from ADD) and maintain SELL rating on Adani Power, noting the ownership in coal mines and earnings from regulated assets for the former that allow it to better withstand the losses, and the already stretched balance sheet of the latter that may force incremental equity dilution.

Source : Equity Bulls

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