Power stocks glow on hopes Centre will hike import duty on equipment

Shares of domestic power equipment manufacturers are looking up in the morning trade riding on the news that the Government of India, at long last, may take a decision on hiking import duty on power equipment.

The GoI move, though might come with a rider that it was for power projects with a capacity of over 1,000 MW, perked up the power sector stocks because with even a single unit now having 660 MW capacity as a norm, this rider might not serve as any deterrent, particularly for mega power projects.

Among the BSE power index stocks,

ABB gained Rs 7.40 to Rs 773, BHEL gained Rs 3.70 to move up to Rs 233.35, Siemens gained Rs 9.40 to trade at Rs 695.50 and Thermax was up by Rs 6 to Rs 496.95.

Outside the power index,

BGR Energy Systems moved up to Rs 305.15, a gain of Rs 4.40 and L&T jumped by Rs 13.85 to Rs 1,415.05.

But as a section of power producers has voiced opposition to any hike in import duty as it would push up the project cost and consequently the cost of power produced, it remained to be seen what would be the quantum of duty the government might decide to levy.

The cautious reaction, though positive, of the markets reflected this predicament.