Here is what Moody s had to say about the country s infrastructure companies:
Power
The business models of rated power companies allow them to manage the current contraction in demand and withstand a moderate extension of the cash conversion cycle, which refers to the number of days it takes for a firm to convert its investments into cash flows from sales. That is because Indian power companies are dependent on state-owned distribution firms that are likely to be under financial stress due to lower demand.
In the event that demand stays low for longer and there is a subsequent cash squeeze, Moody s said the power companies have good access to liquidity and support.
India s second Covid wave to impact infra sectors, says Moody s
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India s second Covid wave to impact infra sectors: Moody s
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Moody s Investors Service in its latest report said that close to 15-20 per cent of wind and solar power projects underperformed during 2019-20. However, with portfolio diversification, a lot of green energy companies will withstand the slowdown, it said. Moody s said India s renewable energy sector grew by 20 per cent in the last five years. About 15-20 per cent of Indian wind and solar projects did not meet capacity utilisation targets in fiscal years 2019 and 2020 because of wind generation curtailments and lower irradiance for solar projects, which were responsible for 56 per cent and 68 per cent of the underperformance respectively,” says Abhishek Tyagi, a Moody’s Vice President and Senior Analyst. As a result, rated renewable energy companies’ EBITDA declined 2-5.6 per cent in fiscal 2020, said the report.