Ministry of Power Draft Rules To Structurally De-Rate Diesel Genset Manufacturers: Systematix's Take
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Systematix Research Report
The Ministry of Power has published Draft Electricity Amendment Rules 2021 and invited comments from various stakeholders.
The Draft rules pose a serious concern on the survival of diesel generating set manufacturers like Cummins India Ltd. and Kirloskar Oil Engines Ltd. even though we would argue that the rules are very aggressive and impractical to be implemented over the proposed timeframe of five years.
Nevertheless, it poses a structural concern over the existing domestic business (50-80% of revenues) of the diesel generating set manufacturers and investors should keep away from these stocks until clarity emerges on the final rules and/or alternate fuel technology capability from these players.
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