Analysts back power sector lenders

Power sector financiers, Power Finance Corporation (PFC) and REC, are likely to benefit from the Union government's new scheme to improve operational efficiencies and financial sustainability of all discoms and power departments, say analysts. PFC and REC are the nodal agencies of the scheme for 19 and 16 states and UTS, respectively. Moreover, with both peak and daily energy demand at all-time highs, the timing of the reform approval is likely to revive capex in both generation and distribution. Analysts said the improvement in the health of state discoms would structurally benefit the two key lenders.