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Despite margin pressures, power companies have averaged a 21 percent annual sales growth through the last three years, thanks to robust demand following the resumption of economic activities and heat waves sweeping large swathes of India.

While the topline for 24 power firms have increased to Rs 93,240 crore, the bottomline for the same set of firms during the fourth quarter of FY2022 jumped 32 percent on-year to Rs 15,593 crore, according to data from ACE Equities.

"We believe overall improvement in power companies was led by strong demand as well as better realisations. Going ahead, the demand is expected to remain robust and government initiatives towards renewable energy will also help drive growth," said  Ajit Mishra, VP- Research at Religare Broking Ltd.

Operating margins, however, took a hit despite increased demand, due to higher input costs, especially coal. Total cost for the quarter under review increased 20 percent on-year and 16 percent on-quarter. Operating margins in Q4FY22 stood at 43.8 percent, compared to 46.4 percent in Q4FY21 and 42.9 percent in Q4FY20.

NTPC net profit grew 14 percent YoY to Rs 5,167 crore for the March quarter. Revenue for the state-owned utility major rose 23 percent on-year to Rs 37,085 crore from Rs 30,103 crore in the year-ago quarter. NTPC added 3,152 mega watts (MW) of new capacity during the year thereby taking its total installed capacity 68,962 MW.

PowerGrid Corp reported 8 percent YoY growth in its consolidated net profit at Rs4,156.44. Total income grew 2.3 percent YoY to Rs 11,067.94 crore. For Tata Power, revenue grew 16 percent and net profit jumped 31 percent. JSW Energy recorded an eight-fold surge in net profit and a 64 percent leap in revenues.

Analysts believe that India's growing urban population, improvement in economic activities in the recent months after significant population received vaccines, and the need for clean and reliable power supply provide a huge scope for continued growth in power demand.

Also, the high prices of imported coal due to geopolitical uncertainties are expected to send power tariffs through the roof, which could increase dependency on green power sources, analysts expect.

"With power production reviving to the pre-pandemic levels, the need for green power is expected to pick up strongly, as thermal power capacity remains stagnant to control carbon emission," said Vinit Bolinjkar, Head of Research, Ventura Securities Ltd.

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Recovering from its record low, the rupee rose by 14 paise to 77.57 against the US dollar in early morning trade on Wednesday.

At the interbank foreign exchange, the rupee opened at 77.58 against the American dollar, then inched higher to quote at 77.57, registering a rise of 14 paise from the last close.

On Tuesday, the rupee declined by 17 paise to close at its all-time low of 77.71 against the US currency as surging US bond yields dampened the appeal of riskier assets.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.17 per cent higher at 101.92.

Global oil benchmark Brent crude futures rose 0.96 per cent to USD 122.84 per barrel.

"The Indian GDP came as expected at 4.1 per cent, while the fiscal deficit for 2021-22 was at 6.7 per cent of GDP against the budgeted 6.9 per cent indicating a robust tax collection," said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

Bhansali further said that the range for the rupee is still between 77.40 and 77.80 with oil companies and foreign portfolio investors (FPI) standing at one end and the Reserve Bank of India (RBI) at the other end.

On the domestic equity market front, the 30-share Sensex was trading 118.94 points or 0.21 per cent higher at 55,685.35, while the broader NSE Nifty advanced 30.45 points or 0.18 per cent to 16,615.00.

Foreign institutional investors remained net sellers in the capital market on Tuesday as they offloaded shares worth Rs 1,003.56 crore, as per stock exchange data.

On a year-on-year basis, GST collections in May were up 44 percent.

"The collection in the month of May, which pertains to the returns for April, the first month of the financial year, has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year," the finance ministry said in a statement.

"However, it is encouraging to see that even in the month of May 2022, the gross GST revenues have crossed the Rs 1.40 lakh crore mark," it added.

Of the total GST collections in May, Central GST was Rs 25,036 crore, State GST was Rs 32,001 crore, Integrated GST was Rs 73,345 crore, and compensation cess was Rs 10,502 crore.

In May, the government settled Rs 27,924 crore to Central GST and Rs 23,123 crore to State GST from Integrated GST. As a result, the total revenue for the month after settlement was Rs 52,960 crore for the Centre and Rs 55,124 crore for State GST.

The S&P Global India Manufacturing Purchasing Managers' Index (PMI) declined marginally in May to 54.6 from 54.7 a month back.

A reading above 50 indicates expansion in activity, while a sub-50 print is a sign of contraction.

According to S&P Global, the 11th consecutive 50+ print for the manufacturing PMI "pointed to a sustained recovery" and was "consistent with a solid improvement in operating conditions".

"Demand showed signs of resilience in May, improving further in spite of another uptick in selling prices. Companies reported a marked increase in total new orders that was broadly similar to April," S&P Global noted.

Within new orders, May saw international orders rise the most in 11 years

The continued rise in new orders helped increase manufacturing sector jobs in May. Although the rise in manufacturing employment was only slight, S&P Global said the rate of employment growth rose to the most since January 2020.

Holding back a more robust increase in employment was only mild pressure on manufacturers' capacities.

While the situation looked firm on the output side, price pressures continued to build on top of already elevated levels.

Manufactuerers' input prices rose again in May, although the rate of increase was lower than seen in April. However, this was the 22nd month in a row that costs had risen.

These cost burdens continued to be shared with consumers, with selling prices being raised by the most in over eight-and-a-half years - consistent with Consumer Price Index (CPI) inflation hitting a near-eight-year high of 7.79 percent in April.

"While firms appear to be focusing on the now, the survey's gauge of business optimism shows a sense of unease among manufacturers. The overall level of sentiment was the second-lowest seen for two years, with panellists generally expecting growth prospects to be harmed by acute price pressures," noted Pollyanna De Lima, economics associate director at S&P Global Market Intelligence.

India’s economy probably grew slower than previously estimated last year, with virus curbs in the final quarter seen as a drag on activity while the war in Europe has added a new inflation hurdle to recovery.

Data due Tuesday is likely to show gross domestic product in the year to March 2022 grew 8.7 per cent from a year ago, according to the median estimate in a Bloomberg survey. That’s slower than the 8.9 per cent expansion projected by the Statistics Ministry three months ago.

In the January-March quarter, the economy likely expanded 3.9 per cent, according to the survey, a performance that will mark the low point of the year.

The pace of growth eased amid the surge in omicron infections and temporary activity restrictions, said Rahul Bajoria, chief India economist for Barclays Plc. “While the movement restrictions were short-lived, other headwinds from global supply shortages and higher input costs also impeded the pace of expansion.”

Asia’s third largest economy had just begun recovering from the pandemic-induced slump when a surge in Omicron cases in January brought back some of the virus-related restrictions. The war in Ukraine, in February, further added to its woes, pushing up commodity prices and squeezing supplies further.

Earlier this month, elevated prices forced India’s central bank to hike rates by 40 basis-points in an off-cycle meeting. Governor Shaktikanta Das, who is due to next review monetary policy June 8, has signaled more hikes to tame inflation, a move that may hurt demand further.

“Elevated commodity prices, slowing global growth and monetary policy tightening across most markets are likely to weigh on growth prospects,” said Teresa John, an economist with Nirmal Bang Equities Pvt in Mumbai. “We continue to expect contact-intensive services to lead the economic recovery even as high commodity prices weigh on manufacturing margins.”

The central government’s fiscal deficit for FY22 has come in at 6.7 percent, undershooting the revised target by 20 basis points, data released on May 31 by the Controller General of Accounts showed.

As per the 2022 Budget, the fiscal deficit was revised to Rs 15.91 lakh crore. As such, the deficit, at Rs 15.87 lakh crore, is Rs 4,552 crore lower than the target.

As per the data released on May 31, March – the month for which data was awaited – saw the Centre post a fiscal deficit of Rs 2.70 lakh crore.

The National Statistical Office (NSO) will release the data for India's Gross Domestic Product (GDP) growth in Q4 FY22 and full financial year 2021-22 on Tuesday.

According to reports, Asia's third-largest economy is expected to accelerate in the January-March quarter from a year earlier.

GDP growth stood at 20.3 per cent in April-June quarter (Q1) of FY 2021-22 and 8.5 per cent in July-September quarter (Q2). During the third quarter of 2021-22, economic growth slowed to 5.4 per cent but was higher than China's GDP expansion of 4 per cent during the same period and the country retained its position as the world's fastest growing major economy.

As per the provisional estimates released in May 2021, the GDP had contracted by 7.3 per cent during 2020-21 on account of the outbreak of Covid-19 and subsequent nationwide lockdown to contain the pandemic. The NSO has also revised downward the real GDP growth number for 2019-20 to 3.7 per cent as against the earlier estimate of 4 per cent.

The growth in GDP during 2021-22 is estimated at 8.9 per cent as against a contraction of 6.6 per cent in 2020-21, according to Reuters.

According to the median estimate in a Bloomberg survey, India is likely to register GDP growth of 8.7 per cent in FY 2021-22.

Earlier in May, the Reserve Bank of India (RBI) raised the benchmark repo rate by 40 basis points in an unscheduled meeting.

The rupee's nearly 4 per cent depreciation against the dollar this year has also made imported items costlier, prompting the federal government to restrict wheat and sugar exports and cut fuel taxes, joining the RBI in the battle against inflation.

According to a Reuters report, supply shortages and higher input prices were weighing on output in the mining, construction and manufacturing sector, even as credit growth has picked up and states are spending more.

The consumer sentiment slid in early May, dipping for the second month in a row, as rising fuel prices and broader inflation hit household finances, according to a Refinitiv.

The unemployment rate for persons of 15 years and above in urban areas slipped to 8.7 per cent in October-December 2021 from 10.3 per cent in the year-ago quarter, showed a NSO survey.

RBI Governor Shaktikanta Das said last week that the central bank's primary focus was to bring inflation closer to its target but it could not disregard concerns around growth.

CII President TV Narendran said the Indian economy is expected to grow 7.5-8 per cent this fiscal year with exports playing a key role in the country's success story, however the country needs to remain prepared for any fallout of next wave of Covid-19 pandemic, and the impact of the ongoing Russia-Ukraine war.

Earlier, the World Bank and International Monetary Fund have slashed India's FY23 growth forecast to 8 per cent and 8.2 per cent, respectively.

Fuel prices remained unchanged on May 31 more than a week after the government announced an excise duty cut on petrol by a record Rs 8 per litre and on diesel by Rs 6 per litre on May 21.

The excise duty cut translated into a reduction of Rs 9.5 a litre for petrol in Delhi and Rs 7 a litre for diesel. Petrol in Delhi now costs Rs 96.72 a litre as against Rs 105.41 a litre before while diesel costs Rs 89.62 a litre as opposed to Rs 96.67 earlier.

In Mumbai, one litre of petrol costs Rs 111.35 and diesel Rs 97.28. In Chennai, petrol and diesel prices are Rs 102.63 and Rs 94.24 per litre respectively. In Kolkata, petrol is Rs 106.03 and diesel is Rs 92.76 per litre.

Oil marketing companies (OMCs) are passing on the excise duty cut to consumers despite losing Rs 13.08 a litre on petrol and Rs 24.09 per litre on diesel.

India meets 80 percent of its oil needs through imports.

Finance minister Nirmala Sitharaman on May 22 said the reduction in central taxes on petrol and diesel has been in road and infrastructure cess that is not shared with states, dismissing opposition's criticism that the move will impact states' share in central revenues.

Sitharaman has also announced that the government would provide a subsidy of Rs 200 per LPG cylinder to over nine crore beneficiaries of the Pradhan Mantri Ujjwala Yojana.

Also Read: Oil prices rise after EU bans most Russian oil imports

Oil prices rose in early Asian trade on May 31 after European Union leaders said they had agreed to cut 90 percent of oil imports from Russia by the end of this year.

Brent crude futures for July, which will expire on May 31, gained 63 cents to $122.30 a barrel at 0012 GMT.

United States West Texas Intermediate (WTI) crude futures were trading at $117.65 a barrel, up $2.58 from the May 27 close. There was no settlement on May 30 due to a US public holiday.

The ban on Russian oil is expected to tighten a global crude market which has already been facing supply constraints amid post-pandemic demand recovery.

The government is expecting a revenue loss of Rs 10,000 to 15,000 crore annually due to the recent recalibration in customs duty on iron and steel and plastic, an official said on Monday.

The government, with effect from May 22, waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry, a move which will lower the cost for the domestic industry and reduce the prices.

The duty on the import of raw materials used in the plastic industry has also been reduced to lower the cost of domestic manufacturing. Also, to increase domestic availability, the duty on exports of iron ore has been hiked up to 50 per cent, and a few steel intermediaries to 15 percent.

”The revenue loss on account of these customs duty rationalisation is expected to be around Rs 10,000-15,000 crore,” an official said. The customs duty changes in raw materials and intermediaries for iron and steel and plastic were aimed at reducing their prices and also lowering the cost of domestic manufacturing.