In tune with the recent quarterly trends, power producers reported muted performance in the December quarter. Core earnings excluding non-recurring revenues remained subdued. NTPC Ltd, the country’s largest power generator, reported a 4% decline in profit despite a 7% increase in sales. The performance was hit by the under-recovery of fixed costs due to unavailability of coal at certain power plants.

Private sector power generator Tata Power Co. Ltd did no better. Reported profit dropped from the year-ago quarter due to an adjustment related to Maithon plant. Losses at Adani Power Ltd widened due to fuel shortages and under-utilization of power plants. JSW Energy Ltd, due to its higher exposure to short-term power markets, was expected to benefit from higher spot energy tariffs. But the company also belied Street expectations as high fuel costs hurt operating profit. Even CESC Ltd’s performance trailed estimates, with reported profit after tax growing just 1%.

Hydro power producer NHPC Ltd tripled its net profit. But that provided no cheer as the company indicated that the commissioning of one power plant (Parbati II) may be delayed, postponing prospective earnings. Also, much of the incremental profit of the companies was driven by dividend and incentive income.

Overall, the performances remained unexciting. But for investors looking for silver linings or stock-specific cues, this quarter does offer some.

One set of reasons emanates from management commentary. NTPC’s management says it has seen noticeable improvement in power demand in recent months. The JSW Energy management said the reduction in thermal power capacities (due to retirement of old plants and other reasons), the slowdown in renewable energy capacity additions and steady growth in demand will aid existing power producers, resulting in new power purchase agreements (PPAs) and better sales. “That makes us more and more confident on the green shoots seen in demand and slowing capacity additions; more and more PPAs are going to take place in times to come," Prashant Jain, joint managing director and chief executive officer of JSW Energy, told analysts.

The second set of silver linings emanate from company-specific developments. To pare debt and restructure, Tata Power classified more unrelated investments for sale, though some believe the company is slow in selling assets. Adani Power is looking to sign domestic fuel-supply agreements for two of its power plants, reducing its dependence on imported coal. Apart from organic expansion, NTPC is looking to acquire stressed assets. CESC, on the other hand, is inching closer to demerger and final approvals are expected by the end of this quarter.

These factors can help reduce company-specific risks and improve their earnings performances.