Lower merchant power rates and higher coal prices would ensure sustained pressure on profitability of non-integrated companies. The performance of Indian companies with large exposure to merchant power sales could remain under pressure, with a likely decline in earnings as a result of lower merchant power tariffs and rising coal prices. This especially holds true for non-integrated players. Thermal coalâ€”a key input for power generationâ€”has become costly in the global markets in the recent months. Additionally, Indiaâ€™s largest coal producer, Coal India, also increased the price of coal by 30 per cent for non-regulated (spot sales) power generation companies. Industry estimates suggest that demand from China and India could drive coal prices towards $150 a tonne. Given the nuclear crisis in Japan, preference towards coal-based power plants would put further pressure on prices.