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Tata Power FY20 profit plunges 49.5% to Rs 1,316 crore; to raise Rs 1,500 crore via NCDs

Tata Power reported a two-fold jump in its consolidated net profit to Rs 475 crore compared to Rs 172 crore in the same quarter last year

Chitranjan Kumar   New Delhi     Last Updated: May 20, 2020  | 14:35 IST
Tata Power FY20 profit plunges 49.5% to Rs 1,316 crore; to raise Rs 1,500 crore via NCDs
Tata Power's board has recommended a dividend of Rs 1.55 per equity share of Rs 1 each for FY20

Tata Power company, a part of the Tata Group, has reported 49.5 per cent decline in its consolidated net profit at Rs 1,316 crore for the full financial year ended March 31, 2020, as compared to Rs 2,606 crore in the previous fiscal.

Consolidated operating income of the Mumbai-based electric utility company fell by 3.45 per cent to Rs 28,948 crore as compared to Rs 29,984 crore in FY19, Tata Power company said in a filing to the Bombay Stock Exchange.

EBITDA (Earnings before Interest, Taxes, Depreciation and Amortisation) increased to Rs 8,317 crore from Rs 7,235 crore in the previous fiscal.

For the fourth quarter ended March 31, 2020 (Q4 FY20), Tata Power reported a two-fold jump in its consolidated net profit to Rs 475 crore compared to Rs 172 crore in the same quarter last year. The profit surged due to gain on sale of Cennergi investment offset by impairment provision in SED and reversal of MAT Credit due to transition to new tax regime in the renewables business, the company said.

Consolidated revenue declined to Rs 6,881 crore compared with Rs 7,597 crore in the corresponding quarter last year, impacted by delay in project execution in solar EPC (engineering procurement and construction) business due to COVID-19 pandemic, lower power demand and coal price.

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EBITDA for the quarter was up 6 per cent at Rs 2,013 crore as compared to Rs 1 ,901 crore in Q4 FY19, mainly due lower losses in Mundra on account of lower free on board (FOB) price of coal.

Commenting on company's performance, Praveer Sinha, chief executive and managing director, Tata Power said, "All our businesses and operations have performed exceptionally well. Our robust performance is supported by excellent performance of renewable business & capacity addition."

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On COVID-19, Sinha said that India is in a war-like situation in its fight against coronavirus. "Globally, India is following one of the most stringent lockdowns with all economic activities coming to a halt for nearly two months now. We are witnessing a drop in demand by almost 30 per cent compared to 2019 in our distribution businesses. Though this impacts our top line, almost all of Tata Power's assets are under either regulated businesses or through fixed price long term contracts on take or pay basis. Thus in our business the return profile covers our fixed costs and provides us assured returns."

Tata Power's board has recommended a dividend of Rs 1.55 per equity share of Rs 1 each (155%) to the shareholders for the year ended March 31, 2020.

In a separate development, the company said that board has approved plan to raise fund up to Rs 1,500 crore or its equivalent in one or more currencies on private placement basis from domestic / off-shore markets. The fund will be raised by issuance of redeemable, taxable, listed, rated securities in the form of Non-Convertible Debentures (NCDs) in one or more tranches.

Boosted by strong Q4 earnings, shares of Tata Power were trading 3.86 per cent higher at Rs 33.60 apiece on the BSE against the previous close price of Rs 32.35. The stock hit an intra-day high of Rs 34.60 after opening higher at Rs 34.

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