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Lower losses from Mundra facility help Tata Power post 12% higher profit after tax

Tata Power's standalone PAT for Q3 FY20 was only Rs 7 crore, as compared to Rs 271 crore in corresponding quarter last year, which was mainly due to a deferred tax benefit of Rs 272 crore on power purchase agreement extension in Mumbai licensed area

twitter-logo PB Jayakumar        Last Updated: January 29, 2020  | 22:33 IST
Lower losses from Mundra facility help Tata Power post 12% higher profit after tax

Lower fuel under-recovery from the Mundra ultra mega power project (UMPP) and better operational performance across all businesses helped Tata Power Company post a consolidated profit after tax (PAT) of Rs 246 crore for the third quarter of financial year 2019-20, 12 per cent higher than the Rs 220 crore net profit in the corresponding quarter of previous year. However, consolidated revenue for the quarter under review stood at Rs 7,171 crore, down by 9 per cent from Rs 7,911 crore in the same quarter of the previous year.

Tata Power's standalone PAT for Q3 FY20 was only Rs 7 crore, as compared to Rs 271 crore in corresponding quarter last year, which was mainly due to a deferred tax benefit of Rs 272 crore on power purchase agreement (PPA) extension in Mumbai licensed area. Consolidated EBDITA was up 8 per cent at Rs 1,970 crore (excluding one-off item in Q3 FY19, EBITDA grew by 27 per cent) as compared to Rs 1,820 crore in Q3 FY19. For the first three quarters of FY20, consolidated EBITDA stood at Rs 6,313 crore, up by 18 per cent over previous year, mainly driven by lower losses in Mundra, capacity addition in renewables and better operational performance across all the businesses. Renewables business continued to grow with EBITDA increasing from Rs 436 crore in Q3 FY19 to Rs 515 crore despite lower solar plant load factor (PLF) due to extended monsoon, said Tata Power.

Tata Power, the largest integrated power utility, generates 12,783 MW of power, of which 8,860 MW is thermal.

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Tata Power sources said EBITDA of Coastal Gujarat Power Limited (CGPL-Mundra) continued to improve to Rs 260 crore in Q3 FY20, from a loss of Rs 120 crore in previous year, on the back of lower coal prices. Tata POwer's fuel under-recovery in the three quarters has almost halved with lower coal prices and benefit from higher coal blending. Correspondingly, its own coal companies' profits were lower due to lower coal prices. Integrated losses have reduced significantly from Rs 276 crore in Q3 FY19 to Rs 43 crore during December quarter this fiscal. After Indonesia changed its coal selling policy in 2012 to use global prices as a benchmark, Tata Power's subsidiary Mundra ultra mega power project has been making losses up to Rs 1,100 crore every year.

"All our operations have performed well. We have reported a strong growth trajectory in renewable business and other consumer centric businesses," said Praveer Sinha, CEO and Managing Director.

Tata Power now has a solar EPC order book of Rs 7,700 crore. It has collaborated with the Rockefeller Foundation to set up 10,000 micro-grids in India by 2026 to provide affordable electricity for millions of rural homes and enterprises. Tata Power's new consumer-centric businesses, including rooftop solar projects for residential consumers, have reached 60 cities with 100 EV charging points across 4 cities, said the company.

The company repaid loans worth Rs 857 crore in the last quarter, and Rs 2,257 crore since March 2019. At the end of December quarter this fiscal, Tata Power has a total debt of Rs 47,552 crore, which was Rs 46,891 crore a year ago.

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