December quarter: Tata Power net falls 7 per cent, margins shrink 350 bps

Total expenses increase 9 per cent to Rs 7,183.84 crore for the quarter.

By: ENS Economic Bureau | Mumbai | Published: February 15, 2018 3:11:33 am
Tata Power net falls 7%, margins shrink 350 bps Total expenses, including fuel cost, power purchase cost and transmission charges, was up 9 per cent to Rs 7,183.84 crore.

Tata Power Company Ltd, which is grappling with business challenges in the power sector, saw its consolidated operating margins drop by 350 basis points to 17.39 per cent for the December 2017quarter as expenses rose.

Total expenses, including fuel cost, power purchase cost and transmission charges, was up 9 per cent to Rs 7,183.84 crore, while the earnings before interest, tax, depreciation and amortisation was lower by 12 per cent year-on-year to Rs 1,208 crore.

Fuel cost for the period was higher at Rs 2,491.24 crore, against Rs 2,284.6 crore a year ago, as was the cost of power purchased at Rs 2,070.91 crore, compared with Rs 1,696.74 crore. Transmission charges rose to Rs 70.25 crore from Rs 55.82 crore a year ago.

Despite taking credit of a tax reversal of Rs 319.86 crore in the quarter, the net profit dipped 7.17 per cent to Rs 649 crore. The profit before tax was at Rs 9 crore, compared with Rs 246.28 crore a year ago, as the company bore an impact of Rs 142 crore on rate-regulated activities.

The segment revenue, that includes the power business — generation, transmission, distribution and trading of power and related activities – and other businesses was up around 9 per cent to Rs 7,531 crore. The segment profit, however, fell 21 per cent to Rs 885 crore.

With regards to recovery of losses from 4,000 MW Mundra UMPP in Gujarat, the company said, the lenders and the management of Coastal Gujarat Power are in discussions with the buyers of power to arrive at alternative solutions to minimise operating losses including the offer for sale of 51 per cent shareholding in CGPL at a nominal value to procurers subject to grant of compensatory tariff. FE

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