The Naveen Jindal promoted JSPL is looking to sign long-term power purchase agreements with State Electricity Distribution Utilities (Discoms). This is after lower power sales dragged the company's consolidated net profit down by 14 per cent in the third quarter of 2012-13.
According to the company, the average tariff in the third quarter of 2012-13 hovered around Rs 3 a unit compared to Rs 4 for every unit in the same quarter in the previous year.
"The company has bid for the Rajasthan and Uttar Pradesh Discoms' bids for long-term PPAs," said Sushil Maroo, Director and Group CFO of JSPL.
Currently, the company sells electricity on a merchant basis.
JSPL on Tuesday reported that its consolidated net profit during October-December 2012 was down 14 per cent at Rs 869.94 crore (Rs 10,15.88 crore).
Lower revenue generation from the power business has dragged down consolidated profits, said Maroo.
Consolidated net sales increased by 10 per cent to Rs 4,801.63 crore (Rs 4,357.69 crore) in the three months ended December 31.
JSPL's production of steel products (slabs, round, bloom and beam blank) increased marginally by 2 per cent at 775,416 MT in the third quarter of 2012-13 against 756,662 in the same period during the previous year.
Jindal Power Ltd, a subsidiary of JSPL, reported a net profit of Rs 255.75 crore (Rs 481.14 crore) and net sales of Rs 557.55 crore (Rs 799.64 crore). The private power producer reported an average plant load factor of 81.05 per cent (100 per cent) during October-December 2012.
The reason for the dip in profits from the power business has been attributed to lower generation due to transmission difficulties and the dip in average electricity tariffs.
Jindal Power has operational thermal power projects of 1000 MW. The company is implementing a 2400 MW porject with four units of 600 MW each. The first unit is expected to be commissioned in June 2013 and the second by December 2013. The project is worth Rs 13,410 crore.
JSPL is also looking to sign a mining lease for the Utkal coal block on Odisha shortly. "We can open the mine after six to nine months of signing the mining lease," added Maroo.