In a break from the past many quarters of subdued growth or worse still, a decline, NTPC posted 12 per cent jump in revenue to ₹19,063 crore in the June 2016 quarter. This was due to a sharp spike in the company’s power generation and sales volume during the quarter.

“State utilities have started buying power and that is why there is a quantum jump in power generation,” says K Biswal, Director Finance, NTPC. The company sold around 60 billion units of power in the latest quarter, nearly 11 per cent more than in the year-ago period.

In fact, the rise in revenue came about despite lower tariff. NTPC’s average tariff for the June 2016 quarter was at ₹3.12 a unit as against ₹3.26 in the same period last year. Stricter production-linked incentives under the Central Electricity Regulatory Commission’s (CERC) tariff regulations (2014-19) along with lower fuel cost impacted the company’s tariff during the latest quarter.

Greater use of domestic coal, instead of imported coal, and cost rationalisation measures such as sourcing coal from the nearest mines helped the company keep its fuel costs on a leash. This control over costs was achieved despite the hike in prices by Coal India in May and the doubling by the government of the Clean Environment Cess on coal to ₹400 a tonne in February. The higher revenue helped the company post 48 per cent (year-on-year) jump in operating profit to ₹5,211 crore in the June 2016 quarter. This has been the sharpest growth in operating profit in at least the past eight successive quarters. Impacted by higher tax expense, net profit rose 4 per cent (year-on-year) to ₹2,370 crore during the quarter. This, however, marks a substantial improvement over the preceding two quarters of sharp fall in net profit.

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