Tata Power's net profit jumps 177 per cent for March-ended quarter

Our Bureau Mumbai | Updated on May 19, 2020 Published on May 19, 2020

Praveer Sinha, CEO & MD, Tata Power

Tata Power saw a 177 per cent hike in its net profit for the March-ended quarter on the back of proceeds accrued from the sale of Cennergi investment and reversal of MAT Credit due to transition to new tax regime in the renewables business.

In the March-ended quarter, Tata Power reported net profit of Rs 475 crore, in comparison to Rs 172 crore posted in the same period last year.

During the financial year, Tata Power sold off its investments in Cennergi, which was a joint venture in South Africa, which resulted in gains of Rs 533 crore.

Further, as a part of the transition to the new tax regime, Tata Power has deferred tax income of Rs 159 crore after adjusting for MAT credit. The Company’s PAT before Exceptional Items for the quarter was ₹366 crore as against Rs 323 crore.

EBITDA for the quarter was up 6 per cent at Rs 2,013 crore as compared to Rs1,901 crore in Q4FY19 mainly due lower losses in Mundra on account of lower price of coal.

For the financial year 2019-20, net profits came in at Rs 1,316 crore, almost 50 per cent down when compared to Rs 2,605 crore posted in fiscal 2018-19.

Praveer Sinha, CEO & MD, 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.”

Further, in its distribution business, Sinha said that it is witnessing a drop in demand by almost 30 per cent compared to 2019, as a result of Covid-19. “Though this impacts our topline, almost all 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,” he stated.

Consolidated revenue stood at Rs 6,881 crore in the fourth quarter of 2019-20 compared to Rs 7,597 crore in the corresponding quarter last year mainly due to delay in project execution in solar EPC (engineering procurement and construction) business on account of Covid-19, lower power demand and lower coal price", the company said.

Despite Rs 2,226 crore capex during the year, Net Debt reduced by Rs 1,300 crore with further improvement expected from sale of non-core assets and other initiatives. Debt Equity level is down to 2.0 and is expected to go down further, the company said.

Tata Power’s FY20 consolidated Profit After Tax before Exceptional Item stood at Rs 1,231 crore as against Rs 1,274 crore in previous year. Its FY20 EBITDA was up by 15 per cent at Rs 8,317 crore mainly due to lower losses in Mundra on account of lower price of coal, higher blending and better coal sourcing , capacity addition in renewables business and steady operational performance across all businesses, the company said.

For the year, its renewable business crossed 2,637 MW capacity mark. During the year, the company also added 318 MW.

Sinha also said that Tata Power is in advanced discussions to sell off another overseas asset. In addition, it said that good progress is being made on closing the sale of Defense business in this quarter. The divestment in Zambia hydro project is also expected to be completed by December. The company is confident of meeting their divestment target this year, said Sinha.

Published on May 19, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!


Support Quality Journalism
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.