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

Our Bureau Mumbai | Updated 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

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