News Analysis

Solar, renewables drive revenues for Tata Power

Nithya Palani | Updated on February 15, 2018

Losses at Mundra plant drop as plant availability factor improves

A strong performance from Tata Power’s renewables portfolio, a higher plant availability factor aiding Mundra’s operational performance and an adverse tariff order and lower plant availability at Maithon dragging overall EBITDA, are the key highlights of the company’s December quarter performance.

Tata Power’s consolidated revenues increased by 5.7 per cent YoY to Rs 7,096 crore, led by a 10 per cent growth in standalone business and a 21 per cent and 25 per cent growth respectively in the solar and renewables portfolio. Maithon Power, one of the subsidiaries, however, saw revenues decline by 39 per cent YoY.

Consolidated EBITDA fell by 10 per cent YoY to Rs 1,355 crore in the latest December quarter, primarily due to an adverse regulatory order at Maithon. There was a negative impact of Rs 97 crore on account of the adverse tariff order and Rs 19 crore on account of lower plant availability due to the outage at Maithon that has dragged Tata Power’s overall operational performance down.

At the company’s Mundra plant, while under-recoveries increased due to an increase in coal prices, a higher plant availability factor came to its rescue. Fuel cost under-recovery increased to 79 paise/ unit in the December quarter, from 73 paise/unit in the same quarter last year. This was led by an increase in FoB price coal to $61/tonne from $52/tonne during this period. However, thanks to a higher plant availability factor — 79 per cent in the December quarter from 77 per cent during the same quarter last year — EBITDA increased by 139 per cent YoY to Rs 79 crore in the period under review. Adjusted loss declined to Rs 213 crore from Rs 244 crore in the same quarter last year.

The company’s focus on renewables is paying off. This portfolio (renewables consolidated), which includes Walwhan Renewables Energy, wind assets and Tata Power Renewable Energy (TPREL), clocked a healthy EBITDA of Rs 1,468 crore in the December quarter.

Power generation in Walwhan increased to 381 million units in the December quarter against 369 million units in the corresponding quarter last year. Tata Power’s Renewable’s capacity increased to 624 MW in the December quarter from 340 MW last year. Going ahead, the pace of reduction in losses at Mundra and the performance of the renewables portfolio will be keenly watched.

Published on February 15, 2018

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