Tata Power posted a marginal growth in net profit of Rs 1,076 crore for December quarter as compared to Rs 1,052 crore in the corresponding quarter of previous financial year. However, the profit was higher than analyst expectations. Praveer Sinha, managing director and chief executive tells Raghavendra Kamath about the company’s plans across different business segments. Excerpts:
There was marginal growth in profits in the December quarter. Do you expect it to improve in the coming quarters?
Earnings from the coal business has witnessed a significant reduction in Q3 due to reduction in coal prices. However, the same has been offset by the strong performance of our core businesses including transmission and distribution and renewables. We will continue to add significant RE (renewable energy) capacity to support the country’s energy transition. Solar EPC(engineering, procurement, and construction) , transmission and distribution will be our key growth engines in the days ahead and will further strengthen our bottomline in the coming quarters.
What is your business mix of regulated and unregulated areas? When you took over, it was 90:10. What is it now and what is your next target and by when?
All new business including transmission and renewables are unregulated as we are getting them through competitive bidding. We are moving towards 70:30 by next year. It will become 50:50 by 2028-29.
On distribution, you have had two spectacular successes — Delhi and Odisha. Reportedly, you are looking at many more states for such arrangement. Can you give some details?
Last year, the Union Government was trying to bring amendment to Electricity Act wherein states could have more than one supplier. But it didn’t go through. After the parliament elections, this is one of the reforms which could happen. When more states would go for multiple suppliers, we can have a significant play.
What is your mantra for success in such a difficult area, as power distribution where the T&D losses have been traditionally very high.
For us, better quality services such as GIS (geographical information system), new metering solutions and higher technology to our customers have worked. Technology in hardware and IT solutions will help in better services. We have implemented it in our rural operations also.
You are a market leader in EV charging business, having 50% market share. What are your expansion plans?
We have a market share of 80% in domestic chargers and 50% in fleet chargers. We will continue to have leadership and add more services. We provide services to all OEMs (original equipment manufacturers) including Tata Motors.
You have you put on hold divestment plans of some of your overseas hydropower projects. If so, why?
We want to divest. We have turned around the Zambian unit. The plan is to turn around the overseas units and make them profitable before looking at divesting them so that we get better valuations..
Moody’s has projected a decline in coal prices, down to the levels of 2021-22. This would mean limited utilisation of Tata Power’s Mundra ultra mega power plant. What’s your take on this?
Mundra plant is running at full capacity. All procurers want to buy from there. Mundra plant will be very competitive.
You are developing pumped hydro storage projects in Maharashtra. Are you in talks with other states also?
These are 2800 MW, Rs 15000 crore projects which are large investment projects. It is important to execute them and deliver before looking at other projects.We can produce 10 to 12 GW in other reservoirs in the state.