Debt-laden Lanco Infratech on Thursday posted a net profit of R136.5 crore during October-December, primarily on the back of settled operational performance of its coal-based power plants in Uttar Pradesh and Chhattisgarh.
However, non-availability of natural gas for its gas-based plants in Andhra Pradesh and restricted cash flow remain a drag for the company. It had reported a loss of R592.30 crore for the corresponding quarter a year ago. For quarter ended December 31, the company’s total sales jumped to R1,726.2 crore, an increase of 15% compared to a year-ago period.
Lanco’s power business recorded a 30% jump in its revenue and 70% increase in its earning before income, tax, depreciation and amortization during the third quarter.
Despite winning imported RLNG in the government-conducted auction for its gas-based plants at Kondapalli, Lanco has not been able to use the gas to run its 1,100 MW at 50% plant load factor as Gujarat and Andhra Pradesh insist on levying value added tax (VAT) of 14%, making generation unviable.
“The government has issued an executive order explaining that only central sales tax can be levied on the movement of gas from west to east. Maharasthra has already agreed to not levy VAT and we hope that the other two states would follow suit,” T Adibabu, chief operating officer, Lanco Infratech, told FE.
He added that in absence of gas from the west, the company has only been able to run 200 MW of its capacity from gas procured within the state.