State-owned NHPC posted a 17% year on year (y-o-y) rise in net profit to Rs 974.7 crore for the June quarter as the country’s largest hydro power generator produced 22% more electricity in the quarter when there was a surge in power demand due to poll-related activities in the scorching summer. Revenue was up 11% y-o-y to Rs 2,754.5 crore.
Earnings before interest, taxes, depreciation and amortisation (Ebitda) in Q1 FY20 was Rs 1,628.9 crore, up 14% y-o-y, while Ebitda margin was 62.4%, recording an increase of 90 basis points. Of the FY20 target of Rs 3,800 crore, NHPC has already spent Rs 615 crore in capital expenditure till July 31, senior company officials told FE. The average tariff of NHPC (5,551 MW) currently, is Rs 3.34/unit.
Apart from higher sales, the company also gained from the latest hydro tariff regulation by the Central government which increased the ‘useful life’ of hydro generating stations from 35 years to 40 years, resulting in a reduction in depreciation expense by Rs 20.6 crore in the quarter. “The new policy also categorises hydro power as renewable energy, which would open the access to cheaper green financing from global institutions,” Balraj Joshi, managing director, NHPC, said.
The company is optimistic about resuming works at the 2,000 MW lower Subansiri hydro project after recent positive developments in the National Green Tribunal. “The project shall be commissioned within four years after the restart of the work and the levelised tariff by Rs 5.86/unit,” it said. The company is also expecting to sign an MoU with Himachal Pradesh for executing 449 MW Dugar hydro project in Chamba district, which would sell power at a levelised tariff of Rs 4.69/unit. All 2,339 MW hydro generation capacity of the company in Jammu & Kashmir are operating normally, NHPC officials clarified.