Tata Power consolidated operating profit, margins hit by Mundra losses

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October 29, 2021 2:15 AM

Higher cost of power purchased for the distribution business impacted Tata Power’s operating margins for the second quarter, leading to a drop of 700 basis points on year to 16.95%.

Mundra’s income from operations was down to Rs 219 crore in Q2FY22 against Rs 1,902 crore a year ago. Its operating profit was negative (-)Rs 533 crore against Rs 312 crore a year ago.Mundra’s income from operations was down to Rs 219 crore in Q2FY22 against Rs 1,902 crore a year ago. Its operating profit was negative (-)Rs 533 crore against Rs 312 crore a year ago.

Tata Power Company’s consolidated operating profit for the July-September quarter dropped 16.22% year-on-year (YoY) to Rs 1,663.64 crore, led by higher losses at the Mundra ultra-mega power project due to a rise in cost of imported coal.

Higher cost of coal impacted the Mundra project’s plant load factor (PLF) and availability, even as overall thermal PLF grew during the period. PLF and plant availability for Coastal Gujarat Power, which owns the Mundra project, dropped to 25% in Q2FY22, as against 79% a year ago, while the PLF for Tata Power’s other thermal plants rose to 76% compared to 65% a year ago.

Mundra’s income from operations was down to Rs 219 crore in Q2FY22 against Rs 1,902 crore a year ago. Its operating profit was negative (-)Rs 533 crore against Rs 312 crore a year ago.

Higher cost of power purchased for the distribution business impacted Tata Power’s operating margins for the second quarter, leading to a drop of 700 basis points on year to 16.95%.

However, total income for Q2FY22 rose 20.67% YoY to Rs 10,187.33 crore and net profit was up by 36.32% to Rs 506 crore, led by a strong performance from transmission & distribution, renewables, and the coal mining business in Indonesia. The net profit figures met Bloomberg estimates.

Revenue from transmission & distribution was up to Rs 6,787.41 crore against Rs 4,566.19 crore a year ago, while the renewables business reported a revenue of Rs 1,494.87 crore. However, revenue from the power generation segment for Q2FY22 was lower at Rs 2,216.86 crore as against Rs 3,484 crore a year ago.

The Rs 863 crore loss at Mundra in Q2FY22 was largely offset by the Rs 623 crore profit from coal companies in Indonesia and share of joint venture companies in Q2FY22. Profit from the coal companies alone stood at Rs 520 crore.

Praveer Sinha, CEO and MD of Tata Power, said the company’s focus remains on expansion of the renewables and transmission & distribution businesses and the go-green strategy in the generation business. The company is aligned with India’s National Electric Mobility Mission Plan 2020 and FAME II policy, which are focused on transforming the e-mobility space.

“The company has reached a significant milestone of deploying 1000 EV public charging points across 180 cities in India. Our target is to install EV charger points over a 3,600 km stretch from India’s northernmost region of Kashmir to Kanyakumari. We will also continue to strengthen our solar pumps, solar roof and solar microgrids businesses,” Sinha said.

Net debt as of September 30, 2021, rose to Rs 39,719 crore from Rs 39,649 crore a year ago. Net debt to equity too rose to 1.63 times from 1.53 times. The cash and cash equivalent on September 30, 2021, was Rs 1,873 crore as against Rs 4,076.25 crore a year ago.

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