Mumbai: India’s largest private sector power utility Tata Power Co. Ltd on Thursday reported a 28% year-on-year decline in second quarter profit to Rs182 crore, below market estimates though analysts acknowledged its improved operating margin.
Improved margins: The Tata Power plant near Mumbai.The firm’s revenue fell 12.13% to Rs1,721.09 crore. Santosh Verma / Bloomberg
The company said interest charges increased to Rs219.47 crore in the three months to 30 September from Rs120.25 crore a year ago and depreciation rose 54% to Rs230.20 crore due to higher capitalization.
Revenue declined 12.13% to Rs1,721.09 crore. Operating margins, however, rose sharply to 24% from 13.5% a year ago on lower fuel costs.
“If you look at the absolute numbers, it is certainly below expectations, but the key thing is that margins have actually improved,” said an analyst tracking the firm. “Volumes have gone up while realizations have come down.” The analyst requested anonymity.
The median estimate of 14 analysts surveyed by Bloomberg was a quarterly profit of Rs240 crore.
In the second quarter, the company added new power plants with a combined generation capacity of 190MW, including one at Haldia, West Bengal, taking its current installed capacity to 2,975MW.
Tata Power plans to add 318MW of power generation capacity in 2010, 1,138MW in 2011, 1,600MW in 2012 and 2,400MW in 2013, which will transform it from a distribution entity to a company with a presence in key segments of the power sector chain.
In an earlier statement, Tata Power said its year-earlier quarter had benefited from a foreign exchange gain of Rs76.70 crore, against Rs3.09 crore in the latest period.
Its remaining other income is lower at Rs72.42 crore against Rs111.73 crore earlier, primarily on account of dividend received from one of its subsidiaries in the year-ago second quarter.
Tata Power shares gained Rs6.75, or 0.48%, to end at Rs1,404.70 on the Bombay Stock Exchange on Thursday, while the bellwether Sensex index lost 230.77 points, shedding 1.42%, to 16,052.72.