Home >Companies >News >Ongoing lockdown is affecting revenue across all businesses: Tata Power

Strong capacity addition in its renewables division and putting a lid on losses at the Mundra thermal power plant led Tata Power to report consolidated net profit of 475 crore in January-March 2020 quarter, up 177% from the 172 crore reported in the same period last year.

The company’s operating income (EBITDA, earnings before interest, tax, depreciation, amortisation) for the quarter was up 6% at 2,013 crore as compared to 1,901 crore in Q4FY19. The company added 318 MW of renewable capacity in FY20, with total capacity now at 2637MW, and ended the fiscal with a solar EPC (engineering procurement construction) order book of 7000 crore.

The board recommended a dividend of 1.55 per share. At its meeting, the company approved raising 1500 crore through the non-convertible debentures through private placement.

The full year’s profit stood at 1,231 crore as against 1,274 crore in previous year. EBITDA for the full year was up by 15% at 8,317 crore mainly due to lower losses in Mundra on account of lower procurement price of coal, higher blending and better coal sourcing.

Praveer Sinha, CEO & MD, Tata Power, said in a statement: “All our businesses and operations have performed exceptionally well. Our robust performance is supported by excellent performance of renewable business & capacity addition.

“Globally, India is following one of the most stringent lockdowns with all economic activities coming to a halt for nearly two months now. We are witnessing a drop in demand by almost 30% compared to 2019 in our distribution businesses. Though this impacts our topline, almost all Tata Power’s assets are under either regulated businesses or through fixed price long term contracts on take or pay basis. Thus in our business the return profile covers our fixed costs and provides us assured returns," Sinha added

The company added that its divestment plans remain on track with a closure of the Cennergi transaction earlier in April with 842 crore realised from this sale including hedging gains. The company is in advanced discussions to execute sale agreement for another overseas asset. In addition, they is good progress on closing the sale of defense business in this quarter. The divestment in Zambia hydro project is also expected to be completed by December. The company is confident of meeting their divestment target this year. The restructuring of renewable businesses including setting up the vehicle for their growth is well on track to closure.

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