Shares of Tata Power, one of India’s largest integrated power companies, gained nearly 5 per cent on Thursday on a four-fold increase in net profit for the first quarter (Q1) ended June 30.
The power major recorded a consolidated net profit of ₹1,735 crore during the quarter against ₹406 crore in the corresponding period last year due to an exceptional gain of ₹1,897 crore as it realised its investments in Tata Communications and Panatone Finvest .
The company’s consolidated revenue for the quarter has grown by 16 per cent to ₹7,139 crore as compared to ₹6,166 crore in the corresponding period last year on account of higher generation at its thermal power plants as well as its renewable energy assets.
Key growth areas
“Renewable continues to be the higher contributor to the profitability of the company,” Praveer Sinha, CEO & Managing Director of Tata Power said. He added that in Q1, Tata Power restructured its business in order to focus on key growth areas such as renewable generation, transmission, distribution and new and value-added businesses that include rooftop solar, smart metering, development of micro grids in rural areas and setting up of electric vehicle charging stations.
“While the traditional business of thermal and hydro continues to perform well, we believe our future growth areas will bring in greater value and help us align with the consumer needs,” Sinha said.
Earlier in June, Sinha told BusinessLine Tata Power aimed to expand its renewable portfolio over three times, from current 2,272 MW to around 7,500 MW in next 5-6 years, both through organic route as well as through possible acquisitions.
Legacy impact
The company’s profit for the quarter was impacted by performance of coal companies due to change in Indonesian regulations and higher mining costs, change in accounting standards as well as forex losses at its imported-coal based Mundra power plant.
“At present, we are working with the High Powered Committee (HPC) to resolve the Mundra issue and we hope that the resolution will benefit all stakeholders,” Sinha said.
The HPC, consisting of former Supreme Court judge RK Agrawal, former RBI Deputy Governor SS Mundra and former Chairman of Central Electricity Regulatory Commission Pramod Deo, was formed by the Gujarat government earlier this month to resolve stranded coastal projects of Tata Power, Adani Power and Essar Power.