JSW Energy's September quarter pre-tax profit up 17% to Rs 483 crore

Firm says it is unlikely to opt for new corporation tax rates, expects benefit from MAT credit for the full year to be Rs 40-42 cr

Sajjan Jindal-promoted JSW Energy reported a 17 per cent rise in profit before tax for the September ended quarter on the back of improved performance. While overall power demand declined 1.6 per cent in the quarter, the company is hopeful of a demand revival.

For the quarter under review, JSW Energy reported a profit before tax (PBT) of Rs 483.49 crore, 17 per cent higher from Rs 414.54 crore reported in the same quarter a year ago. These numbers do not include tax expenses and those adjustable in future tariffs.

The company has not elected for a change in its corporate tax structure so far. “We have time until March to elect one option. Given, the nature of our business we are unlikely to switch to the new rates, but we have not yet decided,” said Jyoti Kumar Agarwal, director-finance for JSW Energy. In terms of benefit arising out of minimum alternate tax (MAT) credit, the company said the overall gain for the full year would be Rs 40-42 crore. “Roughly half of this would be passed on to consumers through tariff, taking our net gain to Rs 20-odd crore for full year,” Agarwal added.

For the September 2019 ended quarter, JSW Energy’s net profit was at Rs 353 crore, 12 per cent higher from a year ago. Its revenue declined 13 per cent owing to a dip a fuel costs which is passed on for power capacities that are tied up. The company’s earnings before interest, taxation, depreciation and ammortisation or Ebitda was higher by 5 per cent at Rs 1,048 crore.

Commenting on the overall power demand in the first half of the current financial year, Prashant Jain, joint managing director and chief executive officer (CEO) said, “India’s power demand growth declined 1.6 per cent against 7.4 per cent in the June quarter, plant load factor for thermal power was at an all-time low.” He added, “Demand in October may have seen a contraction, but was better than September.”

Jain expects power to see a five per cent rise in demand for the full financial year.

The company is in the process of acquiring Ind-Bharath Energy (Utkal) through the National Company Law Tribunal (NCLT) route. It is expected to pay Rs 1,000 crore to lenders upfront, who have an exposure of Rs 4,000 crore to the project. JSW Energy also looks to finalise its deal to acquire GMR’s Kamalanga Energy in the current financial year.

JSW Energy has also started work on its Kutehr hydro project, which is expected to be complete within 54 months. The power producer has a letter of intent from Haryana state to procure power from this project. The total project cost for the hydro plant stands at Rs 2,700 crore.