Tata Power in red on forex loss

It posted a consolidated profit of Rs 146 cr in the corresponding quarter last year

Tata Power’s stock touched a 52-week low intra-day trade on Tuesday as it slipped 18.5 per cent after the company posted a first quarter loss of Rs 114.7 crore. The stock closed at Rs 71.3 on Tuesday. The company had posted a consolidated profit of Rs 146 crore in the corresponding quarter of FY13.

The loss this time is mainly due to higher forex loss, at Rs 292.7 crore, on realignment of liabilities due to weakening of the rupee, and higher finance cost related to its Mundra ultra mega power project. The imported coal-based power project had been unable to pass on increased fuel costs to buyers, leading the company to losses in spite of increase in revenues.

The power producer’s revenues rose 29 per cent to Rs 9,339.5 crore, compared to Rs 7,253.8 crore in the corresponding quarter last year. Anil Sardana, managing director, said the revenue growth was on account of robust performance of its businesses and subsidiaries.

Compared to last year, the company’s generating capacity increased this quarter as it commissioned more units in Mundra and Maithon power plants. It said higher volumes were traded by Tata Power Trading Company. Sales for the quarter stood at 4,136 million units and the overall generation at standalone basis was 3,897 million units.

The government however is working on offering a solution to Mundra’s fuel worries. “On the Mundra UMPP front, Central Electricity Regulatory Committee (CERC) has notified CGPL (Mundra) of its decision for a compensatory tariff to be paid till the fuel situation stabilises. A Committee has been formed to evaluate the same,” said Sardana. ‘

Sardana also said that this decision of the CERC is an important step in resolving the major impasse affecting imported coal based power projects. “Meanwhile, CGPL is honouring its commitment and hopes for quicker resolution of the issues as the pain is making it tougher to operate,” he said.

The company is also working on its growth plans. It signed a distribution franchise agreement with state electricity board of Jamshedpur. This is apart from its plans to grow capabilities internationally. “We continue to expand our international presence by entering new markets like Vietnam with 1,200 megawatts long Phu thermal power project and Europe with Hydro project in Georgia. We are also happy to expand our solar portfolio through 28.8 v in the Satara district in Maharashtra and continue to be a lead performer in solar power generation in India,” said Sardana.