Tata Power net profit drops 30% to Rs 661.5 crore

Tata Power, the country's largest private thermal power producer, on Thursday reported a drop in its fourth quarter net profit by 30 per cent to Rs 661.5 crore, compared to Rs 942.7 crore in the same quarter last year.

“The decline is primarily due to lower forex gains of Rs 61 crore from Coastal Gujarat Power, compared to Rs 358 crore last year and a reversal of the deferred tax provision of Rs 83 crore in North Delhi Power last year, as a recoverable from future tariff,” said S Ramakrishnan, executive director-finance.. Its revenues increased by four per cent to Rs 4,985 crore, compared to Rs 4,789 crore in the year-ago period.

Even though coal prices went up 25 per cent last year, it did not affect Tata Power. “Some of the impact has already come in, but the full impact will come in the next quarter when the contracts are up for renewal,” he said.

Tata Power has already received permission from the government to pass on 45 per cent of coal price increase in Mundra Ultra Mega Power Project (UMPP) to its consumers. This is part of the bid conditions and the increase in coal prices has been calculated from the time the bid took place in November 2006.  

The company, which has 30 per cent stake in two coal mines of Bumi Resources in Indonesia said it will gain from the coal price increase. The business contributes 40 per cent to the company’s profit before tax.

The company said it would spend between Rs 6,000-7,000 crore as capital expenditure in 2011-12. A major chunk of the investment would go into capacity addition of the Mundra UMPP and Maithon in Jharkhand.

It currently has a capacity of 3,127 Mw, and will add 2,800 Mw this year. While 200 Mw will be from renewable sources, the rest will be coal-based. The first 800 Mw unit of Mundra UMPP will be commissioned in September, and the first 525 Mw unit of Maithon will be commissioned next year.

The number of consumers for the company’s Mumbai distribution licence area have crossed 150,000 lakh this year. Tata Power will spend Rs 1,000 crore on network enhancements and hydro power projects for this business. The company also announced a stock split where the face value of the share will become Re 1 per share from Rs 10 currently.