Tata Power's Q3 profit slides 88% on coal inventory losses

The country's largest integrated power company, Tata Power, saw its consolidated net profit plunge a whopping 87.6 per cent to Rs 24.46 crore in the three months to December, hit by an exceptional loss of Rs 187.15 crore from falling global coal prices.
The corresponding figure in the year-ago period stood at Rs 197.74 crore.
"Net profit before exceptional items stood at Rs 212 crore (Rs 24 crore after exceptional items) compared to Rs 198 crore in the third quarter of 2014-15. Exceptional items include adjustments of Rs 187 crore for assets impairment and goodwill due to falling international coal prices," Tata Power said while announcing its latest quarterly results.

In terms of installed power generation capacity, Tata Power is the second-largest private electricity generator after Adani Power at 10,440 MW. Tata Power and its subsidiaries have an installed gross generation capacity of 9,036 MW.
Consolidated income increased to Rs 9,329.27 crore, from Rs 8,528.40 crore a year earlier. Income from the core power business declined to Rs 6,450 crore from Rs 6,600 crore, driven down mostly by lower international coal prices.
"Revenue from coal business declined to Rs 1,922 crore from Rs 2,104 crore due to lower price realisation from coal companies. However, profit from this business stood at Rs 237 crore," the statement said.

"Exceptional items (net) of Rs 187.15 crore during the quarter and nine months ending December comprise impairment of goodwill in Indonesian companies of Rs 2,507.15 crore... And reversal of impairment loss in Coastal Gujarat Power of Rs 2,320 crore," it added.

Further, the company said "profit from operations (after adjustment for regulatory income) rose 29 per cent at Rs 1,253 crore mainly because of all-round strong operational performance and strong asset management".
MD and Chief Executive Anil Sardana said, "Despite a tough market environment, we could improve profitability and maintain strong operational performance across our business verticals during the reporting quarter."

Tata Power is present in all the segments of the power sector -- generation, transmission, distribution and trading.