Power discoms post ₹2,701 crore profit in FY25 after years of losses

Power distribution utilities in the country collectively recorded a profit of ₹2,701 crore in FY25 after having incurred losses for several years, an official statement said on Sunday.

Distribution utilities as a whole have been reporting losses for past several years since unbundling and corporatization of State Electricity Boards.

The utilities collectively posted a loss of ₹25,553 crore in FY24 and a loss of ₹67,962 crore in FY14, the power ministry said in a statement.

Commenting on the profit in FY25, Power Minister Manohar Lal said this marks a new chapter for the distribution sector and is a result of several steps taken by the ministry to redress the concerns of the distribution sector.

 

India is driving not only its growth but also the growth of the world, with the energy sector playing a significant role in this," Lal said.

He said the government is committed to the required reforms in the sector so that the power sector can support India's growing economy and play its part in the journey towards Viksit Bharat.

The ministry said the result of reforms is evident not just in the PAT posted by distribution companies (discoms) after so many years, but also in other performance indicators.

The Aggregate Technical & Commercial (AT&C) losses have reduced over the years, signalling a transformation.

The AT&C losses have reduced from 22.62 per cent in FY 2013-14 to 15.04 per cent in FY 2024-25.

Further, signalling much improved cost recovery, the Average Cost of SupplyAverage Revenue Realized (ACSARR) gap has narrowed from Rs 0.78/kWh in FY14 to Rs 0.06/kWh in FY25.

Reforms such as the Electricity (Late Payment Surcharge) Rules have led to a 96 per cent reduction in outstanding dues to generating companiesfrom Rs 1,39,947 crore in 2022 to just Rs 4,927 crore by January 2026while bringing down distribution utility payment cycles from 178 days in FY 21 to 113 days in FY 25.

Some of the transformative initiatives in the distribution sector include Revamped Distribution Sector Scheme (RDSS): Enhancing financial viability through infrastructure modernization and accelerated smart metering.

In addition to the different policy initiatives, extensive engagements with states and UTs have emphasized reforms in the distribution sector.

These include discussions led by Power Minister Manohar Lal during the Regional Conferences of Energy Ministers of States/UTs in 2025 - Gangtok, Mumbai, Bengaluru, Chandigarh and Patna.