Tata Power announced its earnings for the quarter ended September 30, 2020 (Q2) of the financial year 2020-2021, and posted a net profit of ₹3.71 billion (~$49.8 million), a 10% increase from ₹3.39 billion (~$45.5 million) in the same period last year.
In the first half (H1) FY21, the consolidated profit after tax (PAT) stood at ₹6.39 billion (~$85.9 million), up by 10% compared to ₹5.82 billion (~$78.2 million) in the same period last year. Meanwhile, consolidated revenue was up by 1% at ₹150 billion (~$2.02 billion) compared to ₹148 billion (~$2 billion) in the 1H of FY20.
During the quarter, the company’s earnings before interest, tax, depreciation, and amortization (EBITDA) stood at ₹22.76 billion (~$306 million), up by 7% from ₹21.24 billion (~$285 million) in the same period last year.
Tata Power’s consolidated revenue stood at ₹84.13 billion (~$1.13 billion), up by 15% from ₹73.29 billion (~$985 million) in the same period last year. The company attributed the revenue growth to its 51% acquisition of TP Central Odisha Distribution Limited (TPCODL) and higher solar engineering, procurement, and construction (EPC) revenue.
The company’s standalone revenue for the quarter stood at ₹16.54 billion (~$222 million) against ₹18.13 billion (~$243 million) in the corresponding quarter last year due to lower power demand, fuel cost, and power purchase cost.
Meanwhile, PAT stood at ₹1.45 billion (~$19.5 million) compared to ₹1.55 billion (~$20.8 million) in the corresponding period last year.
During, Q2 the board of directors had approved the transfer of 348.50 MW of renewable assets (forming part of the renewable segment) to its wholly-owned subsidiaries on a slump sale basis. The sale will be recognized post-execution of the sale agreement and transfer of control of renewable assets to the wholly-owned subsidiaries.
Consolidated renewables revenue for Q2 was ₹11.05 billion (~$148 million) higher than the previous quarter, which stood at ₹8.49 billion (~$114 million). However, Q2 2021 saw a slump compared to the same period last year, which recorded ₹11.65 billion (~$156 million).
Consolidated renewable assets for Q2 was ₹203.17 billion (~$2.72 billion), a marginal slump compared with the previous quarter, which stood at ₹203.46 (~$2.73), but a significant rise compared to the same period last year, which recorded ₹189.54 billion (~$2.54 billion).
Consolidated renewable liabilities for Q2 were ₹19.6 billion (~$263 million). Compared to the previous quarter- ₹21.03 billion (~$282 million)- the liabilities had reduced; however, compared to the same period last year- ₹13.66 billion (~$183 million) the liabilities had significantly increased.
Meanwhile, standalone renewable revenue for Q2 was ₹832.1 million (~$11.17 million). Compared to the previous quarter- ₹580.3 million (~$7.79 million)- the revenues shot up significantly; however, compared to the same period last year- ₹1.17 billion (~$15.71 million)- the standalone revenues had slumped.
Standalone renewable assets for Q2 stood at ₹7.72 billion (~$103.6 million). Compared to the previous quarter- ₹7.52 billion ($100.9 million)- the assets saw a decent growth; however, compared to the same period last year- ₹8.46 billion (~$113 million)- standalone assets saw a sharp slump.
Similarly, standalone renewable liabilities for Q2 stood at ₹208.6 million (~$2.799 million). Compared to the previous quarter- ₹219.4 (~$2.9 million)- the liabilities have gone down; however, compared to the same period last year- ₹208.4 (~$2.796 million) – the liabilities have marginally increased.
In a statement issued by Tata Power, chief executive officer and managing director Pravin Sinha said, “We believe that our future growth areas rooftop solar, electric vehicle (EV) charging stations, solar pumps and microgrids in rural areas will bring in greater value and help us seamlessly align with the consumer needs. For rooftop solar offerings, we are now present in more than 100 cities in India; for EV Charging, 203 public charging points have been installed. The geographical presence of our EV charging network has been increased to 23 cities. Tata Power Solar booked 347 MW of new solar/hybrid bids, solar EPC order book today, and stands at ₹ 86.87 billion (~$1.16 billion).
Tata Power plans to monetize its 2.7 GW in renewable energy assets through a private infrastructure investment trust (InvIT). The transfer of assets to the InvIT would allow Tata Power to churn capital and substantially reduce net debt. To further bolster the capital structure, the promoters have infused ₹26 billion (~$349 million) through preferential allotment used to reduce debt.
Tata also said that there is not much of an impact likely due to this pandemic on the business of the company and its subsidiaries, joint ventures, and associates. However, there exists some uncertainty over the impact of COVID-19 on the future business performance of its coal mining companies.
For the quarter ended June 30, 2020 (Q1 2021), Tata Power posted a net profit of ₹2.68 billion (~$35.9 million), a 10.3% increase from ₹2.43 billion (~$32.6 million) in the same period last year.
Recently, Tata Power announced that its wholly-owned subsidiary, Tata Power Renewable Energy Limited, received a letter of award to develop a 225 MW hybrid renewable power project.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.