Neyveli Lignite Corp, the PSU mining lignite and generating power posted very disappointing numbers for Q3FY16. Its net profit for the quarter slumped by a huge 85% (YoY) to Rs.48 crore on a 16% drop in income at Rs.1255 crore.

The PSU kept the operating costs stable at Rs.1205 crore; of this, 46% is towards employee cost and this, during the quarter, rose over 3%. EBITDA was down 44% and other income slipped 26%. Finance cost was up 19% though tax came down 45%. Both its both segments did not do too well with power generation posting a loss and lignite showing a decline in both topline was well as EBIT.

Its net profit for 9MFY16 was down 16% at Rs.758 crore. Despite this, the company has declared a Rs.1.50/share interim dividend. Typical of PSUs where Govt owns 90% stake, reserves is very healthy at Rs.13,194 crore at end of H1FY16 cash balance was at Rs.4664 crore.

The PSU has a lignite capacity of 30.60 MTPA and power generation is at 2990 MW.  Looking ahead, the company is putting up a Lignite mine at Bithnok, linked to a thermal plant with a 250 MW at a cost of Rs.2700 crore. It is also setting up a Barsingsar Thermal Power Station and lignite mine in Hadla at a total cost of Rs.2,628 crore. The PSU is also looking at the option of reviving its lignite mining and power plant at Jayankondam in Tamil Nadu, though on a smaller scale – 500 MW power capacity v/s earlier envisaged 1500 MW. The company will be soon commissioning two power projects at a total cost of Rs 10,000 crore, taking its total generation capacity to 4,240 MW.