Tata Power

The company posted a surprising net loss. While most analysts had expected the company to post a consolidated net profit of around Rs.245 crore, it posted a consolidated net loss of Rs.84 crore v/s net loss of Rs.1187 crore in Q2FY12. The only solace which one can find is in the fact that the loss is lesser than previous Q2. The good part is that it had a better EBIDTA at Rs.1509 crore, up 9% on a YoY. But EBIDTA margins showed the pressure, down from 22% to 19.7%. The company was pushed into the red due to the additional impairment charge of Rs.250 crore, which was on account of a change in the long-term foreign currency outlook at its Mundra plant in Gujarat. The forex loss of Rs.32 crore pushed it further into the red.

Its UMPP at Mundra, Gujarat runs on coal imported from Indonesia. And this cost is biting into the company as on one hand the costs are up and on the other, it is unable pass on this cost to the consumers. Its total power and fuel cost has surged, YoY by a whopping 72%, the biggest cost component of its operating expenses. Interest outgo is also pretty huge at Rs.623 crore, up 88%. Its PBIT from coal business fell 51% (YoY) and down 13% (QoQ) and this was due to lower coal price realization of its Indonesian coal companies. Its power generation capacity touched 6900 MW with commissioning of its third unit of Mundra UMPP. It also commissioned its second unit of 525 MW at 1050 MW Maithon Mega Power project. Also Tata Power recently issued a notice to the BEST Undertaking, asking it to clear its arrears of Rs.894 crore within 60 days or else, the company has threatened to pull out of the existing arrangement with BEST and sell electricity in the open market.