Tata Power reported a sharp decline in its pretax profit due to costs rising faster than revenue.

For the quarter ended December, the company’s revenue increased by about Rs 326 cr to Rs 7,041 cr compared to last year, but total operating expenses rose faster, by about Rs 580 cr on year.

As a result, profit before tax and the share of associate companies plunged to Rs 9.1 cr from Rs 246.28 cr last year and Rs 15.48 cr during the previous quarter.

Much of the increase in costs was due to the company buying power from outside.

Cost of power purchased increased by about Rs 374 cr to 2,071 cr compared to the year-ago quarter.

Fuel costs also added to the increased expenses, and were higher by Rs 207 cr at Rs 2,491 cr.

However, the company was still able to report net profit of Rs 612 cr for the quarter compared to Rs 619 cr last year.

This was due to a tax writeback of Rs 320 cr and Rs 457 cr it got from associate companies and joint ventures.

However, profits obtained from joint ventures and associate companies was also lower by Rs 49 cr compared to last year, but was higher than the Rs 425 cr contributed by them in the preceding quarter.

“We will continue to pursue renewable energy opportunities to increase our operational efficiencies,” said Anil Sardana, CEO & Managing Director.

(Now you can get topic-based alerts via WhatsApp)
Read More On..