Tata Power reported Improved PAT and Strong operational performance

Tata Power is one of the India's largest integrated power companies with significant international presence. The company operates in Logistics to Generation, Transmission to Distribution and Trading activities and also is exploring various renewable sources of energy in India and globally. Tata Power is establishing India's first large hydro-electric project in Khopoli, Maharashtra and driven by its late founder, Shri Jamshetji N. Tata's pioneering vision. Tata Power today is one of the largest renewable energy players in India.

Recently, Tata Power announced the forth qaurter result and the anual result for FY15. Tata Power reported improved PAT and strong operational performance. The forth qaurter performance report of the company showed that its consolidated revenue stood at Rs 8240 crore in Q4FY15 as compared to Rs 8902 crore in the fourth quarter in FY14, down by 7.4 per cent. This reduction was mainly due to negative growth in coal business as lower price realization from coal companies. On sequential basis too, March 2015 quarter revenue was down by 6.4 per cent compared to December 2014 quarter.

The total expenses during Q4FY15 decreased by 11.8 per cent on yearly basis, predominantly due to a 43.55 per cent reduction in raw material expenses, a 23.54 per cent reduction in Depreciation expenses, a 15.53 per cent reduction in Power & Fuel expenses, and a 9.39 per cent reduction in Purchase of Traded Goods during the same period. However, the employee cost during Q4FY15 increased by 10.10 per cent on yearly basis. The depreciation expenses decreased by 23.5 per cent despite of marginal increase in Fixed assets, predominantly due to a change in the company’s  depreciation method from written down value method to straight line method.

The opertaing profit of the forth quarter of FY15 increased by 28 per cent, Rs. 1408 crore comapred to Rs 1097 crore in Q4FY14, due to 23.54 per cent lower depreciation expenses, lower coal price in its subsidiary Coastal Gujarat Power (CGPL) and higher contribution from its Mumbai operations.

On sequential basis, the consumption of raw materials, employee cost and depreciation increased by 70.98, 16.4, and 2.2 per cent respectively during Q4FY15. However, the total expenses decreased by 12.8 per cent against Q3FY15, mainly due to lower cost of traded goods and power & fuel expenses on sequential basis.

The EBITDA in Q4FY15 increased by 29.74 per cent against December 2014 quarter and 7.7 per cent against March 2014 quarter and stood at Rs 1962 crore. Further, the EBITDA margins during the reported quarter expanded by 7 basis points on sequential basis and 3 basis points on yearly basis; and stood at 0.21 per cent.

The impact of lower coal price realization were offset by better operational efficiencies of coal mines as well as forex gains on VAT related settlement. Hence Tata Power managed to post a Net profit Rs 159 crore during March 2015 quarter against a loss of Rs 145 crore in March 2014 quarter. However, the company reported a 19.52 per cent reduction in its net profit on sequential basis.

As per the anual performance for FY15, the revenue in FY15 stood at Rs 34337 crore compared to Rs. 35873 crore in FY14, down by 4.2 per cent, due to lower revenue from Trombay units and lower realisation from coal companies. The total expenses decreased by 4.2 per cent during the same period. EBITDA decreased by 9.9 per cent, EBITDA margin decreased by 1 basis point to 0.20 per cent.

There was Rs 417 crore of other income in FY15 against a other expenses of Rs 562 crore in FY14. The company managed to post profit after tax of Rs 168 crore compared to a loss of Rs 260 crore in FY14, mainly due to favourable impact of forex in VAT settlement & in coal companies, favourable impact of Tarrif order in Maithon Power, and CGPL's higher contribution, due to reduced coal prices & depreciation.