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Tata Power shares ended up 95 paisa or 0.42 percent at Rs 226 on the BSE on October 31. The Tata group company’s quarterly net profit rose 84.9 percent. However, the largest power plant in Mundra is a drain on the company’s wealth. Praveer Sinha, MD & CEO, Tata Power, though remains positive about Mundra. This is what he told CNBC TV18.
In 2020, Tata Power has decided to re-open a large scale power plant (UMPP) at Mundra. In early May, 2022, the Indian government directed the Mundra plant to operate at full capacity for the next month due to the looming power crisis.
At the same time last May, Tata Power also moved the Central Electricity Regulatory Commission (CERC), by Demanding a higher tax rate than the committee set. While some of the factory issues have been resolved, several orders are still pending.
Speaking to CNBC-TV18, Praveer Sinha, MD & CEO, Tata Power said, “CERC has heard the matter and I expect that in the next four to six weeks we will get an order.”
He added that anything that is decided, especially in terms of coal costs, fixed costs and capacity schedules, will all become the basis for future plant supplies.
One of Tata Power’s major wealth drains is its massive 4,000 MW power plant in Mundra, Gujarat, operated by its subsidiary Coastal Gujarat Power (CGPL). The project was commissioned in March 2013 but since then it has only made a profit once. In the last 8 years.
Sinha, however, remains positive about Mundra. He said, “Mundra continues to be one of the low cost generators and one of the largest suppliers of electricity to Gujarat, and some other states.”
He felt there was a market for Mundra. “With the increased demand we see in our sector, this will continue to provide reliable and efficient energy to all consumers in the future,” he added.
Finance
The Tata Group’s quarterly net profit rose 84.9 percent over the corresponding period last year – the 12th consecutive quarter of growth.
Revenue from generators increased by 43% compared to the same period last year (YoY) to 14,030.7 billion rupees, according to According to the implementation of the regulations.
Analysts in a CNBC-TV18 survey had estimated the company’s net profit for the three-month period at Rs 665 crore and revenue at Rs 12,600 crore.
Sinha said they expect an upward trend in the coming quarters as commodity prices cool.
“The price of steel and other commodities has decreased by almost 25 percent in the last quarter, so we have gone and booked all our requirements on steel, copper, and aluminum for the coming year. So the effect is a saving of 25 percent in the cost of steel items and other commodities.
“Similarly, the price of the module, which we import from China, has increased to 26-27 cents, now it has decreased to 23 cents and we expect it to further decrease to 20-21 cents in the next few months,” said Sinha.
Talking about other projects, he said benefits from Odisha discom will be seen in few quarters. “There’s a lot of cleaning we’ve done, we’ve changed the meter, the collection has improved it, but it’s still working,” he said.
Tata Power shares ended up 95 paisa or 0.42 percent at Rs 226 on the BSE on October 31.
(edited by: Shoma Bhattacharjee)
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