In 2020, Tata Power had decided to restart its loss-making ultra mega power plant (UMPP) in Mundra. Earlier in May, 2022, the Government of India gave directions to the Mundra plant to run all its units at full capacity for the next months as there was an energy crisis looming.

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Meanwhile in May, Tata Power also moved the Central Electricity Regulatory Commission (CERC), asking for a higher tariff than the one set by the committee. While some issues with respect to the plant have been resolved, several orders are still pending.

Talking to CNBC-TV18, Praveer Sinha, MD & CEO, Tata Power said, “CERC has already heard the matter and I do expect that in the next four to six weeks we will get the order.”

He added that whatever gets decided, especially in terms of the cost pass-through for coal, the fixed cost and the capacity chart, all that will become the future baseline for supply from the plant.

Also read: Tata Power expects Gujarat government to decide on buying power from Mundra in few weeks

One of Tata Power's major wealth drains is its 4,000-MW ultra mega power plant in Mundra, Gujarat, operated by its subsidiary Coastal Gujarat Power (CGPL). The project was commissioned in March 2013 but and since then it has only made a profit once in the last eight years.

However, Sinha, remains positive about Mundra. He said, “Mundra continues to be one of the low-cost producers and one of the biggest suppliers of electricity to Gujarat, and some other states also."

He felt that there was a market for Mundra. "With the kind of increasing demand that we are seeing in our sector, this will continue to supply reliable and efficient power to all the consumers in future,” he added

Also read: Tata Power expects Gujarat government to decide on buying power from Mundra in few weeks

Finances

The quarterly net profit of the Tata group company surged 84.9 percent over the corresponding period a year ago — a 12th straight quarter of growth.

Revenue from the power generator increased 43 percent year-on-year (YoY) to Rs 14,030.7 crore, according to a regulatory filing.

Analysts in a CNBC-TV18 poll 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 more upside in the upcoming quarter due to the cool-off in the commodity prices.

“Steel prices and the other commodities have come down by nearly 25 percent in the last quarter so we have now gone and booked all our requirements of steel, copper, and aluminium for the coming year. So the impact is 25 percent saving in the cost of steel items and other commodities.

"Similarly, the prices of modules, which we were importing from China, had gone up to 26-27 cents. Now it has come down to 23 cents and we expect it to come down further to 20-21 cents in the next few months,” said Sinha.

Talking about other projects, he said that benefits from the Odisha discom will be visible in a few quarters. “There are a lot of cleanups that we have done, we have changed the meters, the collections have improved it, but it is still work in progress,” he said.

The Tata Power stock ended up 95 paisa or 0.42 percent at Rs 226 on the BSE on October 31.

Also read: Tata Power beats Street estimates with almost two-fold jump in quarterly net profit

(Edited by : Shoma Bhattacharjee)