States are hopeful of resolving Mundra issue soon, said Praveer Sinha, MD and CEO of Tata Power. "All the states agreed that this is a low cost power and they would like to continue supply from this power," he added. Tata Power's third quarter earnings have showed some signs of improvement.

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“The performance has been very good and very consistent for this quarter for Tata Power. Both EBITDA and profits have improved. This is the third quarter continuously that we have improved on EBITDA and profit," Sinha said.

“We have made some changes in Mundra – one is the coal prices which have come down. However, there are two other things that have happened. One is the blending of coal that has helped us to use different varieties and different types of coal which is helping us to bring down the average cost of coal that is to be used," he added.

"Secondly, we have been doing a lot of sourcing in a very smart way and that has helped us to spot purchases, distressed sell of coal, which has been there in the market, we have been able to get those coal. That has brought down the average under-recovery," he further added.

This will continue for some more time typically, he said, as market prices for imported coal has been soft.

"There were some delays in some of the states especially in Maharashtra where the government was formed and the new minister has taken charge just a few weeks back. All the states are working towards resolving this," Sinha stated.

“We definitely expect that all the states within this quarter should take decision and there is a sense of urgency that we see amongt all the states to resolve this,” he added.

In terms of power consumption, he further mentioned, “On an overall basis, we do find that there are shoots of recovery which are happening. The months of December, January are not high consumption months. We only see the trend of high consumption starting from March onwards when the summer starts in many places."

On renewable business, he said, “Our renewable portfolio is doing very well. We have added nearly 400 megawatt in last twelve months and that has helped us to improve our EBITDA. Our EBITDA for renewables has gone up by nearly 15 percent and we see that consistently the EBITDA for each quarter is going up because of better performance by the renewables."

“We expect that going forward, Tata Power will play a very critical role in improving the distribution companies’ (DISCOMs) financial health and their operational capability,” he noted.

Pointers

Tata Power On CNBC-TV18

-Blending At Mundra Aided Improvement In EBITDA

-Have Been Able To Source Coal At Better Rates For Mundra Plant

-Not Expecting A Big Uptick In Coal Prices Over Next Few Qtrs

-States Are Hopeful Of Resolving Mundra Issue Soon

-Centre Has Issued Strong Statement To States To Resolve Mundra Issue

-Mundra Plant Might Not Be Able To Operate If PPA Is Not Modified By FY20-end

-Expect Mundra Recovery To Sustain At Current Levels

-December & January Are Not Seasonally Strong For Electricity Demand

-Have Seen A Slight Recovery In Power Demand In January

-Expect Renewable Biz Momentum To Continue

-Some Payments Have Come Through From Discoms For Renewable Biz

-Proposed ADITYA Scheme Would Be Very Positive For Power Sector

-ADITYA Scheme Would Transform Distribution Sector

-Co Will Play A Very Critical Role In Turnaround Of Discoms

First Published:Jan 30, 2020 1:33 PM IST