Tata Power on May 5 said demand for power grew nine percent in FY23 and that there has been a huge increase in demand from all sectors, not only from industrial and commercial but also the residential sector. It also depends on weather conditions, the company’s MD and CEO Praveer Sinha said.

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The company expects demand to peak in the range of 230 gigawatt (GW) in the current fiscal. “Last year the peak was 216, so this year, it should be in the 230 gigawatt (range), but the rains in the last two months have made the whole prediction a little difficult to make. But going forward, if it becomes much warmer, the country is ready to meet the requirement of power,” Sinha told CNBC-TV18.

Tata Power MD’s remarks come a day after the company reported its quarterly earnings for the January to March 2023 quarter, in which it saw its profit after tax rise for the 14th successive quarter.

The Tata group company reported a 48.5 percent year-on-year jump in net profit at Rs 938.8 crore for the fourth quarter of last fiscal. In the March quarter, total revenue stood at Rs 12,453.8 crore, up 4.1 percent against Rs 11,960 crore in the corresponding period of the preceding fiscal.

The EBITDA margin stood at 15.5 percent in the reporting quarter compared to 15.6 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortisation.

“Over the last few quarters, there has been huge consistency in the profitability and the EBITDA of the company because its existing operations — generation, operations, coal, hydro gas — all have done very well,” Sinha said. He further said, the firm’s transmission and distribution operations have also stabilised in addition to renewable operations, especially the generation part of it. The availability of all plants is more than 99.9 percent, he added.

He, however, noted that Tata Power's coal profitability wasn’t very high in Q4 as coal prices saw a sharp downtick. The coal profit is linked to the losses of Coastal Gujarat Power Ltd (CGPL) or the Mundra plant that were high last year as well as in the previous years.

“The difference between the loss of Mundra versus the profit of coal mines is virtually a very, very small amount and it is not making a huge impact. While in absolute numbers, it will look that the coal profit is there, but so is the absolute number of losses of Mundra. If you combine both of them, we will never have a very high profit coming between the both entities,” he explained.

Also Read: India's power regulator allows Tata Power to supply from Mundra UMPP under "extraordinary circumstances"

Reflecting on the solar EPC, he said that business went a little slow in the last year, primarily because of the supply chain disruptions and also because of the very high prices of modules.

However, the prices have come down in the last six months, so the company will be executing most of the projects in the next 12 to 18 months.

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