JSW Energy Q1 net up 6.6 pc to Rs 244.38 cr on higher revenues

Sajjan Jindal-led JSW Energy on Tuesday reported a 6.6 per cent increase in net profit for the quarter ended June 30 at Rs 244.38 crore mainly on the back of lower fuel and financial costs. The company's consolidated net profit was Rs 229.17 crore for the corresponding quarter last fiscal.

Its total income rose marginally to Rs 2,463.99 crore from Rs 2,427.87 crore. The company's total net generation from its power plants declined to 5,867 million units in June quarter from 6,086 million units year ago.

"For JSW Energy, this was a stable quarter. Our revenues increased by 1.5 per cent, but we managed to maintain our margins at 35 per cent. Our PAT improved mainly on the back of repayment of debt which brought down our interest cost," its director and chief operating officer Sharad Mahendra told reporters here. The company's finance costs declined to Rs 270 crore in the June 2019 quarter as against Rs 313 crore a year ago, which is attributable to proactive debt repayment or prepayment.

The fuel cost for the quarter decreased by two per cent year-on-year to Rs 1,366 crore, largely due to moderation in the imported coal prices. During the quarter, short term sales were lower at 722 million units as compared to 1,147 million units in Q1FY19 primarily due to lower short term sales at both Vijayanagar and Ratnagiri.

The company also commenced power supply from Vijayanagar plant to Telangana under 300 MW short term PPA and added 41 MW under long term PPA at Ratnagiri plant under Group captive scheme increasing the consolidated long term PPA proportion to 81.4 per cent. "We plan to take the long-term PPA proportion to over 85 per cent by the end of this fiscal," he said.

Mahendra also said that the company is considering to expand its solar portfolio significantly and will participate in the upcoming bids by SECI and states. "Currently we have a capacity of nearly 10 MW at Nandyal and Salboni, which is mainly group captive capacity.

We want to increase our solar portfolio and we are looking at bidding for a few tenders. We are in the process and we think we are comfortable at picking up projects of 200-300 MW in a year," he said. The company had, last year, shelved its plans to set up a 1,000-MW solar photovoltaic (PV) panel manufacturing facility at Vijayanagar in Karnataka and has said it would not bid for solar projects.

"We will focus only on developing projects. We feel with tariffs stabilising at Rs 2.60-2.85 per unit range it is comfortable for long-run players like JSW. We have also set up JSW Solar to participate in the reverse bidding auctions," Mahendra added. JSW Energy has also terminated the proposed Rs 6,500 crore deal of acquisition of 1,000 MW Tamnar thermal power plant from Jindal Steel and Power due to elapsing of long stop date without completion of stipulated conditions precedent.

When asked about its plans for taking over Ind Bharat Group's 700 MW incomplete thermal plant in Odisha, Mahendra said, "we will submit a renewed bid for it. The first round saw bids from other firms including Vedanta, but they were not acceptable and so lenders have now called for second round of bids for the project." The company's board, also approved the raising of long-term funds up to Rs 2,500 crore, through issuance of redeemable non-convertible debentures by way of a private placement. The consolidated net worth and consolidated net debt as on June 30 were Rs 11,928 crore and Rs 10,221 crore, respectively, resulting in a net debt-to-equity ratio of 1:0.86..