 "Essar Power finally turns around with Rs 39-cr profit")
After entering the business two decades ago, Essar Power has finally turned around with a small profit of Rs 39 crore in 2015-16.
The management is bullish about remaining healthy in current year and expects to close the year with about Rs 550 crore net income.
“This is the first time since we entered the sector in 1997 that we have turned around. Against a net loss of Rs 684 crore in 2014-15, we closed 2015-16 with a net profit of Rs 39 crore. And, from the improvement in the margins in the first quarter of the current financial year, I am hopeful of a net profit of about Rs 550 crore if coal prices and other variables remain more or less stable,” Executive Vice-Chairman Sushil Maroo told a group of visiting journalists here.
He said lower coal prices and other efficiency measures and an average plant load factor of about 80 per cent, pushed up the earnings before interest, taxes, depreciation, and amortisation by a whopping 168 per cent to Rs 533 crore in 2015-16, from Rs 199 crore the previous year, while margins rose nearly threefold to 28 per cent from 11 per cent during the reporting period.
Coupled with this, net sales rose to Rs 1,905 crore from Rs 1,867 crore, he said. Maroo said while the Ebitda margin jumped to 28% compared to 11% in FY15, income from operations grew 80 per cent to Rs 160 crore in the first quarter of this financial year from Rs 89 crore in the same period previous financial year.
“Another reason for the turnaround has been the reverse e-auction of coal, which helped us lower our input cost due to larger supplier base arising from increased competition,” Maroo said.
He said since all operational assets (five plants out of the total seven generating over 3,500 mw of electricity) are under the 5/25 scheme of the Reserve Bank, the interest burden has also come down to some extent, still the company at the consolidated level paid over Rs 2,000 crore in interest to its creditors.
The management is bullish about remaining healthy in current year and expects to close the year with about Rs 550 crore net income.
“This is the first time since we entered the sector in 1997 that we have turned around. Against a net loss of Rs 684 crore in 2014-15, we closed 2015-16 with a net profit of Rs 39 crore. And, from the improvement in the margins in the first quarter of the current financial year, I am hopeful of a net profit of about Rs 550 crore if coal prices and other variables remain more or less stable,” Executive Vice-Chairman Sushil Maroo told a group of visiting journalists here.
He said lower coal prices and other efficiency measures and an average plant load factor of about 80 per cent, pushed up the earnings before interest, taxes, depreciation, and amortisation by a whopping 168 per cent to Rs 533 crore in 2015-16, from Rs 199 crore the previous year, while margins rose nearly threefold to 28 per cent from 11 per cent during the reporting period.
Coupled with this, net sales rose to Rs 1,905 crore from Rs 1,867 crore, he said. Maroo said while the Ebitda margin jumped to 28% compared to 11% in FY15, income from operations grew 80 per cent to Rs 160 crore in the first quarter of this financial year from Rs 89 crore in the same period previous financial year.
“Another reason for the turnaround has been the reverse e-auction of coal, which helped us lower our input cost due to larger supplier base arising from increased competition,” Maroo said.
He said since all operational assets (five plants out of the total seven generating over 3,500 mw of electricity) are under the 5/25 scheme of the Reserve Bank, the interest burden has also come down to some extent, still the company at the consolidated level paid over Rs 2,000 crore in interest to its creditors.