Torrent Power rallied 7.54% to Rs 352.15 after consolidated net profit jumped 35.2% to Rs 373.87 crore on 19.5% decline in net sales to Rs 3,007.05 crore in Q1 June 2020 over Q1 June 2019.
Consolidated profit before tax (PBT) soared 46.3% to Rs 467.82 crore in Q1 June 2020 as against Rs 319.87 crore in Q1 June 2019. Current tax expense for the quarter surged 20.9% at Rs 87.87 crore as against Rs 72.67 crore paid in Q1 June 2019. The result was declared after trading hours yesterday, 6 August 2020.
The major drivers of increase in the reported total comprehensive income for the quarter are favourable order from the Appellate Tribunal For Electricity in respect of disputed carrying cost recovery pertaining to an earlier years. It was also boosted by increase in contribution from gas-based power plants including due to operationalisation of long term PPA for 278 MWs capacity from Q2 19-20, partially offset by lower contribution from merchant power sales. Total comprehensive income was also driven by decrease in interest cost, mainly due to repayment of loans and reduction in interest rates.
Performance of franchised distribution businesses was impacted due to COVID-19 pandemic causing reduction in electricity demand mainly in commercial and industrial customer categories and increase in T&D loss and increase in tax expenses.
The company has an aggregate installed generation capacity of 3,879 MW comprising of 2,730 MW of gas-based capacity, 787 MW of renewable capacity and 362 MW of coal-based capacity.
The company distributes nearly 16.66 billion units to over 3.65 million customers in the cities of Ahmedabad, Gandhinagar, Surat, Dahej SEZ and Dholera SIR in Gujarat; Bhiwandi, Shil, Mumbra and Kalwa in Maharashtra and Agra in Uttar Pradesh.
Speaking on the Q1 result, Samir Mehta, the chairman of Torrent Power, has said that: "COVID-19 pandemic has drastically impacted electricity demand & customer payments, posing unprecedented operational and cashflow challenges, in both generation and distribution of electricity across the power sector. For Torrent, the financial impact has been more pronounced in our Franchised Distribution business in Agra and Bhiwandi."
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"Our strong balance sheet, robust business model and talented pool of employees allowed us to tide over the unprecedented and difficult situation without any operational disruption and with manageable financial impact. With the easing of lockdown restrictions, we are already witnessing a gradual and steady recovery in demand & cashflows in our geographical areas and are looking forward to new growth opportunities arising from Government's strong desire to reform the power sector," he added.
Torrent Power is an integrated utility engaged in the business of power generation, transmission and distribution with operations in the states of Gujarat, Maharashtra and Uttar Pradesh. It is also engaged in the business of cables manufacturing with operations in the state of Gujarat.
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