Torrent Power rose 6.13% to Rs 297 after consolidated net profit jumped 83% to Rs 754.41 crore on a 11.5% rise in net sales to Rs 3842 crore in Q2 September 2019 over Q2 September 2018.
The company reported a 7.08% rise in EBITDA to Rs 1104 crore in Q2 2019 as against 1031 crore in Q2 2018. The result was announced after market hours yesterday.
Major drivers for the increase in Q2 total comprehensive income include contribution of new long term PPA for 278 MWs Unosugen plant; favourable judgement from the Appellate Tribunal for Electricity in respect of disputed carrying cost recovery; reduction in tax expenses due to recoverability of previously unrecognised MAT credit; and improved performance of franchised distribution businesses.
Factors affecting profit included one off provision towards potential damages and other project related costs arising from expected delays in setting up a wind power project; decrease in contribution from long term PPA of Sugen plant due to new CERC tariff regulations; and increase in finance and depreciation costs, reflecting additional capex in distribution and renewable projects.
Meanwhile, the company's board approved an arrangement to transfer cable business undertaking to TCL Cables, a wholly owned subsidiary of the company. The transaction will take effect from 1 April 2020 and after a cash consideration of Rs 214.5 crore. The scheme is also subject to an approval from National Company Law Trubinal. The board has also approved a purchase of 20 lakh equity shares of Rs 10 each from TCL Cables for a consideration of Rs 2 crore. After this acquisition, TCPL will become a direct wholly owned subsidiary.
Meanwhile, the NSE Nifty 50 index was trading 0.4% lower at 11,869.05.
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