Sajjan Jindal-led JSW Energy today reported a 5.7 per cent increase in consolidated net profit for the quarter ended June 30 Rs 229.5 crore mainly due of improvement in sales.
The company had clocked a net profit of Rs 217 crore in the corresponding quarter last fiscal.
Its consolidated income during April-June increased to Rs 2,427.8 crore over Rs 2,334 crore in Q1 of 2017-18.
"There has been an improvement in merchant tariffs and thus the improvement in realisations. However, its impact has been offset because of the increase in coal prices in the international market. Domestic coal prices have also increased by 17-18 per cent as compared to last year," company's executive vice-president Sharad Mahendra told reporters here.
The fuel cost for the quarter increased by 24 per cent to Rs 1,389 crore as compared to last fiscal, primarily due to increase in international prices of coal, further exacerbated by weakening of rupee.
"The merchant power markets continue to be robust. The average monthly merchant prices at the exchange peaked in May, 2018 at Rs 4.67 per unit and averaged at Rs 4.13 for the quarter," he said.
During the quarter the company's short term sales were 1,147 million units as compared to 1,834 million units in Q1 FY18, a decline of 37 per cent on account of increase in long term PPA proportion to 100 per cent at Karcham Wangtoo plant, and lower contracted power with Karnataka discoms at Vijayanagar plant.
The company's consolidated deemed plant load factor was 69.8 per cent as against 76.3 per cent in the corresponding quarter of the previous year.
Speaking about the company's solar power initiatives, Mahendra said, "the prices at which the tenders are being bid, we have a doubt whether those prices are sustainable. So we are waiting for the right time to enter into the sector in a big way though we have made a small beginning by commissioning 12.1 MW rooftop and ground mounter solar capacity within the JSW Group."
He further said that instead of participating in these large bids, the company is looking at bilateral arrangements within the group company as well as exploring the outside options.
"We have benchmarked certain level of returns which we want and we will decide accordingly on the solar capacity addition," Mahendra said.
The company is also relooking at its plans of setting up manufacturing facilities for solar photovoltaic panels and cell/wafers.
JSW Energy had proposed to set up a facility for manufacture of solar PV panels with a capacity of 1,000 MW in FY19, which would be located in Karnataka and was also exploring entering the PV cell / wafer manufacturing space.
"We had said we will be looking at entering into manufacturing of PV panels and cells, but considering the changes that happened in China, there was a steep fall in prices. So we had to rethink whether we should go for manufacturing or import modules. We are waiting for the right time," he said.
On the electric vehicles business, he said the company continues to make steady progress towards putting together the building blocks in respect of product and technology strategies, business partnerships and organisation structure.
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