Pramod Menon | Director-Finance, JSW Energy
What will be the impact of the Paris summit on corporate strategies of the power sector? Do they have to redraw their strategies in the wake of its outcomes?
At this point in time we are not thinking of changing strategies, but looking at implications. As a responsible company we also plan to interact with the government on the MoEF norms, the direction of which is going that (Paris Summit) way. And we are all preparing the Indian companies to be nimble footed and tighten them particularly in terms of automobile industry, particularly in terms of upcoming BS-VI norms and skipping BS-V. As a society also we are being prepared for these kind of norms. Ultimately, it will benefit the humanity.
Traditionally power companies are saddled with old technologies, unlike you who have started off with modern technologies. To what extent it is difficult to implement policies directed at achieving the Paris Summit outcomes?
Implementation is not an issue if we are clear about how much investment is required and how much pain we have to bear and how much of it should be shared.
Whether you will be in a position to share the pain with the customer, is the issue....
It all depends on how you have entered into PPAs with distribution companies, and so say if something has to be successful there should be a meaningful sharing of the pain. Ultimately, it has to be shared by the customer as well.
Can you share some of your operational and financial performance details during the recently concluded quarter?
During the quarter ended December 2015, the thermal power plants have achieved an average deemed PLF of 90 per cent as against 87 per cent in the corresponding quarter of previous year. The hydro power plants have achieved an average PLF of 24 per cent during the current quarter, given the impact of seasonality and availability of water. The merchant sales during the quarter were 2,937 million units and the sales under the Long Term PPAs were at 3,032 million units.
The company earned a Profit After Tax (PAT) of Rs 321 crore in the current quarter as against Rs 380 crore in the corresponding quarter of the previous year, a decrease of 16 per cent, due to higher interest and depreciation due to acquisition of Hydro assets and higher provision of taxes.
The Consolidated Net Worth and Consolidated Net Debt as at December 31, 2015 were at Rs 8,615 crore and Rs 15,506 crore respectively resulting in a net debt to equity ratio of 1.80 times. The fuel cost for the current quarter declined by 11 per cent year-on-year (YOY) to Rs 1,100 crore, primarily due to decline in the international prices of coal, partly offset by depreciation in the Indian rupee versus the US dollar.
What are your possible budget recommendations?
Most important thing is revival of economy, though it may not impact the sector directly, it will derive indirect benefits for the sector as a whole. Industry associations are submitting to the government various demands proposed by the industry.
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