Essar Power Gujarat posts Rs 1 cr net profit in June quarter-:- Equity Research

Ruias-owned Essar Power Gujarat Ltd (EPGL) today posted Rs 1 crore net profit in the first quarter of this fiscal due to improved efficiency. "Finance costs for first quarter of 2016-17 were lower by 12 percent, leading to a PAT (profit after tax) of Rs 1 crore against a net loss of Rs 126 crore in the corresponding quarter in the previous fiscal," the company said in a release. According to the statement, EPGL, which owns and operates a 1,200 MW imported coal-fired thermal power plant at Salaya in Gujarat s Devbhumi Dwarka district, has recorded an impressive 90 percent growth in Ebitda for the quarter ended June 2016. This spike in performance stems from significantly higher plant availability, a 32 percent jump in energy sales, a 13 percent reduction in coal cost per unit because of a widening coal basket, e-auction based procurement, falling coal prices and substantial efficiency improvements, it said. In the June quarter, plant availability improved by 82 percent, leading to a robust growth in sales, which stood at Rs 522 crore, up from Rs 396 crore a year ago. Operational efficiency, especially the heat rate, improved by about 1.5 percent following turbine overhaul in one of the units. "Essar Power Gujarat's performance is in line with our goal to harness the maximum potential of our assets through efficiency gains. We are committed to replicating this success across all our plants," Essar Power Executive Vice-Chairman Sushil Maroo said in the statement. EPGL MD Ramesh Kumar said, "We have had an excellent quarter not only because of lower coal cost, but owing to the fact that we have been able to operate efficiently." The focus is to further bring down operation and maintenance costs, which have been consistently below CERC norms. The company is on course to harness greater efficiencies and significant cost savings with the expected commissioning of a sea water intake system and coal conveyor corridor.