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India's Adani Power Fourth Quarter Profit Falls on Lower Tariffs and Higher Costs

Adani Power, an Indian thermal power company, reported on Wednesday a 5% drop in its fourth-quarter profits. This was due to lower tariff realizations and higher operational costs.

The company, which is part of billionaire Gautam Adani's Adani Group said that its consolidated profits fell to 25,99 billion rupees (307.2 million dollars) for the three-month period ended March 31, from 27,37 billion rupees the year before.

The quarter saw a rise in power sales of 18.9% compared to the same period last year, but revenue only grew by a modest 6.5% due to lower merchant tariffs.

The company stated that the company's supply of electricity exceeded the demand. This led to a decrease in merchant tariffs, which in turn resulted in a lower realisation during the third quarter.

Merchant tariffs are the prices at which electricity is purchased on the open market.

Adani Power didn't disclose how much merchant tariffs dropped during the third quarter of 2017 compared to the same period a year ago.

The company said it also faced higher operating costs during the quarter because of three newly acquired factories in the September quarter of last year.

Adani Power's expenses totaled $9.2 million in the fourth quarter.

NTPC and JSW Energy have yet to release their quarter results.

Adani Power shares fell 3% after the results. Reporting and editing by Sonia Cheema in Bengaluru. $1 = 84.6170 Indian Rupees

(source: Reuters)