The operational results during the current quarter have been impacted on account of (i) inclusion of interest cost in the operational exenditure due to commissioning of 250 MW Unit II of Jaypee Bina Thermal Power Plant in April 2013 (ii) The current revenue at 500 MW Jaypee Bina Thermal Power Plant is on account of provisional tariff, pending final tariff determination (iii) Lower realisation in respect of 1000 MW Jaypee Karcham Wangtoo H.E. Plant due to prevailing market conditions and (iv) Long Term Open Access (LTOA) charges in respect of 1000 MW Jaypee Karcham Wangtoo H.E. Plant were not payable in the corresponding quarter/ period of previous year, since LTOA got transferred to the company from PTC India only in Jan 2013.  

• In a empirically weak quarter, the sales (excluding other operating income) were higher by 15% to Rs 492.41 crore. Though there is no generation from Vishnuprayag, which was not operational on account of Uttarakhand floods w.e.f from June 16, 2013 the quarter has the benefit of generation of additional 250 MW unit capacity i.e. the second unit of Bina TPS which got commissioned effective April 2013. In respect of Hydro Power Projects, the water availability in the first half of the financial year is higher as compared to the second half. As such, the power generation in the first two quarters is about 70% of the annual power generation, while balance 30% is generated in third and fourth quarter.

• Apart from change in power mix, the 660 bps crash in operating margin can be attributed to higher transmission charges. Though all cost heads barring cost of fuel was higher for the quarter the transmission charges witnessed sharp jump. The transmission charges as % of sales was higher by 680 bps to 9.1%. Similarly the operating exp was up by 50 bps to 4.8%, the staff cost was higher by 30 bps to 3.8% and that of other expenses was up by 30 bps to 3.7%. On the other hand the cost of fuel was lower by 130 bps to 22.5%. Hit thus by lower OPM, the operating profit was lower by 3% to Rs 276.37 crore despite higher sales.

• The other income was up by 89% to Rs 21.41 crore, the interest cost was up by 25% to Rs 360.08 crore and the Depreciation was up by 12% to Rs 107.34 crore. Higher interest and depreciation cost is on account of charge of the same to P&L account with new generation project get commissioned. Thus at PBT level it was a loss of Rs 169.64 crore compared to a loss of Rs 104.25 crore in the corresponding previous period.

• The taxation was a write back of Rs 16.59 crore compared to Rs 6.67 crore in the corresponding previous period. Thus at PAT level it was a loss of Rs 153.05 crore compared to a loss of Rs 97.58 crore in the corresponding previous period.

Jaypee Powergrid Ltd (JPL), a subsidiary of the Company commmissioned the transmission system from Wangtoo to Abdullapur w.e.f. April 01, 2012. Therefore, the long term open access (LTOA) charges in respect of Karcham Wangtoo HEP became payable by the Company from the said date. However, since LTOA got transferred to the Company from PTC India Ltd (PTC) only in January, 2013, LTOA charges including arrears became payable from Q4FY13 onwards. In FY12 LTOA charges were not payable as the transmission line of JPL was under construction. A settlement agreement dated August 5, 2013 has been signed between PTC India and the company in respect of Power Purchase Agreement (PPA) dated March 21, 2006 for sale of 704 MW power generated by 1000 MW Jau[ee Karcham Wangtoo HE Plant. Accordingly a petition for determination of tariff has been filed by the company before CERC.

YTD Performance

Sales were higher by 20% to Rs 2247.86 crore and the operating profit was higher by 4% to Rs 1625.59 crore. Even as other income stand higher by 21%, dragged by higher interest and depreciation and taxation, the PAT was lower by 58% to Rs 191.71 crore.

Other developments

The Company today has operating capacity of 1700 MW (Hydro) and 500 MW (Thermal).

Due to natural calamity in Uttarakhand, generation for 400 MW Jaypee Vishnuprayag H.E. Plant continues to be affected w.e.f. June 16, 2013. Restoration and associated works including clearing of debris has started and the Plant is scheduled to commence generation by March, 2014. 400 MW Jaypee Vishnuprayag H.E.Plant has adequate insurance policy including all risks with Business Interruption provisions. Company has received interim insurance claim amount of Rs 25 crore (approx.) during the current period ended December 31, 2013. Further, commercial aspects of this Force Majeure event are being addressed in accordance with Power Purchase Agreement with Uttar Pradesh Power Corporation Limited (UPPCL).

MAT, amounting to Rs 56.22 crore, for the period ended December 31, 2013 is available as credit to be claimed in subsequent years. Therefore, the same has been treated as MAT credit entitlement. Deferred tax liability of Rs 76.48 crore has been provided in the accounts for the current period.

The scrip is hovering around Rs 12.80.