Tata Power Company has reported a net profit of Rs
1,349.5 million for the quarter ended 30 September 2002
as compared to Rs 2,448.1 million for the quarter ended
30 September 2001.
net sales have increased from Rs 11,044.8 million in SQ-2001
to Rs 12,021.4 million for the quarter ended 30 September
2002. The other income has decreased from Rs 984.6 million
in SQ-2001 to Rs 564.6 million in SQ-2002.
Crisil had recently
downgraded the AAA (highest safety) ratings assigned to
the long-term non-convertible debenture programme of Tata
Power by a notch due to the companys commitment
to fund the Rs 500-crore capital expenditure plan of Tata
The rating agency
is uncomfortable with Tata Powers increasing exposure
to the Tata groups telecom ventures, particularly
Tata Teleservices, where returns are only expected in
the long term.
which have now become significant in relation to the companys
net worth, have resulted in considerable increase in Tata
Powers net debt levels and will impact its credit
protection measures, both through lower accruals and reduced
liquidity, a release said.
The rating change
also reflects the companys diversification plans
in the power sector - which would expose it to significantly
higher credit risks - whether it is in the Mumbai licencee
area or in its captive power business, feels Crisil. The
company has been ramping up its exposure to group companies.
Tata Power increased
its fund-based exposure to the Tata group by Rs 700 crore
in 2001-02, besides giving guarantees of Rs 1,000 crore
to Panatone Finvest and Tata Teleservices, said the agency.
As on date, Tata Powers exposure to the telecom
sector, through Tata Teleservices and Panatone Finvest,
is Rs 2,500 crore.
Tata Power has
a licence to generate and supply power to bulk consumers
in the Mumbai metropolitan area. The utility also supplies
power to Tata Steel and Associated Cement Companies from
captive power plants, besides selling power to Karnataka
Power Transmission Corporation from its 81mw Belgaum project.
part of its plans to diversify businesses outside Mumbai,
Tata Power has just taken over one of the distribution
companies of the Delhi Vidyut Board and is in the process
of signing a deal with Power Grid to build a 400kv transmission
line from Bhutan to Delhi, added the release.