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Adani Transmission Q3 net rises 33% year-on-year to Rs 204 crore

FE Bureau

Adani Transmission on Thursday reported a 32.5% y-o-y increase in consolidated net profit to Rs 204 crore in the October-December quarter of 2019 on sharp increase in operating margins. Operating margins for the December quarter rose 1,069 basis points on year to 43.31% as overall expenses fell. The overall expenses were lower by 6.7% y-o-y at Rs 2,477.75 crore as the cost of power purchased for the third quarter fell 21.29% y-o-y to Rs 667.67 crore, and the cost of fuel consumed fell 17% y-o-y to Rs 233 crore. Revenue from operations rose 3% y-o-y to Rs 2,572 crore on higher revenue contribution from the transmission business, even as the revenue from distribution business fell marginally 1% during the quarter. Adani Transmission's operating profit for the December quarter was higher by 37% y-o-y at Rs 1,114 crore.

Anil Sardana, MD and CEO of Adani Transmission, told reporters in a media conference call that they have taken approval from the regulator to buy 700 MW of hybrid wind and solar power matching the load requirement of Mumbai at a very competitive price. "This will help us to reduce the cost of power going ahead and reduce the tariff for consumers under the multi-year tariff regime that we have proposed for Mumbai."

Regarding the optimisation of cost of borrowing and debt refinance plan, Sardana said Adani Transmission concluded a significant Capital Management Plan of $2.6 billion for Adani Transmission Group on Wednesday, where $1 billion was kept aside for Adani Electricity Mumbai.

"We expect a 100-150 basis points savings on interest mostly in the next financial year. The impact in FY20 is expected to be marginal as the year is almost over. The capital management plan has been done for the current operational assets. Now only the under construction assets, once they become operational will be taken under the capital management plan for optimising the cost of funding," Sardana said. Adani Transmission's gross debt as of December 31, 2019, stood at Rs 18,000 crore.

The company has a capital expenditure plan of Rs 4,500 crore to be spent over the next couple of years on the under-construction projects in the distribution and transmission businesses. Distribution business will entail an investment of Rs 1,500 crore, while the transmission business will see an investment of Rs 3,000 crore.

On Thursday, the company also completed the stake sale of 25.1% in the Adani Electricity Mumbai to Qatar Investment Authority for Rs 3,220 crore, which includes an equity consideration of around Rs 1,210 crore and a shareholder subordinated debt of Rs 2,010 crore, the company said.