Tata Power Company Ltd
NSE:TATAPOWER
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Tata Power Company Ltd
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Ladies and gentlemen, good day, and welcome to the Tata Power Q2 FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Today, we have Tata Power management team on the call with us. I now hand the conference over to Dr. Praveer Sinha, CEO and MD of Tata Power. Thank you, and over to you, Dr. Sinha.
Thank you very much, and good evening to everyone, and thanks for joining for the Q2 analyst call. On behalf of Tata Power, I would like to wish all of you a very happy Diwali and also my best wishes for the festive season. Today in the call, I am joined by my colleagues, Sanjeev Churiwala, CFO; Jinendra Patil, Financial Controller; Kasturi Soundararajan, Company Investor Relations and a few other colleagues from my finance team.
Let me, first of all, start with giving you some background about the consumption of power in the country. What we have seen in the last 6 months is that there has been a huge increase in the requirement of power. The peak power went and touched something like 270 to 290 gigawatts. And also in terms of energy, the increase has been nearly 12% in the last 6 months. Of course, in the last quarter, the demand was a little subdued because of extended monsoon, which actually went right up through September and even in October.
This also was a period when we saw that during the month of especially April and May, there was a shortage of food and during that period, the peak prices of power went up in the exchange. Since then, there have been much lower peak prices. And also, there is a capping of peak price that has been done by the regulator.
During this period, Tata Power has done exceedingly well. In the last quarter, our PAT has grown. And also our revenue has grown and EBITDA has grown. In this quarter, our PAT has grown by nearly 49% -- sorry, by 85% from INR 506 crores last year to INR 935 crores. Revenue has grown by 49% from INR 9,502 crores to INR 14,163 crores. EBITDA has grown by 18% from INR 1,732 crores to INR 2,043. If we look at the H1 data also, we find that in our -- in H1 also, like the quarter, the PAT has grown by 87% from INR 971 crores to INR 1,890 crores. The revenue has grown by 49% from INR 19,076 crores to INR 28,939 crores, and the EBITDA has grown by 1% from INR 4,097 crores to INR 4,150 crores.
This growth has been on back of excellent performance by all our businesses, our existing generation business, hydro business, coal business, all of them have done very well. Our coal mines have also done exceedingly well on back of high prices, of course.
Mundra, we have been able to operate the plant under Section 11 and the interim order of the regulator has ensured that we get the full fixed cost and also states who were not scheduling the power help to pay the fixed cost as we had shown the ability of the plant. And now we are, of course, expecting the order on the full pass-through of coal coast, which will give us a further improvement in our performance in the subsequent quarters.
We have also seen all our other businesses are doing very well. Our renewable capacity is [ today BEG ] is something like 5,660 megawatts on back of the 850 megawatts of projects that we won in the last quarter. This includes 3,870 megawatt of operating plants and another 1,790 megawatts of projects, which are under different stages of implementation. We expect that in the coming years, with the type of increases improvements that we have seen in our hit rate in winning projects, we will be able to add a large quantity of such big projects in different parts of the country. And these will not only be just pure solar or pure wind, but will be hybrid projects also. We also won projects through the -- under the EPC, where we won projects of 125 megawatts from NHDC and [Technical Difficulty] [ 100 megawatts ] from SJVN. And we implemented during this period, 625 megawatts of third-party projects also. We have a very [ healthy ] order book of nearly 3,800 megawatts with a value of nearly INR 15,000 crores.
Our 4 gigawatt manufacturing facility is going well. [ The ] work has started at site and [ parking ] of many different subsidiaries and we expect the rollout of the first of the module from the plan by next year, July-August [ and the first of the 10 by next year ] December. So that will help us in meeting our future requirement of sales and volumes for our projects and also for the EPC projects [ and installed ] projects.
In the rooftop business, the commission 138 megawatts of capacity in [ ESPN ] and we also won 330 megawatt of orders [ worth 13233 crores ]. In this are present in more than 265 districts of the country has happened and more than 100 cities. And we expect that with our present order book of nearly 400 megawatts with a value of maybe INR 1,500 [ to grow ] we'll be able to grow this business a little more time than what we have done in the previous year and quarters.
We already have a cumulative rooftop portfolio of about 1,150 megawatts and this keeps on incrementing every month and every quarter. In the solar pump business, we installed nearly 6,000 tonnes in Q2, taking our total installation to 17,000 tonnes. And we expect that with more than 80,000 pumps across India, we have a major presence in most of the states in the country.
On the e-mobility, we added 722 public chargers, and we have now more than 3,000 public chargers in different parts of the country, including highways. And we have nearly 23,000 home chargers. Apart from this, we have about 240 bus chargers in different cities in the country.
The transmission and distribution continues to be very steady and has been growing at a very fast pace. During the quarter, we took over the South-East UP Power Transmission Company, the isolate company to the [ reserving ] platform. And also the work on the [ inaritit atitix ] transmission project has started. And we expect that we will be able to complete all these projects in the next 6 months to 12 months process in these locations.
Also, we have been able to push our smart meter initiative and we have nearly 4 lakh smart meters installed in [ Reni ], Mumbai and in different parts of [ Odisha ]. And we expect that soon we'll be able to cover the [ connecting ] all our customers in these places.
Our distribution business in [ Odisha ], which [ mechico ] progressively in the last 2 years have done exceedingly well. We have been able to not only reduce the [ contingency ] losses to a very large extent, but have been able to also improve the reliability and customer connect and excellent service engines provided to our customers. Many of the legacy issues over there have been sorted out. There is nearly 20 lakh meters that we replaced which were not working and [ ordered ] the legacy meters, the electromechanical meter. And that has been [ partial ] improving the billing efficiency and also given the current consumption that is being done by the consumer.
And the result of that will start coming in the subsequent quarters.
Moving to our balance sheet. We have been able to ensure that our net debt continues to be less than [ 40,000 per individual or 8,000 odd crores ] And this is in spite of the fact that we have done more than INR 3,000 crores of capital investment in this year. Our working capital also has improved because of better collections in all our businesses including our renewal business, and we have started getting revenue from some of the states, which where we have delayed the payment.
And we do expect that all the old outstanding will get liquidated in the next few quarters. Our net debt to underlying EBITDA has improved from 3.6 in last quarter to 3.5 in this quarter. Similarly, our net debt to equity has also improved from 1.55 to 1.32. And we expect that going forward, we'll be able to maintain at these levels, notwithstanding the fact that there's a large amount of CapEx that has been planned in our usual transmission and distribution business.
As I have been mentioning earlier, as far as we continuously moving towards a long-term aspiration and the 12th consecutive quarter of good performance shows that a huge amount of foundational changes have happened, which is ensuring that the sustained performance and results are being provided. And I think that the direction of change that we have seen will help us to further improve in the coming quarters. So we have, of course, shared with you the detailed depth of our quarterly results, and I now look forward to have your questions and the floor is now open for Q&A.
[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.
Congratulations on a good set of numbers. So my first question is on the Mundra short term arrangement. Is it being extended post 31st October 2022? Have you heard anything from the government? And secondly, are you booking the tariff completely on cost plus for the quarter? Or is there something which will still be pursued at CRC?
So thank you, Mohit. First of all, the existing arrangement has been extended up to 31st of December. And it is not sure that anything gets further extended, but the supply under Section 11 continues. And continues to 31st of December.
Secondly, right now, we have booked the [ liga ] tariff based on what the Ministry of Power has given as an interim target. The difference between the interim and the actual value, that is to be decided by CRC. As we had shared with you earlier, under Section 11, any generation has to be on a cost-plus basis. That means actual costs that you have incurred will be paid to you. And that was the principle on which even the interim order of CRC came whereby they gave us the full charge for capacity, which is 90% loan reduction was allowed. And also states which were not contributing power, they had to pay because we will [ share in the liability ]. So the Section 11 principle is very well laid out. And we expect that once the final order comes, full pass-through of coal will be relayed to us.
Understood, sir. Secondly, sir, what is the status of Mundra long-term draft supplementary power purchase agreement, where are we right now? And when do you think we will resolve this entire thing?
So since the existing arrangement is going on, Gujarat government has been going a little slow on finalizing the Mundra arrangement. So let's wait and watch if the existing arrangement continues and this provides us the opportunity to do the supply of power on cost-plus basis. Or if that does not get extended, then of course the Gujarat government would come forward and finalize an arrangement which is acceptable to both sides.
So I think for the present, we will continue with the existing arrangement. And if there is something that is required, we will discuss and [ choose how we buy ].
The next question is from the line of Swarnim Maheshwari from Edelweiss.
Sir, my first question is, during the quarter, in Mundra, was there any reversal of excessive provision, because posted tariff orders which get -- actually, which got fixed from first of May. Before that, for about 30, 35 days, you were outside the Section 11. So post this tariff order, is there any excess provision that has been reversed during the quarter?
What had happened when the fifth main notification came, it talked about that the fixed cost of the capacity charge will be paid as per the PPO or if there's any agreement. Since there was no agreement but notwithstanding that, Gujarat was only paying access 70% not the full amount, because they were considering that the interim arrangement that we were trying to sort it out with them, the rebate will be given.
But the interim order of CRC mentioned that full fixed cost or capacity charges would be given. So that reversal has happened in the quarter. But other than that, we have not done any other.
Yes. Sir, what is that amount, sir? If you can quantify, please?
[ So it's a INR 20 per unit ]. So whatever we had supplied [ to Gujarat ] and Maharashtra [ and that has been.] And to the other states, they have to pay the INR 46 crores, even if they are not [ chuting ] the power.
And if you see the most of accounts where the [ mechuling ] specified the [ micup ] amount, including [ amount within ] previous period. In the total amount that we have been able to recognize [ and so 21 crores ] and out of that [ and in fill of ] the previous quarter.
Sir, my second question was on the receivable side. So you did mention we expect to see some sort of liquidation in the ensuing quarters, but this is for the second consecutive quarter, we have seen that the receivables have been a bit elevated. So any specific reasons? I understand this is from the likes of [ wesyne ] and Mundra. But any specific thing that you would want to highlight that, is it some sort of a tricky issue from there?
Can I answer that?
Yes.
So I think a couple of things. As you said [ it collected is right ], given that the [ rental ] cost has gone up and to the extent the revenues are high, the receivables would also be high. But that isn't due to the quality of our [ revo isit ]. In fact, the overall quality has gone up.
In terms of our receivable days, yes, absolutely [ they are good ] The good part is many of our receivables that we've been discussing in the past, for example, [ arlipether ] and other [ key ] players. They have now started paying work in installment, including all the disputed amount. So you would see quite a good liquidation happening in the second quarter [ are inin ].
Similarly, in Mumbai, where there were delay in payment, now there [ is a gain ] and you'll see that the liquidation is happening in the subsequent 3 to 4 months. So I think the overall receivables is [ capped to be ] concerned and for the plan.
[Operator Instructions] The next question is from the line of Sumit Kishore from Axis Capital. Hello, Mr. Sumit Kishore? Are you able to hear us? Sir, there is no response from the line. [Operator Instructions] The next question is from the line of Dhruv Muchhal from HDFC.
Sir, you mentioned that there is a gap between the interim tariff and the finance orders based on the fuel fee cost pass-through mechanism on the Section 11. Possible to share what the gap is, but please help us understand the potential benefit that is likely to accrue.
Right now, it is premature. We'll share with you because in the time the final order of CRT comes. We do not know exactly what we ultimately get approved by them. So let's wait for their orders. We expect that order to come in November, and then we'll be able to work out the effect on financial.
And to add some more to that, I think our apologies, again, there was a lot of discussion in quarter 1 that in our investor deck, we're not doing the separate breakup of our full profit and [ other ] profit. And we can mention over there the [ kind that was in ] certain discussions, which is under progress both at the TRC level and as [ under the original agreement ] and we might want to add that on our dispute that putting us [ a mand ].
The good part is as we had mentioned last time that we will see some product happening in quarter 2, which has not happened, the amount of [ INR 460 crores ] as we mentioned. We are kind of also expecting that depending about the kind of order we get, [ a lot of good detail ] around [ ships ] coming other line positively in quarter 3. But at this moment, [ we don't cannot say ].
Mr. [ Amand ], does that answer your question?
[ do not answer question ]
The next question is from the line of Abhineet Anand from Emkay Global.
On the solar EPC side, the order book is quite healthy, which is [ why ] I just wanted to understand in the last few months or maybe in the last 2 quarters, have you seen an increased competition? We saw a number of contracts that Tata Power [ won their deals from ]. State PSUs like NTPC, SJVN and all. Recently, we saw 1 of your competitors seeking a large project in excess of INR 2,000 crores. And they have now a backing of large corporates. So any increased competition that you see in the space?
I think the players are the same. Only thing is what we are seeing is that the bids are coming at a much higher rate, unlike earlier when it went up to [ INR 1.99 and INR 2 ] They are now all in the range of [ INR 2.50 to INR 3 ] , depending on the location of the plant and because the land is being given a sort of profile of the generation that is required.
So I think there is much more seriousness and credibility that is coming in the bidding process rather than many who are coming and bidding a number which [ they are finding it a bit rich ].
Okay. Secondly, I understand that obviously Mundra, is it possible to give some ballpark number what has been the performance of Mundra for either [ one is of the 2 ]?
We're not giving a separate breakup here. I think it's kind of all merged in the overall generation business. But as I mentioned earlier, definitely [ the ra is ] kind of partly covered because of the target product that we received. The [ INR 452 crores ] program that we did. And of course, the difference between what has been allowed at the tariff and [ what is outside the tariff we'll see what we have been ]. So once we get [ ability ] on that, we'll have a better understanding on the [ Mundra for ] the coal mines. [ For us, both of them are coming to 1 because they go together ].
Okay. And just assuming that Sinar told that this arrangement [ is stay ] Q2. And your long-term arrangement that you are talking about still takes some time. I mean, what's the larger picture, I mean on some picture that you can understand on [ Mundra when ]?
What we need to understand is that even with the present pass-through cost, we are still very competitive in [ drasa ] And so they will definitely like to see new power from this plant compared to many others who are at a much higher price.
Secondly, once the principles are being laid in the CRC order and all that. So hopefully, around that only the final discussion and negotiation will take place. It will not be on a principle which will be very different than what is decided by CRC. So that's what is our expectation.
And broadly, the principle is near about the cost pass-through, right?
Yes, absolutely right.
The next question is from the line of Sumit Kishore from Axis Capital.
My first question is that net cash flow from operating activities at consolidated level has reduced from INR 2,412 crores in H1 FY '22 to INR 2,138 crores in H1 FY '23, if I look at the BSE filing. What qualitatively explains the decline in the net cash flow from operating activities even [ if counting the ] performance?
Are you talking about the cash flow from operating activities?
Yes.
At the consolidated level, H1 FY '23 compared with H1 FY '22.
If you look at the particular sheet, which is a complete 1 page as a complete [ rate analysis ] and there are items which are moving up and down, but we have by and large from [ INR 2,415 '21 almost INR 2,200 crores ]. This side of the business, there will be small items going up here and there, but we don't see any significant change in the trend.
Right. I mean so we asked this question, I see a lot of moving parts. It's difficult to decide, sir, because there are regulatory different account assets all swinging. But obviously, the P&L growth has been quite strong in the first half of the year, thanks to the elevated coal price, among other factors. But somehow, the working capital seems to have gone up in [ the interim ].
Yes. So as I said earlier, working capital, if you see it's important to link it with the growth in the revenue because various locations will have credit [ pay in ] and to that extent, our higher revenue leads to higher [ paid ] receivables, which are kind of all good and not [ only ] in [ defend ]. So I think there will be a higher working capital linked to a higher revenue. But in terms of the overall aging of our debtor that our DSO, those are all booking companies.
My second question is in relation to Slide 18 of the presentation where again, Q2 FY '23 EBITDA before elimination has gone up sequentially from quarter 1. It's gone up [ INR 2,322 ] crores from [ INR 2,798 ] crores. However, [ initial ] have increased quite sharply, almost [ INR 1,229 crores in Q2 was INR 691 crores ] in Q1. So when we look at a segment-wise analysis to try to understand the performance. This elimination increase is simply too high, and that is driving a reduction in EBITDA on a sequential basis. So what explains such a sharp eliminations?
Yes. This is basically on a consolidated basis, we have the dividend which will get eliminated within the 2 companies, right? So -- and that also reflects that they have received higher dividends. And to the extent that litigation is [ off purely ] on account of dividends.
Okay. So that [ specifically ] a reflection of the higher dividends received in the coal mine?
Yes, you're right.
And finally, on [ Mundra ], following the Section 11, what is the under-recovery basis -- current that you have charged so far. So what is it that you're expecting [ to make or do on the cost objective then ]?
I think this is [ fine you are asking the ] second question. Given that we are already with CRC the hearing has happened and the expected outcome very soon. I think it's better to wait for a couple of months so that we can give you a very precise answer.
Sure. Last question is on the solar EPC revenue and margins. So for both [ utilities or PC ] and solar pumps, the revenue seems to have come off a fair bit year-on-year. Margins in Q2 have gone up sharply on a sequential basis. If you could [ represent mos of ] the -- what explains this [ predicament ].
Yes. I think the observation is absolutely correct. And I think this goes back to the quarter 1 conversation where around the [ CERC ] we had a negative PAT margin. We kind of went back to the grind both to see how that is best to claw back our profits. So a couple of things that we have done is, a, some of the projects which were kind of dragging down our profitability with [ agreed ] with the parties and the vendors to kind of defer those projects and to take the benefit of the [ revision stated on the prices ] as well as the [ coal as they were ] there, the steel side also came down to [ 25% ]. So that is one.
And because some of the projects were deferred, we were able to reestimate the cost of completion, which is reflected in a write-back of some of those positions that we are making. I think the better way to look at it is look at the H1 EPC margin in totality, which is kind of close to [ 40% ] I would [ really ] like to have a higher PAT margin going forward, but at least the situation has improved from [ that in quarter 1 ]
The next question is from the line of [ Ton Den Yer End ] from JPMorgan.
A couple of questions. Firstly, on Mundra plant. So just trying to understand if you -- I mean you was referring to a bit of slowdown on the part of [ cost part of one ] resolution. Has it got something to do with subzero demand in government in the second quarter? Or how should we look at it?
[ Subzero demand was that the demand was not use it ], in fact, that we have been operating 3 plants exclusively for Gujarat during this period. The demand has been very much there. And this is 1 of the big suppliers. In fact, in terms of single plant, it is the largest supplier of power to Bihar. And going forward also, our confidence is that those this Section 11 is only up to 31st December. They will continue to have a similar requirement in next year also and in the summer period and all. So we will definitely come to some arrangement and this month, we continue to supply and be 1 of the main suppliers of power in the coming years.
Okay. Sir, other than Gujarat, are there any other states that are also asking for [ post ] cost, there was some media article quoting that Rajasthan was also looking to tap from Mundra plant. So just trying to understand that part.
So apart from [ Mundra ], Maharashtra continues to take power and also for a certain period of time, [ Rajasthan ] has taken. So 3 states have been regularly procuring power from [ Muwara ].
Understood. And sir, I think you explained it in previous quarter, but just trying to understand better. So can you help us understand what is the way the accounts are being booked? I mean, the tariffs are being booked at the moment from Mundra plant?
So right now, we have booked based on the full capacity charge and also whatever is the modified internal tariff side, Ministry of Power. So every 2 weeks they come up with the notification of the -- based on the cost of the [ IC IGD cost of coal ]. And -- but the final cost of coal will be whatever is the actual cost of coal that we have incurred for operating the plant.
Understood. Just clarifying on that second part, sir. So as mentioned, there is no [ underreported ] on the fixed cost part or on the variable cost. Is my understanding correct?
So on fixed there is no difference. On the variable, there is a difference right now on the -- whatever is the interim notified price and the actual price. That different calculations have been given to CERC. That data different whatever is there. And once CERC modifies it, we will [ count ].
Okay. Got it. And secondly, bookkeeping, sir, what is the dividend amount from the subsidiaries to [ plerin ] to first half [ in that right there ]?
[ About 102 crores ].
So INR 102 crores.
Yeah.
This is for first half?
That is for quarter 2 and [ 1800 each quarter -- for quarter 2 and after together ].
The next question is from the line of Aniket Mittal from SBI Mutual Fund.
Two questions. If only on the EPC front, in Slide 9 of the presentation, you've mentioned that there has been some plant rescheduling of large projects on the PC. So if you could elaborate on that, and which are these large projects that have gotten rescheduled?
I think this is [ probably for ] a one-on-one conversation with the reduced parties. But I think it's suffice to say that some of the large projects have been rescheduled. And of course, with the consent of the parties. To that extent that parties realizes that the current limited prices for certain modules will not be possible for many players or [ to give the players some time ] And hence reschedule [ the to a lead ].
So if I were to look at your current order book [ of on these 15 common close ] how do you look at it from an execution time line perspective? If you could give some color on that.
Execution normally for [ 4 on 4 it takes the third parties where allows ] Normally a some 4 months to [ 18 ] months. But depending upon the kind of project by doing the tenant, the period can differ. But on an average, you can presume about roughly [ 18 ] months.
Let me try to understand if there are any delays or projects that have [ gotten some delay ]
This is planned preceding that I was talking about.
Okay. Okay. The other question is when I look at the numbers for [ PRP ] there seems to be a very large swing on a Y-o-Y basis sitting against the profit of INR 210 crores last year, that being a loss of INR 29 crores reported this year. So what's the reason for that?
There was a onetime foreign exchange gain which was booked last year.
It's turning to a loss [ this year looking at the cores ]
Are you referring to Slide #19 of the deck?
Yes, Slide #19.
You're looking at [ the PERT ] shipping company, right?
Look at Slide 18, [ find all ] the numbers for Q2. So against INR 317 crores of profit last year [ some net numbers 17 crores ].
Yes. So we have booked a INR 200 crores of product gains last year for the same period.
Yes. That was for sale of shipping that was done since that money was at that time pass and roughly when we brought it over here, we booked it at [ 214 crores ] ForEx.
Just a related sort of question on the EPC front. So when I look at the renewable capacity that we have under development, which is, I think, 1.8 gigawatts, the commission time line, could you help me on that in terms of ...
[ So for our target ] the next 12 to 18 months. So our target is that by March '24, most of all of them will take commissions [ price be tied ].
Okay. How much do you plan to do in FY '23? And how much in FY '24?
We can share the details. I don't have it right now. We can give you...
Ballpark for the first H1, we have commissioned [ 450 megawatt ]
That is our own [ internal deed ].
On the total that will say [ just the deed ] .
Okay. And just one last question on [ Mundra ]. I understand you can't talk about the difference or the under recovery. Could you help me with the average tariff that you realized from Mundra for 2Q [ in manage ] that you've actually booked in your numbers?
It's about [ INR 550 crores, INR 570 crores ] right around that. But the notified tariffs have been [ degreed ] since between [ INR 620 crores ] [ there far kilo ] So that's the difference.
So we booked around INR 550 crores to INR 570 crores.
Yes.
And this is for Q2, or this is for 1H?
2Q, because it started 1H [ but only part of 1H ].
So 550 for 1H.
No, no not 550 for 1H. You are making up numbers. This whole notification came from [ fifth one ], it is not 1H, it is only part of 1H.
Okay. If you can give me a breakup because it's bit complicated now and it's better to wait for the company clarity to emerge. I'm very sure for the next quarter call we'll have a complete idea as to exact recovery [ and not depend on we're all gaming ].
The next question is from the line of Apoorva Bahadur from Investec.
Congratulations on the good set of numbers. So you spoke on this provision write-back for the solar EPC business. Can you please share the quantum how much did we write back into solar?
We'll be able to [ save you the fit lose it from there and be to pick that there losing the impact on some of the various things. So it would be difficult to just verify 1 number and give it to you. ] I think as I said in the previous question that we -- depending on the time of completion and towards when the project is getting completed, we do accrue a cost to completion. And commonly on a conservative basis, we try and make more provisions to be on the safer side. So given that some of the projects have been rescheduled now and the cost of sales models see have started coming down, we have done a revaluation of the cost to completion and find that we are able to claw back some of these provisions.
Okay. Sir, secondly, on your -- the overall green company portfolio, right, the profitability has been lower year-on-year. Now I understand that some part of it would be because of final depreciation and rising interest costs. The EBITDA margins also appear to be, especially for [ TPREL ]. So can you share the breakup between this operational and the client profitability due to operational issues and also the impact of [ INI ] depreciation and interest costs on the [ rebi ] portfolio?
So we'll share if you see [ the rpufr ] H1 the EBITDA has actually gone up. And so it also depends on what sort of wind speed and what sort of solar intensity is there. So in the first quarter, we had very good wind speed and a better solar intensity. In the second quarter, because of the extended monsoon, the solar generation was there. But the details we can share with you. We can give you that how much the [ trend change helping ].
Okay, sir. That would be very helpful. Sir, also, just wanted to check, in this quarter, this [ western ] discount number appear quite strong. So is there any one-off or incentives that were booked in the quarter?
No, we have not booked any incentives. The performance has improved, and we -- I mentioned to you, our AT&C loss has reduced. Our billing efficiency has improved, our collection efficiency has improved. I think it's a general performance of the business [ that has added to ] and better billing and better being able to show much better performance in the future quarters.
Sir, I understand that just -- I mean specific to Western discom because that appears a bit better than the other discoms in terms of [ core difference ] around the same time. So I think [ there's a different core there?
So Western DISCOM has more of industrial consumers. So [ EHD and SC ] consumers are very high over there, and that's why it has been much higher [ indeed ] in consumption compared to others.
Okay. Got it. So just 1 last question, if I may, and I'm sorry for harping on again with Mundra. But just for sake of clarity, while we notified tariff is around [ INR 620 now ] we are booking around [ 550 ] since notification came, and this [ 620 ] is a former possibility for further upside, which CRP comes up with a favorable order. Is my understanding correct?
No, your understanding is wrong. And I've mentioned to you that they notify the tariff every 15 days. And the tariff has changed because the price of ICI index coal has changed. It started from [ INR 620 crores ] , it went down to [ INR 470 crores ] and now it's gone to [ 590 ]. So it keeps on changing every 2 weeks. But when you get the coal, you get coal over a period of time and based on the actual cost of coal you are going to bill them. So that is the data difference that will happen. And since our timely order of CRC does not come out, it would be speculative to give you a number and take that [ specific number ].
Okay. So sir, the average notified tariff would be around [ 550 parsas ].
No. That's what I'm saying. We don't get into averages, and there is a different price on every 15 days basis they are giving. You should then see the 15 notifications that have done. One that I will send it to you.
Yes, sir, that will be very helpful.
Otherwise, it stays on the CERC, we are on the ministry of power website also, you can see.
The next question is from the line of Dhruv Muchhal from HDFC Mutual Fund.
Sorry, I got disconnected earlier. Some of the questions have been answered since. So just one question on the RSA discom. We see the performance is improving. We understand the circle developing but we also see -- we also notice that the regulatory assets are increasing. So should we understand this primarily because of the fuel cost? Or is there some other element to this?
So the regulatory asset adjustment takes place on an annual basis. So it's a question of timing of some of the regulatory assets, which is there, which will get adjusted as of the end of the year. So it has nothing to do with the fuel costs and all that because there is 1 single tariff that is a charge there by the generating company.
And we also charge 1 single tariff on the [ PCP ] So this is just because of whether it is the O&M cost or it is on -- in efficiency and things like that. So at the end of the year, that's 2 [ of take place ], and you will get see that number whether there is an increase or decrease. And depending upon that, the tariff fixation takes place for the next year.
Got it. All right. And sir, the second, just a follow-up on 1 of the earlier questions on the shipping company. We understand the delta movement because of the FX, but we wanted to understand what's driving the loss in the current quarter. And probably also in the first half, the profitability is a bit lower because you understand that we used to understand that this was a leasing arrangement where the profitability was largely assured. So just trying to understand what's driving the loss.
So again, the billing that we are doing on shipping is based on the CRC index. Now once we get the actual cost of shipping that is there, then we'll be able to decide on it, whether that needs to be reversed.
The next question is from the line of Ajay Mehta from Wipro Limited.
So my first question, sir, to you is that considering the environment when interest rates are rising, so what is Tata Power's plan on reducing the debt because that is still at [ a cumulative ] level, right? Even though Y-o-Y has come down, but still the average debt cost has gone from 6-odd percent to 7-odd percentage, right? So what is the plan to reduce the debt going forward?
No, I think when you look at the overall net debt of the company, in spite of all the CapEx that we have done and as incremental working capital because of higher revenues, our total net debt is still below INR 40,000 crores. That is important to look at it from a perspective of the leveraging. Some net debt are subject to provision and our leveraging well below a sub 5. Our targeted leveraging was 1.5 and as of now we're standing at 1.2 right now as we speak.
Our interest level, yes, we are kind of around 7% if you look at the current quarter. And as we looked at a year back, it was around 6.56%. So we have seen about a 40 bps increase, but that is against almost 190 bps increase in the [ base rate ] So I think we have been able to manage our interest rate quite well, including some of the international borrowings that we have done, including a recent 320 million borrowing for our sustainability-linked loans. Together, we've been able to kind of contain our overall cost of debt quite well.
Okay. Okay. And my second question is, I just saw a notice that there was a cyber attack, right, even though there's no impact to the financials, and I believe you guys have taken the reports also. So is there any action still pending to be done to offsetting whatever would have an impact on Q3 numbers due to the cyber attack?
No, there's no impact on the financials. Very clearly the financials, the [ facts have been divulged ], everything is well protected. It is not having an impact, we did not have any financial loss as well. Our operations and collections was as usual for us. So yes, we don't see anything happening [ inside of here ] as well.
Okay. And sir, my last question is what is Tata Power using with the personal EV charging, right? I know it does increasing your footprint quarter-over-quarter increase in the number of cities being added, number of clients being added, right, number of apartments, connectivity is improving. So what is like the path going forward from a next year perspective in terms of the growth that you see in the segment?
So our objective is that we need to provide a seamless experience to the customer. And when we say asset, if you add how we work on the deal in your home you should add a home charger, which we should be able to provide. If you are traveling intracity, then whatever charger you need to carry out. You should have seen the big figures over there. But for public transportation, the bus charging infrastructure.
Now as far as the home charger and the bus charging is there, that is on a cost-plus basis that we do. As far as the public charger is there, it is on a fee or a subscription model, which is there. The consumption of that or the utilization of public chargers is much less today because most of the people still continue to use their home chargers. Also, the penetration of electric vehicle has not happened to that extent. So we are creating an infrastructure for that over the next 2, 3 years when the penetration of electric vehicle. Utilization of these chargers should increase from the present about 2% to about 15% by when it will be able to sustain its operation.
[Operator Instructions] The next question is from the line of [ Suri Baram ] from Spark Capital.
Yes. [ Suri Baram ] from Spark Capital. Sir, what is your view on the international coal prices over the next, say, 2 quarters? And what would be your rationale for that?
Still as globally the coal prices have been very high. And we do not expect that it will reduce at least for next 12 months. So we expect that the coal prices will remain high. Now whether it will be at the present level or little lower than this, I cannot predict that. But yes, the coal will be in demand, especially imported coal will be in demand considering the global need for energy [ such as use ].
Sure. Could you share the [ formula ] realization per tonne in the gross profit per tonne for the KPC mines for the second quarter?
We don't [ usually ] sell off coal over the years. So that details we can give you from the PPT [ folks ], we don't have that as we can share with you.
As there are no further questions, I would now like to hand the conference over to Dr. Praveer Sinha for closing comments.
Thank you, [ Gideon ] and thank you to everyone for joining in the call. And in case you have any further queries, any other details that you would require, please connect with the custody and [ validation ] and they will be more than happy to furnish you with it. Once again, season's greetings and all the best [ for Rashashi ].
Thank you. On behalf of Tata Power, that concludes this conference. Thank you for joining us. You may now disconnect your lines.