The net profit of Power Grid Corporation of India declined 17 per cent during the first quarter (April to June) of FY21, due to extraordinary provisioning towards discoms.
PGCIL reported a net profit (classified as “total comprehensive income”) of Rs.1,986.50 crore for the quarter ending June 30, 2020, which was nearly 18 per cent than the corresponding level of Rs.2,424.52 crore in FY20.
This drop in profit, despite a 2.9 per cent growth in revenue (Rs.8,988.72 crore in Q1FY21 from Rs.8,804.11 crore in Q1FY20) came about largely due to the provision of Rs.1,075 crore that it made towards power distribution companies/power departments of states and Union territories.
It may be recalled that in June 2020, PGCIL gave a consolidated one-time rebate of Rs.1,075 crore to power utilities for passing on to end-consumers in the wake of the COVID-19 pandemic, against the billing of the months of April and May 2020. (read more)
“Due to said consolidated one-time rebate, there is a reduction in the profit for the current quarter,” PGCIL said, adding that “the company will continue to monitor any material changes to future economic conditions.”
It may be mentioned that “power transmission” falls under the category of “Essential Services” and is exempted from the lockdown.
Total revenue from power transmission rose 4.6 per cent to Rs.9045.01 crore in Q1FY21 from Rs.8651.21 crore in Q1FY20. However, income from other operations like consultancy and telecom showed a decline in Q1FY21 when compared to the corresponding levels of FY20.
New CFO takes over
In an independent development, PGCIL announced that its company board approved the appointment of M. Taj Mukarrum as the company’s Chief Financial Officer (CFO), effective August 1, 2020. Mukarrum took over from K.S.R. Murty who superannuated the post of Executive Director & CFO of PGCIL on July 31, 2020.
(Featured photograph for representation only)
