JSW expects FY13 average merchant rates at Rs 4.35/unit

JSW Energy reported a sharp fall in its first quarter results reporting profits of Rs Rs 3.41 crore against Rs 225.32 crore, year-on-year due to a forex loss of Rs 232 crore. But, the company's sales grew significantly by 76% to Rs 2155.6 crore.

In an interview with CNBC-TV18, NK Jain, Vice Chairman of JSW Energy said merchant prices have been quite good in the quarter ending June and was responsible for the overall profitability of the company. He also expects the merchant prices to be above Rs 4.25-4.35 for the year.
 
Here is the edited transcript of the interview on CNBC-TV18. Q: How much of your result uptick is because of higher merchant prices during the quarter gone by?
A: Merchant prices have been quite good in this quarter and our overall profitability has improved because we have received good merchant trade. This quarter we have a profit before tax of about Rs 247 crore. This is quite healthy and barring the rupee-dollar parity fluctuations this quarter, it has gone well. Q: What were merchant prices like on an average in April-June quarter and how are they holding up in July?
A: In July-August-September also and for the whole year, we are expecting our merchant prices to be above Rs 4.25-4.35 for the year.
_PAGEBREAK_ Q: What was it on an average for April to June?
A: April to June merchant prices is Rs 4.35 paise, but of course with the power purchase agreement (PPA) prices of Barmer our average realization has gone down because it is not yet fully finalized by the regulator. Q: What is going on with the dispute that you have with Maharashtra State Electricity Distribution Company in terms of the Ratnagiri project?
A: It's only for one unit of 300 MW. There are no other disputes for the remaining three units. In one unit a fuel related dispute remains and that is in the appellate now. Q: When are you likely to receive the tariff order clearance for Barmer?
A: Right now it is the ad hoc tariff that the regulator has given and initially the regulator always gives ad hoc tariff. Only after the project is fully completed and the final project cost is determined, the regulator gives the final tariff. We are expecting the final tariff to come by the end of this year. Q: What were coal prices like in the quarter gone by and have you been able to strike any new short-term contracts for coal?
A: No. In fact the coal prices have already gone down substantially though we had a lot of stocks at the end of March. Due to this the full impact of the reduction in coal prices has not yet come in this quarter. But in July-August-September, the coal prices are already down. For example, right now the African coal is about USD 85 free-on-board (FOB).