Reliance Power Limited , a key player in India's private power generation sector, has reported a profit after tax of Rs 87.00 crore for the quarter ended September 30, marking a significant turnaround from a loss of Rs 352.00 crore in the same period last year. This represents a 125% year-on-year improvement in the company's bottom line.

Financial Highlights

• Total income rose to Rs 2,067.00 crore from Rs 1,963.00 crore in the corresponding quarter of the previous year.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 64% to Rs 618.00 crore from Rs 376.00 crore.

Operational Performance

Reliance Power operates a total power generation capacity of 5,305 megawatts, which includes the 3,960 megawatt Sasan Power plant.

Balance Sheet and Debt Position

• Net Worth: Rs 16,516.00 crore
• Debt to Equity Ratio: 0.87, which the company claims is among the lowest in the industry
• The company completed debt servicing of Rs 634.00 crore during the quarter

Future Growth Initiatives

• The Board of Directors has approved seeking shareholder authorization for issuing Foreign Currency Convertible Bonds (FCCBs) up to USD 600.00 million through international offering via private placement. This move aims to fund growth initiatives.
• Reliance Power granted approximately 100 lakh stock options under its Employee Stock Option Scheme, potentially aligning employee interests with the company's long-term performance.

Conclusion

Reliance Power's quarterly results demonstrate a significant improvement in profitability and operational performance. The company's focus on debt management, coupled with its plans for raising capital through FCCBs, suggests a strategic approach to future growth while maintaining financial stability.

Reliance Power shares witnessed a significant uptick on Wednesday, climbing 7.8% to Rs 42.30. This surge came in the wake of the company's clarification regarding a recent arrest made by the Enforcement Directorate (ED) in connection with a fake bank guarantee case.

Company Denies Connection to Arrested Individual

Reliance Power issued a statement asserting that Amar Nath Dutta, the individual arrested by the ED, has no association with the company or any of its subsidiaries. The company emphasized that it is, in fact, a victim of fraud in this case and assured stakeholders that the arrest would not impact its business operations.

Details of the Case

The case revolves around alleged forged bank guarantees worth over Rs 68 crore, which were reportedly arranged to help a Reliance Power subsidiary qualify for a Solar Energy Corporation of India (SECI) tender. Dutta is accused of collaborating with previously arrested individuals, including the company's former CFO, in this scheme.

Broader Investigation

This incident is part of a larger ED investigation into Anil Ambani's Reliance Group. The probe has already resulted in asset attachments worth over Rs 7,500 crore and allegations of loan diversions between 2010-2012.

Market Response and Future Outlook

The market's positive reaction to Reliance Power's clarification reflects investor relief over the company's stance. Additionally, the share price rally comes as the company approaches its quarterly results announcement. Investors may be optimistic following Reliance Power's turnaround in the previous quarter, where it reported a profit of Rs 44.68 crore compared to a loss of Rs 97.85 crore in the same period last year.