NTPC says rupee depreciation will not hit profits

NTPC does not see the rupee depreciation hurting its profits due to expensive coal imports, but as a prudent measure, it has started hedging part of its foreign currency liabilities. The state-run utility has recently, for the first time, hedged a loan of around $5 million to “”test waters”” in foreign currency hedging, executives of the company said. NTPC’s chairman and managing director Arup Roy Choudhury said that the “”unprecedented”” fall in the value of rupee may not hurt the company’s profits as the additional cost of importing coal would be passed on to customers.
“We will not be impacted as fuel cost is a pass-through for us. We will be importing 16 million tonnes of coal this year, of which we have already placed orders for 7.5 million tonnes,”” said Roy Choudhury. NTPC, which has an installed capacity of 41,184 mw, plans to import a total of 16 million tonnes of coal in the current fiscal year to March, which is over 60% higher than its imports last year. The Indian currency has fallen almost 20% against the dollar in the past year. A dollar is worth Rs 66 now, which is hurting most power companies which are dependant on imported coal for powering their units.

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