All eyes now on tariff resolution as Tata  Power’s  Mundra  pain  recedes

Tata Power Co. Ltd’s shares have trailed benchmark indices by a wide margin in the past one year, with the company’s efforts to contain losses at its Mundra power plant dragging on.

However, the December quarter results show a significant improvement in the financial performance of the troubled unit.

Cost under-recovery at the Mundra power plant dropped to 32 paise per unit in Q3, from 93 paise per unit a year ago, because of low coal prices. As a result, operating profit at the plant improved to ₹261 crore, just ₹30 crore short of its finance costs. This is the closest the Mundra power plant has reached to generating its finance costs in recent quarters.