Summary:
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### **1. Historic Financial Turning Point Achieved**
– **Aggregate Profit After Tax (PAT)** for FY25 is **INR 2,701 Crores**, a significant swing from a loss of INR -27,022 Crores in FY24.
– **AT&C Losses** reduced to **15.04%** (from 15.97% in FY24).
– **ACS-ARR Gap (Cash Adjusted)** improved to **INR 0.07/kWh** (from INR 0.32/kWh).
– **Key Insight:** This is the **first time** the sector has achieved **aggregate profitability**, indicating long-term reforms are working.
– **31 utilities** achieved **‘A+’ or ‘A’** ratings.
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### **2. Holistic Scoring Framework**
The rating is based on a **100-point system** covering:
– **Financial Sustainability (75 marks):** ACS-ARR Gap, Days Payable to GenCos, Quick Ratio, DSCR, Debt-to-Asset, Days Receivable.
– **Performance Excellence (13 marks):** Billing & Collection Efficiency, Distribution Loss, Corporate Governance.
– **External Environment (12 marks):** Subsidy Realization, Loss Takeover, Tariff Cycle.
– **Red Card Penalties:** Auditor’s adverse opinion, non-availability of audited accounts, default to banks/FIs, regulatory assets can lead to significant score deductions.
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### **3. Operational Efficiency Improvements**
– **Billing and Collection Efficiency** trends show **systemic improvement**.
– **30 state regulators** have implemented automatic fuel cost pass-through, reducing cost-recovery gaps.
– **Cash flow management** has strengthened, though a divide remains:
– **20 DISCOMs** pay within 60 days.
– **23 DISCOMs** still take >90 days to pay, indicating liquidity stress in lower-tier utilities.
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### **4. Top Performers & Grade Movements**
– **Elite Club (A+ Grade):** Dominated by **Gujarat DISCOMs** and **private utilities**.
– Torrent Power (Ahmedabad/Surat) scored **100/100**.
– Adani Electricity (AEML) achieved the **best ACS-ARR surplus** in India.
– **Notable Upgrades:**
– PSPCL (Punjab) to A+
– PVVNL (Uttar Pradesh) to A+
– NBPDCL (Bihar) from B to A
– Ladakh Power Dept from C to A
– **22 utilities** upgraded, **10 downgraded**, **34 improved scores by >5%**.
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### **5. Red Card & Danger Zone**
– **Governance lapses** led to downgrades for several utilities.
– **Red Card penalties** were imposed for:
– Auditor’s adverse opinion (e.g., APCPDCL, MSEDCL, BESCOM)
– Default to banks/FIs (e.g., MSPDCL default to PFC)
– **11 utilities remain in Grade C/C-** (Danger Zone), including BESCOM and JBVNL.
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### **6. Digital Transformation as Key Enabler**
– **Top performers** commonly invested in:
– Cloud ERP (MS Azure)
– Smart Grid Automation, SCADA/ADMS, drone monitoring
– AI/ML-based theft detection (e.g., ‘V-Mitra’)
– Omnichannel payments (UPI/BBPS) & AI chatbots (‘Elektra’)
– VR-based training and helmet cameras for safety
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### **7. Utility Spotlights & Key Lessons**
– **Andhra Pradesh (APCPDCL):** Strong operational metrics but **penalized for governance** (auditor’s adverse opinion), resulting in **Grade B**.
– **Gujarat DISCOMs:** **Gold standard** for state-owned utilities—all rated A+, driven by financial discipline, cost management, and subsidy realization.
– **Bihar (NBPDCL & SBPDCL):** **Massive financial turnaround** in a challenging region, driven by improved collection efficiency.
– **Assam (APDCL):** Strong financial health (profit, 100% subsidy realization) but **AT&C losses increased**—a key focus for FY26.
– **Private Utilities:** Set the **efficiency frontier** (Torrent, Adani, Tata in Odisha).
– **Power Departments:** **High variance**—Kerala (TCED) leads, Ladakh most improved, Andaman & Nicobar lags.
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