Power distribution utilities post profit after years of losses

India’s power distribution utilities have reported a consolidated Profit After Tax (PAT) of Rs 2,701 crore in FY 2024–25, marking a shift after several years of losses. The figures cover distribution companies and power departments and were released by the Ministry of Power on 18 January 2026.

The sector’s return to profitability contrasts with a loss of Rs 25,553 crore in FY 2023–24 and a loss of Rs 67,962 crore in FY 2013–14. Distribution utilities had consistently recorded negative PAT since the unbundling and corporatisation of State Electricity Boards.

Union Minister of Power Manohar Lal said the outcome reflects sustained efforts to address long-standing structural issues in the distribution segment. He attributed the improvement to a series of policy and regulatory measures aimed at financial discipline, operational efficiency, and cost recovery. The minister also reiterated the government’s commitment to reforms that allow the power sector to support economic growth and long-term development goals.

Key initiatives cited by the Ministry of Power include the Revamped Distribution Sector Scheme (RDSS), which focuses on infrastructure upgrades and accelerated smart metering. Additional prudential norms now link access to finance for power sector utilities with performance benchmarks. Amendments to the Electricity Rules have been introduced to ensure timely cost adjustments, rational tariff structures, and transparent accounting of subsidies.

The Electricity Distribution (Accounts and Additional Disclosure) Rules, 2025 have brought in uniform accounting practices and improved financial disclosures across distribution utilities. The Electricity (Late Payment Surcharge) Rules have strengthened enforcement of payment discipline, supporting investment flows into the sector. States have also been incentivised to implement reforms through an Additional Borrowing Scheme that ties borrowing limits to performance indicators.

The impact of these measures is reflected in operational metrics. Aggregate Technical and Commercial (AT&C) losses declined from 22.62% in FY 2013–14 to 15.04% in FY 2024–25. The Average Cost of Supply–Average Revenue Realised (ACS–ARR) gap narrowed from Rs 0.78 per kWh to Rs 0.06 per kWh over the same period.

Outstanding dues to generating companies fell by 96%, from Rs 1,39,947 crore in 2022 to Rs 4,927 crore by January 2026. Distribution utility payment cycles also shortened from 178 days in FY 2020–21 to 113 days in FY 2024–25.

The ministry noted that regular engagement with states and Union Territories played a role in the turnaround. These included regional conferences of energy ministers held in 2025 at Gangtok, Mumbai, Bengaluru, Chandigarh, and Patna. The government expects the current momentum to continue, supported by deliberations of a Group of Ministers chaired by Minister of State for Power and New and Renewable Energy Shripad Naik, focused on improving the financial viability of DISCOMs.

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