Evaluating Financial Performance of Public and Private Power Distribution Companies in Gujarat: A Decade-Long Comparative Analysis

Abstract

DISCOMs are the bloodstream of the Indian power industry and since they are so in the prosperously industrialized Gujarat, India watershed industrial powerhouse. Despite the huge reforms implemented and advancements made, DISCOMs have continued to bear financial and operational challenges, in other words, the losses due to AT&C, regulatory and debt overhang. To this end we juxtapose the comparative financial performance of the leading DISCOMs in Gujarat (PGVCL, UGVCL, DGVCL, MGVCL-Public sector and Torrent Power and MGVCL- Private sector) over a period of ten years (FY 2013-2023). The impressive multi-methods research intensifies the study by using ratio analysis, trend analysis and benchmarking, as the tool to analyze firm profitability, liquidity, solvency and efficiency of operations. Impressive conclusions are that there is a contrary comparison in the financial fitness between the public and the privately owned DISCOMs and certain systemic ineffectiveness. The analysis and conducted research will also have evidence-based policy propositions which can be used to improve financial sustainability and policy propositions, which can be made corresponding to Gujarat vision on energy. Our business touches upon many stakeholders involving regulators, DISCOM management, investors, or researchers interested in enhancing the robustness of the power sector.