India’s power distribution companies, commonly called DISCOMs, have achieved a rare financial milestone. In fiscal year 2024-25 (FY25), they reported a collective net profit of ₹2,701 crore. This ends years of persistent losses and financial stress in the sector. Government data shows the turnaround after a long phase of deficits and mounting debt.
For over a decade, DISCOMs faced losses and high operating costs. In FY24 alone, they posted a loss of ₹25,553 crore, while in FY14 losses were even larger. However, reforms and cost controls have significantly changed their financial position.
The financial improvement was supported by better operational efficiency and strict controls. Aggregate Technical & Commercial (AT&C) losses fell from over 22 % in FY14 to about 15 % in FY25. In addition, the gap between the average cost of supply and average revenue realized (ACS-ARR) narrowed sharply to around ₹0.06/kWh.
Moreover, outstanding dues to power generators dropped dramatically. They fell by nearly 96 %, reducing from around ₹1.4 trillion in 2022 to about ₹4,927 crore by early 2026. Payment cycles for distribution utilities also shortened from 178 days to 113 days. These changes improved cash flows and overall sector health.
Reforms like the Revamped Distribution Sector Scheme (RDSS) and smart metering have also helped. RDSS pushed infrastructure upgrades and smart billing, while tighter subsidy accounting ensured timely cost adjustments. In turn, revenue collection became more reliable.
Power Minister Manohar Lal said the FY25 profit marks a “new chapter” for DISCOMs and reflects the success of sustained reforms. Analysts note that improved billing systems, reduced technical losses, and better financial discipline played key roles.
Despite this progress, some challenges remain. DISCOMs still carry structural debt and must further modernize to support India’s growing electricity demand. Nevertheless, the FY25 profit shows that disciplined policy action can stabilize the backbone of India’s energy distribution sector.
Reference- Business Standard, Economic Times, PIB, Ministry of Power
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