BESCOM Records Rs 293.62 Crore Profit After Seven Years

Bengaluru electricity distributor BESCOM has reported a major financial turnaround after seven consecutive years of losses. The company recorded an annual profit of Rs 293.62 crore during the 2025 to 2026 financial year, marking its return to the profit path.

The development comes despite the financial pressure associated with the Gruha Jyothi scheme, under which eligible domestic consumers receive free electricity within the prescribed limits. The latest performance has therefore attracted attention as BESCOM works to strengthen its finances while continuing to serve a large consumer base.

The company had last reported a substantial profit in 2017 to 2018, when it earned Rs 568.29 crore. It subsequently faced losses running into thousands of crores over several years.

Officials have attributed the latest improvement mainly to lower electricity procurement costs and tariff related decisions by the Karnataka Electricity Regulatory Commission. The commission’s tariff orders have allowed electricity rates to be revised while also providing scope for regular collection of fuel and power purchase cost adjustment charges.

Power procurement is particularly important for BESCOM because it accounts for roughly 80 percent of the company’s overall expenditure. A greater share of comparatively cheaper hydropower during the latest financial year helped reduce dependence on thermal power and brought down the cost of purchasing electricity.

The company has also worked on reducing its financial burden through several internal measures. Loan refinancing helped bring down interest costs by around 1.5 to 2 percent, resulting in significant savings for the utility.

Another measure involved payments to suppliers. BESCOM made use of discounts offered when supplier bills were settled on the day they were submitted. This reportedly allowed the company to save around Rs 100 crore, according to a report quoting BESCOM Managing Director Dr N Shivashankar.

Officials have said that the improvement was not the result of one single measure. Along with lower procurement costs, BESCOM introduced tighter expenditure controls and several financial management measures aimed at improving both savings and revenue.

Energy Minister K J George has credited the turnaround to the combined efforts of BESCOM officials and employees. He said the company was under considerable financial pressure when he took charge of the energy portfolio and that steps were subsequently taken to bring greater financial discipline across different levels of the organisation.

The latest profit, however, does not mean that BESCOM has completely overcome its financial difficulties. The company continues to carry an accumulated loss estimated at around Rs 13,000 crore.

Accumulated loss refers to the total losses built up over several financial years. Recovering from such a large deficit is likely to take considerably longer than a single profitable year, financial experts have pointed out.

Energy expert and former KERC advisory council member M G Prabhakar has described the latest result as an early sign of improvement rather than a complete financial recovery. According to the assessment cited in the report, even if BESCOM manages to generate profits of around Rs 1,000 crore every year, clearing an accumulated loss of about Rs 13,000 crore could take more than a decade.

BESCOM also faces another challenge as some industrial consumers are increasingly considering alternatives such as captive power generation and open access. This could affect the company’s revenue base if more large consumers reduce their dependence on the distribution utility.

Retaining existing customers while attracting new consumers will therefore remain important for BESCOM in the coming years. The company will also need to maintain control over power procurement costs and operating expenses if it wants to continue its recent financial improvement.

For now, the Rs 293.62 crore profit represents a significant change from the losses recorded in previous years. But the sizeable accumulated deficit means BESCOM still has a long financial road ahead.

The latest figures suggest that lower procurement expenses, tariff adjustments, refinancing and tighter financial management have together helped the company move into positive territory. Whether this improvement can be sustained over several years will be crucial to BESCOM’s effort to gradually reduce its accumulated losses.