KOCHI: Kerala State Electricity Board's (KSEB) profitable run through the first nine months of FY26 came to an abrupt end in the March quarter as a sharp increase in employees cost pushed the state power utility into a full-year loss despite a significant decline in power purchase costs.
KSEB had reported a cumulative profit of Rs870.29 crore during the first three quarters of FY26. However, the utility posted a loss of Rs1,128.30 crore in the March quarter, resulting in a full-year net loss of Rs256.01 crore.
The sharp deterioration coincided with a steep increase in employee benefit expenses. The expense almost doubled to Rs2,390.15 crore in the March quarter from Rs1,015.82 crore in the corresponding quarter of the previous year.
For the full year, employee benefit expenses rose to Rs6,527.32 crore from Rs4,377.30 crore in FY25, an increase of nearly Rs2,150 crore, or about 49 per cent.
The rise in employee costs came despite KSEB recording lower expenditure on power purchases, traditionally its largest cost component. Power purchase expenses declined to Rs11,399.30 crore in FY26 from Rs12,749.65 crore in the previous year, a reduction of about Rs1,350 crore.
Power purchase bill
While revenue from operations remained broadly stable, rising 1.6 per cent to Rs22,067.87 crore from Rs21,719.26 crore, the increase in employee benefit expenses more than offset the savings achieved in power procurement.
The March-quarter figures underline the impact of the higher employee-related expenditure on KSEB's annual financial performance. The utility had remained profitable through the first three quarters before slipping into a substantial loss in the final quarter.
The financial statements do not immediately explain the reasons for the sharp increase in employee benefit expenses. Businessbenchmark.news has sought clarification from KSEB on the factors behind the rise and whether it reflects a one-time accounting adjustment or a recurring expenditure.
