Authors: K Kishore Naidu, Subbarayudu C
Abstract: Working capital management is essential for maintaining the financial health and operational efficiency of power distribution companies. This study focuses on analyzing the working capital practices of the Southern Power Distribution Company of Andhra Pradesh (APSPDCL), a major public sector utility responsible for electricity distribution across the southern districts of Andhra Pradesh. The research evaluates key components of working capital, including current assets, current liabilities, receivables, inventory, and cash management. It also examines the challenges faced by APSPDCL in managing its working capital, such as delayed payments from government departments, high transmission and distribution losses, and increasing power purchase costs. The analysis is based on data from financial statements, annual reports, and key performance indicators over a five-year period. Findings indicate that while APSPDCL has made progress in improving billing efficiency and revenue collection, its working capital cycle remains strained due to large outstanding receivables and liquidity issues. The study suggests measures such as stricter credit control, efficient billing systems, and better fund flow management to enhance financial stability. Effective working capital management is vital for ensuring uninterrupted service delivery, reducing dependence on external borrowings, and supporting long-term sustainability.
