Tata Power shares fall on muted Q3 earnings

Tata Power shares plunge: Power company Tata Power’s share dropped as much as 6.57 per cent to hit an intraday low of Rs 366.30 per share on Monday after the company reported a muted set of December quarter earnings. 

The Mumbai-based company’s profit rose a little over 2 per cent to Rs 1,076 crore in the December quarter, from Rs 1,052 crore in the same quarter a year ago (Q3FY23). 

Tata Power’s top line jumped about 3.7 per cent to Rs 14,651 crore, from Rs 14,129 crore in the same quarter a year ago. The company’s operating profit, also known as EBITDA, climbed 3.6 per cent annually to Rs 2,417 crore.

The electric utility company’s margin remained flat at 16.5 per cent annually.

“The strong momentum in the core business segment also shows the company's contribution to the energy transition that the country is witnessing. The company has been working in various ways, including the development of 2.8 GW pumped hydro storage projects with an investment of approximately Rs 13,000 crore, to offer firm and 24x7 dispatchable renewable energy to all segments of consumers,” Tata Power said.

As of December 31, 2023, the Company’s operational capacity stood at 4,270 MW in the renewables segment, generating 6,031 million units (MUs) of green power. 

Praveer Sinha, CEO and Managing Director, Tata Power, said, “Our core businesses continue to perform well and have helped the company clock its 17th consecutive profit after tax (PAT) growth quarter. Our consistent performance shows strong fundamentals of excellence in operational performance and project execution capability. As the country witnesses a surge in power demand, Tata Power is well positioned to capitalise on the growth momentum with its cutting-edge, customized and cost-effective clean and green energy solutions.”

The company claims that it is on an accelerated growth trajectory of transitioning to green energy and aiming for around 70 per cent of capacity from non-fossil-based fuels by 2030.

Meanwhile, brokerage firm JM Financial said, “The company’s recalibrated strategy involving tapping high-margin group captive renewable energy (RE) opportunities, venturing into brownfield pumped hydro storage, expanding transmission business beyond distribution, and visible resolution of the Mundra issue, positions the company for accelerated growth.” JM Financial analysts continues to maintain ‘buy’ rating with a sum-of-the-parts valuation-based target price of Rs 440 per share.

As of 11:01 am, shares of Tata Power were trading 6.27 per cent lower at Rs 367.50 per share.