Tata Power Company Ltd. is poised to announce its second-quarter (Q2) financial results for the September quarter today, with market analysts projecting significant year-on-year growth in both net profit and revenue.
Strong Profit Surge Anticipated
Analysts are optimistic about Tata Power's performance, with expectations ranging from a 10% to a substantial 42% increase in net profit compared to the same period last year. Nuvama Institutional Equities, for instance, anticipates a 27% year-on-year growth in adjusted profit after tax, reaching Rs 1,168 crore. This is primarily driven by higher associate profits, particularly from coal mines, and a notable reduction in losses from the Mundra Ultra Mega Power Project (UMPP), which are expected to drop to Rs 150 crore per quarter from Rs 400 crore a year ago.
Motilal Oswal Financial Services (MOFSL) projects an even higher adjusted profit growth of 42% year-on-year, potentially reaching Rs 1,300 crore. PL Capital, while more conservative, still sees a 10% rise in profit, totaling Rs 1,010 crore.
Revenue and Operational Highlights
Consolidated revenue is also expected to see a healthy uplift. MOFSL forecasts a 26% year-on-year increase in consolidated revenue to Rs 19,570 crore. Key drivers for this revenue growth include the Mundra plant operating under Section 11 regulations, the contribution from renewable energy (RE) assets commissioned over the past year, and a robust performance from the Odisha Discoms.
Nuvama expects revenue to climb 19% year-on-year to Rs 18,504 crore. While sequential growth might appear flattish due to a strong Q1 base, the solar manufacturing ramp-up remains encouraging. The performance of Tata Projects, Mundra UMPP, and the consolidation of EPC/module sales are identified as key monitorables. Recovery in the Odisha DISCOM performance, following a lull in the previous quarter, is also anticipated.
Thermal Generation and Margins
In Q2, the thermal generation mix constituted 69%, with the thermal plant load factor (PLF) accelerating to 68.3% against 61.9% year-on-year. Tata Power reported a PLF of 72.6% in Q2. Despite strong operational performance, analysts predict a slight decline in EBITDA margin on a year-on-year basis, with Nuvama estimating it at 21.7% compared to 22.7% a year ago.
Overall, the market will be closely watching the official announcement for confirmation of these positive forecasts and further insights into the company's strategic direction and future outlook.