Home Business Tata Power is down 9% on large volumes after the March quarter

Tata Power is down 9% on large volumes after the March quarter


Promotions fell 9 percent to 223 rupees on the BSE on Monday in intraday trading amid heavy despite the company reporting strong results for the March quarter (Q4FY22). The company reported an increase in consolidated profit after tax (PAT) of 76% on an annualized basis (PAT) to exclusive items of Rs 775 crore, while consolidated revenue increased by 16% in y / y to Rs 12,085 crore.

The company received approval to merge Coastal Gujarat Power Limited (CGPL). and signed a binding agreement to invest in India’s most complete renewable energy platform.

Strong consolidated earnings, supported by higher individual earnings (increased dividend income and tax benefits from the CGPL merger) and good performance of the renewable energy business, helped offset lower coal profits and weak EPC margins for solar energy.

However, Sharekhan analysts believe that declining sales and heavy rains in March led to damage to coal mining in the IV quarter. “The coal business is disappointed as PAT fell 36% in the quarter (QoQ) to 397 crore rupees as sales in January were limited to domestic Indonesian customers (marginal price $ 70 per tonne) and lower sales (down 21%). % in the quarter) due to heavy rains in March, “- said the brokerage firm.

Meanwhile, Mundra UMPP reported a loss of 484 rupees due to a lower power conversion factor (PLF) of 25 percent and an increase in fuel prices to rupees. 1 per unit (against Rs 0.16 per unit in the 3rd quarter of 2222). “Management has indicated that it is negotiating with Gujarat and negotiating with other states on additional power purchase agreements (PPAs) to pass the cost of fuel coal. This will reduce the cost of fuel and reduce losses in Mundra, ”the brokerage company said. added the firm.

In addition, analysts at Antique Stock Broking believe that a slower CGPL resolution, a slowdown in RE and a sharp drop in coal prices are key risks ahead. “In the past, the distribution of capital was due to 39% in coal / CGPL, 32% in regulated plants and 29% in renewable energy. 49% of regulated companies (up from 31% of T&D) and 32% of renewable energy sources will be ahead, ”the brokerage company added.

On the other hand, analysts believe that Tata Power’s focus on business restructuring (CGPL merger), focus on RE’s high business growth and entry into electricity transmission will play a crucial role for sustainable revenue growth and improved revenue quality. “In addition, management’s restructuring plans to increase the share of RE’s high-growing business will lead to a sustained improvement in ESG. a “buy” rating of the stock and a target price of Rs 315 per share.

At 12.33; shares traded 6 percent lower at Rs 231.35 compared to a 0.35 percent decline in S&P BSE Sensex. Trade on the counter almost doubled as about 50 million shares went into the hands of NSE and BSE.

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