Tata Power Q3 Results: Profit Beats Estimates On Higher Sales, Margin
Operating margin jumped to 16.5% from 12.5%, while Ebitda was up 32.6%.
Tata Power Co.'s third-quarter profit has beaten analysts' estimates, aided by improved realisation per unit and better operating margin.
Net profit of one of India's largest independent power producers rose 12.5% sequentially to Rs 1,052.1 crore in the quarter ended December, according to its exchange filing. That compares with the Rs 900.5 crore consensus estimate of analysts tracked by Bloomberg.
Tata Power Q3 FY23 Highlights (QoQ):
Revenue from operations rose 0.7% to Rs 14,129.1 crore, against an estimate of Rs 13,837.07-crore. It was up 29.6% YoY.
Ebitda rose 32.6% to Rs 3244.8 crore, compared with the Rs 1,933.75-crore forecast.
Ebitda margin stood at 16.5%, against 12.5% in the previous quarter.
On a year-over-year basis, the consolidated net profit nearly doubled on account of higher pickup and revenue from distribution companies.
The first three quarters of the current fiscal delivered sequential revenue and profit growth and the fourth quarter is expected to replicate the growth, Praveer Sinha, managing director and CEO of Tata Power, said.
The third quarter saw significant strides in various businesses associated with the green energy platform, and the transmission and distribution business, according to Sinha.
"We have committed investments in renewables and in Odisha power distribution and have further strengthened our position in rooftop solar and EV charging domains," Sinha said.
"I am confident that we will continue to create greater value for all our stakeholders," he said.
Mundra Plant Update
The company is currently operating one unit out of its five units of 800 MW from the Mundra plant in Gujarat, Sinha told BQ Prime in a conference call.
The agreement with the state regulatory commissions under Section 11 of the Electricity Act to run imported coal-based plants to meet the emergent power demand last year ended on Dec. 31.
"The one unit operational at Mundra is supplying power to Gujarat. We have an agreement with Gujarat to supply 48% of the power capacity from the unit," Sinha said.
"The company is also in advance stage of discussion with five beneficiary states to enter into power purchase agreement for supplemental tariff, and purchase of power under Section 11. We hope to reach an agreement by the month end."
Coastal Gujarat Power Ltd., the subsidiary that operated the imported coal-based Mundra plant, has borne losses in excess of Rs 10,000 crore since its inception in 2012, after the Indonesian government benchmarked the coal price to global markets. The subsidiary was merged with the parent in 2021 to consolidate the assets and liabilities and efficiently utilise the capital for growth and development.
Outlook
The company believes that power demand will peak in excess of 230 GW during the peak summer in 2023 as there is a huge increase in consumption of power. The power demand already peaked to 205–210 GW in December as compared with 160 GW earlier, Sinha said.
He also believes that the coal prices that peaked to $400/tonne last year will stabilise in 12–18 months. The prices have already dropped to $300/tonne and they are expected to drop to 240-220/tonne in the next few months.
Shares of Tata Power closed 0.48% down before the results were announced, compared with a 1.52% rise in the benchmark Sensex.