Tata Power Q2 results: Profit may rise up to 40%, sales 17%; here are analyst previews

Tata Power is likely to report 6-17 per cent year-on-year (YoY) growth in sales for the September quarter but analyst estimates for profit growth vary widely. A few analysts said growth should be led by reduction in AT&C losses in Odisha circle and lower losses from Mundra plant. Indonesian coal business may log lower profits, they said. Margin for the quarter is seen improving YoY but falling on a sequential basis.

Kotak Institutional Equities expects Tata Power's adjusted profit after tax for the quarter to come in at Rs 1,112.40 crore for the September quarter, up 35.80 per cent YoY over Rs 819.10 crore in the same quarter last year. It sees sales for the quarter rising 6.6 per cent YoY to Rs 15,100 crore from Rs 14,163 crore YoY.

"Lower losses likely from Mundra as the plant was operating under cost-plus tariff during the quarter, even as coal mining profits moderate sequentially due to softness in realisations," Kotak said adding that earnings from renewable portfolio should benefit from higher capacity base and strong execution at Tata Power Solar.

JM Financial sees net sales for Tata Power to improve 15 per cent to Rs 16,096.80 crore on account of the Mundra  plant being operational under Section-11, as well as higher generation from renewables portfolio. Profit, it said, may improve 13 per cent YoY to Rs 928.30 crore on the back of reduction in AT&C  losses in Odisha circle and lower losses from Mundra plant.

Investec in its preview note said Tata Power should report a strong set of results led by strong  plant load factor (PLF) across Mundra station --63 per cent against 37 per cent YoY, and 43 per cent QoQ. It sees the rise in PLA to offset lower profitability across Tata Power's Indonesian coal business that is hurt by a steep correction in global coal prices. Net-net, it sees profit at Rs 1,004.50 crore and sales at Rs 16,193.30 crore.

Antique Stock Broking sees profit for the quarter rising 14.4 per cent YoY to Rs 937 crore. This brokerage sees sales for the quarter at Rs 15,616 crore, up 11 per cent. Tata Power, it said, would continue to face problems of declining international coal prices, as HBA benchmark Indonesia coal prices have corrected to $133. Mundra plant also continues to be an issue, it said adding that the rest of the business remains stable and growing at a moderate clip.

"Underlying Q2 Ebitda is estimated at Rs 2,790 crore (down 7 per cent YoY). The 4 GW  Mundra UMPP operated at a PLF of 63 per cent in Q2, the highest in the past 10 quarters. As  Section 11 notification will provide a fuel cost pass-through and availability-based under[1]recoveries will be lower in Q2, we expect a good quarter for Mundra UMPP. However, this  is likely to be offset by a lower share of PAT from the stake in Indo coal mines," Axis Securities said.

This brokerage sees profit falling 13.6 per cent to Rs 707.40 crore on 10.9 per cent YoY rise in net sales at Rs 15,554.40 crore. Ebitda margin for the quarter is seen at 16.2 per cent against 17.4 per cent in June and 13.5 per cent in the same quarter last year.

 

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