Tata Power Q3 results: Higher losses at Mundra likely; profit may fall YoY

Tata Power Company Ltd, a Tata group firm, is geared up to report its December quarter results on Wednesday. The Mumbai-headquartered company is expected to post a double-digit decline in net profit for the quarter on muted net sales. Ahead of the earnings announcement, Tata Power shares were trading 1.7 per cent higher at Rs 371.25 apiece.

Kotak Institutional Equities said Tata Power's earnings from the renewable portfolio will benefit from a higher capacity base as well as healthy execution at Tata Power Solar, even as it will see higher losses at Mundra as Section 11 benefit was not present in the December quarter.

This brokerage sees profit for the quarter falling 13.2 per cent YoY to Rs 895.10 crore from Rs 1,030.70 crore YoY. It sees sales falling 5.2 per cent YoY to Rs 14,327.60 crore. 

Nuvama Institutional Equities sees a 13 per cent YoY decline in Q3 profit, as losses at the Mundra UMPP persisted, even as the solar manufacturing ramp-up remained strong.  "Tata projects and Mundra UMPP performance along with consolidation of EPC/module sales is a key monitorable going ahead with all eyes on when and how the Mundra resolution pans out," it said.

This brokerage sees adjusted profit falling 12.76 per cent to Rs 899.20 crore despite 9.76 per cent YoY growth in sales at Rs 16,892  crore.  

JM Financial said Tata Power’s net sales could fall to Rs 13,800 crore, down 11 per cent YoY due to the non-operational Mundra Plant. EBITDA margin is expected to be at 24.7 per cent against 21.8 per cent YoY.

Decline in revenue could be offset by lower fuel cost (65 per cent YoY)
and other expenses (13 per cent YoY), it said adding that depreciation and finance cost expected to increase due to renewable commissioning.

Elara Securities expects Tata Power to report 5.1 per cent YoY rise in net profit at Rs 1,386.80 crore. It sees sales rising 2.4 per cent YoY to Rs 15.764.90 crore. Ebitda is seen at Rs 3,859.70 crore, up 15.1 per cent.