Tata Power shares in focus ahead of Q2 results. Here are brokerage estimates

Shares of Tata Power Company Ltd will be in focus on Wednesday morning as the Tata group firm reports its September quarter results later in the day. The integrated power company, which had 37.57 lakh retail investors as on September 30, is expected to report up to 40 per cent year-on-year (YoY) rise in profit on up to 17 per cent rise in sales. Marketmen tracking the company said while numbers should be aided by lower losses on Mundra plant and a cut in AT&C losses in Odisha circle, some hit for Tata Steel is likely due to Indonesian operations that could report lower profit. Margin for the quarter is seen improving on YoY basis, marketmen said.

Among brokerages, Antique Stock Broking expects net profit for Tata Power to rise 14.4 per cent YoY to Rs 937 crore while it forecast sales at Rs 15,616 crore, up 11 per cent YoY. The Tata group firm may keep facing problems due to declining international coal prices, it said citing a correction in HBA benchmark Indonesia coal prices to $133 levels. Mundra plant, Antique Stock Broking said continues to be an issue but the rest of the businesses stays stable, it added.

JM Financial is expecting revenue for Tata Power to climb 15 per cent to Rs 16,096.80 crore as the Mundra plant is being operational under Section-11. It also sees higher generation from Tata Power's renewables portfolio. The domestic brokerage expects Tata Power's profit to jump 13 per cent YoY to Rs 928.30 crore on account of reduction in AT&C losses in Odisha circle and lower losses in Mundra plant.

Kotak Institutional Equities pegs Tata Power's profit at Rs 1,112.40 crore for the September quarter, up 35.80 per cent YoY. It sees sales for the quarter rising 6.6 per cent YoY to Rs 15,100 crore.

"Lower losses are likely from Mundra as the plant was operating under cost-plus tariff during the September quarter, even as coal mining profits moderated sequentially due to softness in realisations," Kotak Institutional Equities noted, adding that earnings from renewable portfolio would benefit from higher capacity base and Tata Power Solar's strong execution.

Investec anticipated a strong set of results for Tata Power led by an improvement in plant load factor (PLF) across Mundra station to 63 per cent from 37 per cent YoY. It sees the rise in PLF to offset lower profitability in Tata Power's Indonesian coal business, which is hit by a fall in coal prices globally. This brokerage pegs profit figure at Rs 1,004.50 crore and sales print at Rs 16,193.30 crore.

"The September quarter Ebitda is estimated at Rs 2,790 crore, down 7 per cent on YoY basis. 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 expects net profit slipping 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 expected at 16.2 per cent against 17.4 per cent in June and 13.5 per cent in the same quarter last year.