Tata Power to share Q1 results today; profit may drop up to 20% as coal biz weighs

Tata Power is likely to report a 17-20 per cent year-on-year (YoY) drop in profit on a flattish sales in the June quarter. The lower profitability from coal business may partially be offset by a sequential improvement in performance of Mundra UMPP given implementation of Section 11 of Electricity Act from April 2023, analysts said. Ebitda margin is expected to expand on yearly basis.

Kotak Institutional Equities expects Tata Power to report a 17.7 per cent year-on-year drop in profit at Rs 656.4 crore for the June quarter against Rs 794.60 crore in the same quarter last year. Sales are seen falling 1 per cent to Rs 14,625.30 crore from Rs 14,775.90 crore YoY. Ebitda margin is seen expanding 47 basis points to 13.8 per cent against 13.3 per cent YoY.

"Earnings from renewable portfolio will benefit from higher capacity base as well as strong execution at Tata Power Solar. Sequential improvement at Mundra as Sec 11 comes into play once again, although profits from coal mines in Indonesia will weaken," it said.

Sharekhan pegs Tata Power's bottom line at Rs 640 crore, down 19.5 per cent YoY. It sees sales edging 0.4 per cent higher at Rs 14,556 crore. It sees operating profit margin at 14.1 per cent.

On a sequential basis, "Tata Power is expected to report 18 per cent QoQ and 2 per cent YoY growth in revenue led by strong demand in Odisha and running of Mundra power plant under Sec 11. However, profitability from the same will be offset by softening of Indonesian coal prices, leading to lower realisation from coal mines," said JM Financial.

This brokerage, however, sees profit coming in at Rs 790 crore, down 1 per cent YoY. It sees sales rising 2 per cent to Rs 15,061 crore.

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