Tata Power reports below estimate Q4 results; Here is what brokerages recommend

Tata Power shares will be watched in Thursday's (May 9) trade as the power generation company reported its Q4FY24 numbers on Wednesday after market hours.

On May 8, the Tata Group company logged a 15.1 per cent rise in its consolidated net profit to Rs 895.2 crore in the March quarter compared to the year-ago period mainly on the back of higher revenues. The profit after tax (PAT) was estimated at Rs 950 crore by Zee Business Research for the quarter ended March 31, 2024.

The consolidated profit stood at Rs 778 crore in the quarter ended on March 31, 2023.

Total income of the company rose to Rs 16,463.94 crore in the quarter from Rs 13,325.30 crore in the same period a year ago.

The consolidated net profit in the fiscal year 2023-24 rose to a record Rs 4,280 crore from Rs 3,810 crore in the year-ago period, the company said in a statement. Total income increased to Rs 63,272.32 crore in FY24 from Rs 56,547.10 crore in 2022-23.

According to the statement the company's market capitalisation has surpassed Rs 1.4 lakh crore.

The FY23-24 saw the company achieve its highest-ever revenue and EBITDA at Rs 61,542 crore and Rs 12,701 crore respectively, backed by a strong rising share from core businesses of Generation, Transmission & Distribution and Renewables, which contributed 74 per cent to FY24 PAT compared to 44 per cent in FY23.

Tata Power dividend

The Board has recommended a final dividend of Rs 2 per equity share of Rupee 1 each (200 per cent) for the financial year ending March 31, 2024. The company has fixed the record date as Thursday, July 4, 2024, for payment of dividends.

Management commentary

Praveer Sinha, CEO, and Managing Director, Tata Power, said, "Our clean energy portfolio will touch 15 GW by FY27 and we are committed to supplying round-the-clock renewable energy to our consumers with a mix of solar, wind, and Pumped Hydro Storage Projects in our portfolio." 

He further stated that the company is well-poised to take on newer power distribution opportunities once they open for privatization.

The rooftop solar business is displaying growth momentum and with a portfolio of over 2 GW, the company is well-positioned to tap the increasing opportunities, especially under the PM Surya Ghar Yojana which aims to light up one crore households, he pointed out.

Tata Power's 4.3 GW Cell & Module manufacturing facility in Tirunelveli, Tamil Nadu has commenced production and commercially produced around 130 MW of Modules in Q4 FY24.

The company is on an accelerated growth trajectory of transitioning to green energy and aiming for around 70 per cent of capacity from non-fossil-based fuels by 2030.

As of March 31, 2024, the Company has 4.5 GW of renewable capacity operational and another 5.5 GW of projects under implementation, taking the total green energy portfolio to over 10 GW.

The company has 6,277 Ckm (Circuit Kms) of transmission lines portfolio including 1,651 Ckm capacity in the pipeline.

During FY24, the company won two projects worth Rs 2,300 crore under the Tariff-Based Competitive Bidding (TBCB) process – the Interstate Transmission System (ISTS) - Bikaner III Neemrana II Transmission Ltd and the Intrastate Transmission Scheme in Uttar Pradesh through SPV Jalpura Khurja Power Transmission Ltd.

What should investors do? 

CLSA maintained 'sell' call on the stock and gave a target of Rs 297 apiece.
 
Goldman Sachs also continued with a 'sell' and gave a target of Rs 240 apiece. As per the brokerage, 35x FY26E P/E, risk-reward is unfavorable. 

Tata Power share price: Past performance 

In a year, Tata Power shares have gained over 112 per cent against Nifty50's rise of over 22 per cent. 

Catch all the updates of the May 9 session on Dalal Street here. For all other news related to business, politics, tech and auto, visit Zeebiz.com.

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