Tata Power Ltd. has recently seen some turbulence, despite its shares rising by a healthy 71% over the previous six months. The stock has dropped 3.5% in the previous five days in advance of the Tata Group company's March quarter earnings, which are expected later today.

JM Financial predicts that DISCOMS would perform better than anticipated, which will lead to an 8% YoY increase in Tata Power's earnings to Rs 838.20 crore. Sales are expected to rise 21% YoY to Rs 15,090 crore due to robust RE capacity & Mundra operationalization performance. According to JM Financial, margin will increase 344 points annually to 19%.

Tata Power, on the other hand, had a 2.2% YoY increase in recurring profit after tax at Rs 959 crore on a 6.8% YoY increase in sales at Rs 13,301 crore, according to Elara Securities. At Rs 2,194.70 crore, the quarter's EBITDA is expected to increase 13.9% year over year. 

Future key metrics to watch would include the rate of renewable energy transition, the trend in global coal prices, and the sustainability of power demand. "Overall, we remain positive on the utilities space with likely stability in power demand and continued momentum in energy transition," stated JM Financial.

After accounting for one-time ITPC regulatory income and a reduced dividend tax on coal earnings, Tata Power's profit after tax fell 6% YoY in the first nine months of the year.  Due to the requirement to obtain coal from captive KPC mines this quarter in order to avoid using third parties for third-party coal procurement, CGPL (Mundra UMPP) saw a return to losses in the December quarter.  A decrease in coal realization led to an estimated 81% decline in coal earnings during the previous nine months. Rising Solar EPC and Odisha distribution income more than made up for this. 

Recently, SJVN Limited and the company's branch Tata Power Renewable Energy inked a PPA to establish 460 MW of firm and dispatchable renewable energy projects.