Tata Power Company shares fell 3% in early trade on Thursday after its September quarter reports disappointed investors. The power giant's three-session winning streak came to an end as several analysts maintained bearish calls on the company.
Tata Power shares opened marginally lower today at 254.65, compared to the previous closing price of 254.90 on the BSE. The stock fell as much as 2.96% to 247.35 in the first hour of trading, while the market capitalisation fell to 79,707 crore. Tata Power shares are currently down 10.5% from their 52-week high of 276.50 on September 8, 2023. On March 28, 2023, the counter fell to a 52-week low of 182.45.
Tata Power shares have returned 9.4% in the last year, while they have risen 20.7% in the calendar year 2023. The power stock has gained 23% in the last six months and 7.2% in the last three months. The counter has dropped more than 3% in the last month.
Tata Power recorded a consolidated net profit of 1,017.41 crore for the second quarter ended September 2023, an increase of 8.79% over the previous year's net profit of 935.18 crore. During the quarter, core businesses contributed 84% of earnings, while offshore joint ventures, especially coal mining operations, continued to deteriorate.
Consolidated sales increased by 9% to 15,442 crore in Q2 FY24, up from 14,163 crore in Q2 FY23.
"The Company has maintained its strong financial performance on the back of its healthy balance sheet, operational excellence, and synergies across all business clusters," according to a Bombay Stock Exchange (BSE) filing.
EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed by 51% year on year to 3,087 crore.
"We have reported yet another strong quarter of financial performance, driven by robust contributions from all our core business clusters," says Praveer Sinha, CEO and Managing Director of Tata Power. Our financial discipline, operational excellence, business resilience, and diversity have all contributed to our sustained profit growth."
"We are constantly focusing on new growth areas, such as our Greenfield solar cell and module manufacturing plant in Tamil Nadu, which produced its first module this quarter and is on track to roll out the first cell in Q4FY24." "We are making significant progress in enabling green energy transition by supplying round-the-clock renewable energy with hybrid solar and wind plants, as well as Pumped Storage plants," Sinha adds.
During the quarter under review, the company's clean energy portfolio surpassed the 5,500 MW mark, accounting for 38% of total installed generation capacity. Tata Power also made great improvements in its distribution business in Odisha, boosting its cash flow and lowering AT&C losses. Furthermore, it is well-positioned to capitalize on pumped hydro storage projects, having inked an MoU with the Maharashtra Ministry for the development of a 2,800 MW project, according to the announcement.
Following the release of the second quarter results, foreign brokerages CLSA, Goldman Sachs, and Morgan Stanley maintained their pessimistic stance on the company. While CLSA and Goldman Sachs kept their sell' calls on Tata Power shares at 205 and 215 per share, respectively, Morgan Stanley kept its 'underweight' rating at 207 per share.
