Tata Power Q4 Preview: Revenue to Rise, Net Profit Likely to Drop

by | May 8, 2024 | 0 comments

Numerous analysts are optimistic about the company due to the favorable outlook on power demand.

The Tata Power stocks went up by more than 123% in the last one year and is currently trading at the trailing PE of 40.70 which is way above the average sectoral ratio of 27.64.

Tata Power might record a 3% dip in net profits, while revenue for the fourth quarter is estimated to have grown by about 30% compared to same period last year. The consensus from five brokerages indicates that there will be revenues of Rs 16,271 crore and Rs 909 crore as net profit. The results will be announced on May 8th.

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Many market experts remain optimistic about the company’s future due to strong power demand. In January 2024, analysts at Antique highlighted three reasons why Tata Power could outperform its sector: stable coal profit adjustments, consolidated renewable energy (RE) having potential for generating an EBITDA of Rs10,000 crores by FY2027(from estimates of FY2024 which are Rs3,400 crores), favorable capital investment per MW for pumped hydro resulting into higher platform valuation.

Even JM Financial’s report in February predicted that Tata Power’s strategies such as targeting high-margin group captive renewable energy, exploring brownfield pumped hydro storage, expanding transmission operations beyond distribution with Mundra issue resolution would position this company nicely in order to grow fast.

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“By FY26 we are looking at having over fifty percent of our total capacity being green,” said Praveer Sinha, CEO and MD of the company. He added: “As things stand today our clean energy portfolio stands at around 5500 MW.Some more renewable projects (mostly solar and wind) totaling over 3700 MW have been put on hold.”

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