Tata Power Company has declared lacklustre results in the December quarter (3QFY02). Its topline has shown a YoY growth of 5% during the quarter, as compared to an 18% jump in topline during the September quarter. Its bottomline growth during 3QFY02 is 6%.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
Diluted no. of Shares (eoy) (m)
Diluted Earnings per share*
Current P/e ratio
Though the company managed to improve operating margins as a result of an 8% fall in fuel cost, higher depreciation and interest expenses was responsible for the staid growth in bottomline. Had it not been for higher other income, the company would have shown a degrowth of atleast 22% in bottomline during the quarter. Profits from Tata Petrodyne's oil exploration business aided the bottomline growth. However, it is not clear whether the numbers include the transmission business of Tata International, which the company acquired during the September quarter.
Cost of power purchased
Cost of fuel
On a nine month basis, Tata Power's turnover was up by 10% and the bottomline recorded a 17% growth (excl. extraordinary income). The extraordinary income this year reflects the profit on sale of investments including sale of US 64 units as well as sale of its stake in Tata BP Lubricants.
Tata Power commissioned a 120 MW brownfield unit at Jojobera in February 2001 and an 81.3 MW plant was on stream in March 2001. As a result, the company generated and sold 17% more electricity this quarter as compared to December quarter last year. On a nine month basis, the company has generated 15% more electricity YoY. But despite this, a corresponding growth is not reflected in the topline. This is because the realisation per MU sold has gone down this quarter. On a nine month basis, the realisation per unit sold stands at Rs 3.5. However, for the December quarter, the realisation is marginally lower at Rs 3.4 per unit.
Sale of electricity
Tata Power commissioned another 120 MW capacity at Jojobera in December 2001 and a 37.5 MW plant at Wadi is likely to come up by June 2002. Its captive power generation (CPP) capacity is slated to zoom from 800 MU (million units) in FY01 to around 2,000 MU by FY03. Considering the fixed return on capital, on which the power business in India operates, this should add to its bottomline progressively. However, higher interest and depreciation burden is taking a toll on the company's profitability. Also, tax liability this quarter (Rs 210 m) is a deferred tax liability. Had the AS-22 norm not come into effect, Tata Power would have had a zero tax liability this quarter.
At the current price of Rs 123 the stock trades on a P/E of 8.3x annualised 9m FY02 earnings.
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