Tata Power has declared an 18% jump in its 3QFY01 turnover over the corresponding period in the previous year. The company however, managed to improve its net profit by a miniscule 1%, that too as a result of an 80% decline in tax provisioning.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
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No. of Shares (eoy) (m)
Diluted no. of shares outstanding (m)
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Current P/e ratio
The erstwhile 3 Tata Electric Companies, i.e. Andhra Valley, Tata Hydro-Electric and Tata Power, were recently merged into one single entity under Tata Power. In effect, Tata Power is the new name of the merged Tata Electric Companies. For making the results comparable, we have taken the previous year figures of the erswhile 3 Tata Electric Companies and merged them.
Tata Power's bottomline was also hit because of a 53% decline in its other income coupled with 21% jump in its interest costs in 3QFY01.
On a nine month consolidated basis, Tata Power's results look much better. Turnover has surged 30% YoY. But a 36% jump in expenditure has resulted in the company declaring only a 5% growth in its bottomline. On a nine month basis, the tax provisioning is down by a marginal 11% (unlike its 3QFY01). Therefore, the performance on a nine month basis is much more creditable.
The stock trades at a P/e multiple of 5.2 times its nine month FY01 annualised earnings. Though the results of Tata Power are not very inspiring, however, given that the P/e multiple for the stock is on the lower side, the stock is likely to gain strength. Also, the economies of the merger are yet to show effect. Once they do, the expenditure is likely to get pruned.
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