TEC: Getting its act together - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

TEC: Getting its act together

Sep 27, 2000

Tata Electric Companies (TEC) plans to hike its stake by 20 percent in Mangalore Power Company (MPC) to 50 percent, at a total value of about Rs 8.6 billion (US$ 187 million). MPC is setting up a 1000 MW thermal power plant at Mangalore. This sort of acquisition news would have sent the stock price of any other leading company, in any other sector (especially TMT), soaring. But the markets had no reaction to the news. The acquisition will go a long way in giving TEC a national presence. TEC has been predominantly present in Mumbai, Maharashtra. Only in the recent years has it shown an inclination to spread its wings into states like Orissa and southern India. It is planning to acquire at least two of four IPP projects, either singly or jointly in Madhya Pradesh, Karnataka or Tamil Nadu. The projects have capacities of around 500 MW each and were owned by international companies, who are looking to exit.

TEC has been undergoing a lot of transition lately. The Tataís recently decided to merge the three entities viz. Tata Power, Tata Hydro and Andhra Valley as one. Mr. Adi Engineer was recently appointed the managing director, a position that was vacant for quite some time. The Tataís are also looking at raising their stake in TEC to over 26%. All these developments underline the Tata Groupís commitment to this company and its focus on the power sector.

TEC has also indicated the possibility of leveraging its power distribution network to venture into telecommunications. Mr. Ratan Tata has also said TEC will spearhead the groupís e-commerce foray. At an analyst meet a few months back, the management had unveiled a whopping Rs 47 bn investment plan till 2003. Projects worth Rs 28.3 billion are already under execution.

Out of this, about 8% or Rs 3.8 bn is slated to go into communications. The company is also looking at setting up a LNG terminal and jetty (proposed investment: Rs 5.5 bn). This LNG investment should bring down its fuel costs.

TEC is slated for a lot of action in the next few years. The only thing that should hamper its growth is the slow moving power sector reforms or its own lack of inertia (for which it has been known). Also, a Reliance backed BSES should provide it solid competition.

At the current price level of Rs 71 the Tata Power stock trades at a P/e multiple of 3.5 times its FY00 earnings. If its forays in communications and IPPs taste success, the stock could see an upward re-rating in the coming months.

Equitymaster requests your view! Post a comment on "TEC: Getting its act together". Click here!


More Views on News

TATA POWER Announces Quarterly Results (4QFY20); Net Profit Up 193.1% (Quarterly Result Update)

May 21, 2020 | Updated on May 21, 2020

For the quarter ended March 2020, TATA POWER has posted a net profit of Rs 3 bn (up 193.1% YoY). Sales on the other hand came in at Rs 66 bn (down 8.4% YoY). Read on for a complete analysis of TATA POWER's quarterly results.

TATA POWER Announces Quarterly Results (2QFY20); Net Profit Up 20.2% (Quarterly Result Update)

Nov 12, 2019 | Updated on Nov 12, 2019

For the quarter ended September 2019, TATA POWER has posted a net profit of Rs 5 bn (up 20.2% YoY). Sales on the other hand came in at Rs 77 bn (up 4.7% YoY). Read on for a complete analysis of TATA POWER's quarterly results.

TATA POWER 2018-19 Annual Report Analysis (Annual Result Update)

Jun 4, 2019 | Updated on Jun 4, 2019

Here's an analysis of the annual report of TATA POWER for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of TATA POWER. Also includes updates on the valuation of TATA POWER.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.


Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms


Sep 18, 2020 (Close)


  • Track your investment in TATA POWER with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks