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Tata Power: Higher regulatory & taxation costs hit bottomline - Views on News from Equitymaster
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  • Dec 28, 2015 - Tata Power: Higher regulatory & taxation costs hit bottomline

Tata Power: Higher regulatory & taxation costs hit bottomline
Dec 28, 2015

Tata Power declared results for the quarter ended September 2015. The company's standalone revenues rose 16.3% YoY while net profits declined by 9% YoY during the quarter. Here is our analysis of the results.

Performance summary

  • Standalone revenues rose 16.3% YoY during 2QFY16.
  • Operating profits grew 82.8% YoY during the quarter led by lower fuel cost. Fuel cost as a percentage to sales reduced by 10% YoY for half year ended September 2015.
  • However, net profit declined by 9.1% on a YoY basis on account of lower other income and higher regulatory & tax expenses.

Standalone financial performance

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 19,914 23,161 16.3% 42,532 45,107 6.1%
Expenditure 15,114 14,386 -4.8% 33,052 29,578 -10.5%
Operating profit (EBDITA) 4,800 8,775 82.8% 9,479 15,529 63.8%
EBDITA margin (%) 24.1% 37.9%   22.3% 34.4%  
Other income 2,634 1,792 -32.0% 5,279 4,043 -23.4%
Depreciation 1,458 1,656 13.6% 2,874 3,298 14.7%
Interest 2,559 2,762 7.9% 5,080 6,182 21.7%
Gain/ (Loss) in exchange 474 189 -60.2% (906) (322) -64.5%
Profit before tax & rate regulated activity 2,942 5,960 102.5% 5,898 9,770 65.7%
Regulated income/ (expense) 570 (1,980) -447.4% 1,375 (1,814) -231.9%
Tax 449 1,195 166.1% 1,650 2,748 66.5%
Effective tax rate 15% 20%   28% 28%  
Profit after tax/(loss) 3,063 2,785 -9.1% 5,623 5,209 -7.4%
Net profit margin (%) 15.4% 12.0%   13.2% 11.5%  
No. of shares (m)         2,704.8  
Diluted earnings per share (Rs)*         3.6  
Price to earnings ratio (x)         18.9  

(*On a trailing 12-month basis)

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