Target: ₹490

CMP: ₹413.65

Tata Power reported Q4-FY24 net consol revenue of ₹15,840 crore(+27 per cent y-o-y, +5% JMFe) and EBITDA of ₹2,700 crore(+23 per cent y-o-y, +3 per cent JMFe) led by higher sales across Odisha discoms and capacity addition in renewables. Reported PAT/ Adj. PAT came in at ₹1,040 crore(+11 per cent y-o-y, +25 per cent JMFe)/₹890 crore (+15 per cent y-o-y, +7 per cent JMFe) due to sale of subsidiaries and JVs.

The company continues to benefit from quick turnaround of Odisha discoms, expansion of RE portfolio and operationalization of Mundra. We continue to believe in it’s growth story involving venturing into brownfield pumped hydro storage, expanding transmission business beyond distribution, emergence of rooftop solar, and visible resolution of the Mundra issue. : The company’s Mundra plant continues to operate under Section-11 (currently applicable up to Oct’24) with PLF of 56% and 70 per cent availability.

 The power demand continues to surge and witnessed a 8%YoY growth in FY24. The management believes this trend to continue at least for the next 2-3 years. The coal prices remains stable for last 6-8 months and are likely to remain stable going forward. 

We continue to maintain Buy, with a SOTP-based TP of ₹490/share.

Published on May 9, 2024