The consolidated revenue for the quarter, however, slipped 9.4 per cent to Rs 6,881 crore, as compared to Rs 7,597 crore in the corresponding quarter last year mainly due to delay in project execution in solar EPC business on account Covid-19, lower power demand and lower coal price, the company said.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter was up 6 per cent at Rs 2,013 crore as compared to Rs 1,901 crore during the previous quarter, mainly due to lower losses in Mundra on account of lower FOB (free on board) price of coal.
"All our businesses and operations have performed exceptionally well. Our robust performance is supported by the excellent performance of renewable business & capacity addition," said Praveer Sinha, CEO & MD.
Adding, "Globally, India is following one of the most stringent lockdowns with all economic activities coming to a halt for nearly two months now. We are witnessing a drop in demand by almost 30% compared to 2019 in our distribution businesses. Though this impacts our topline, almost all Tata Power's assets are under either regulated businesses or through fixed price long term contracts on the take or pay basis. Thus in our business, the return profile covers our fixed costs and provides us assured returns."
In a results review note, analysts at Motilal Oswal Financial Services (MOFSL), note that net debt of Tata Power
has reduced, but still remains elevated. The company’s divestment related measures could aid cash inflow and subsequent debt repayment. "However, with continued Capex in renewables and given the current environment, we await further steps on this front. Besides, upcoming new regulations for Indonesian coal mines (concerning tax and royalty) could be an overhang," they wrote.
The brokerage further says that the stock has slipped around 40 per cent over the past three months and hence, it looks attractive. However, it awaits further steps on the monetisation front, and the company to emerge out of the current situation without stretching debt. It has maintained a "Neutral" rating on Tata Power with the target price of Rs 38.