Tata Power rose 1.42% to Rs 53.70 after consolidated net profit jumped 10.3% to Rs 268.10 crore on 16.9% fall in net sales to Rs 6,452.99 crore in Q1 June 2020 over Q1 June 2019.
Revenues dropped mainly due to lower power demand, delay in solar EPC businesses on account of COVID-19 and lower coal FOB prices. However, the company maintained stable performance despite lower profits from solar EPC businesses mainly on account of lower financing cost and stable performance across clusters. The company reported a strong cash generation due to strong collection and tighter control over working capital.
Consolidated profit before tax (PBT) declined 21.9% to Rs 457.45 crore in Q1 June 2020 as against Rs 586.02 crore in Q1 June 2019. Current tax expense for the quarter slumped 64.7% to Rs 90.85 crore as against Rs 257.61 crore in Q1 June 2019. The Q1 result was declared post trading hours yesterday, 12 August 2020.
The Q1 FY21 consolidated EBITDA stood at Rs 2,037 crore including renewable EBITDA of Rs 588 crore as compared to Rs 663 crore in Q1 FY20 mainly due to delay in the solar EPC projects due to COVID-19. During the quarter, Tata Power won new renewables bids totaling 220 MW (megawatt). The company's solar EPC order book stands at Rs 8,700 crore.
Commenting on Tata Power Co.'s Q1 performance, Praveer Sinha, the chief executive officer (CEO) and managing director (MD) of Tata Power, has said that: "All our business clusters have reported a robust performance despite the challenges presented by the ongoing pandemic. We aim to continue our progress in our low carbon journey by achieving 50% generation from clean and green sources by 2025 and set new benchmarks in operational efficiencies. The proposed Renewable InvIT, will be the growth engine and we intend to grow this to be India's largest renewable InvIT. At present, it has about 2.6 GW of operating plants and 1.5 GW of capacity in pipeline taking the total capacity to 4.1 GW. This InvIT provides the option to recycle capital once the assets are operational. Further, the InvIT strategy enables Tata Power to raise capital at lower cost post stabilization of assets and grow the portfolio whilst we deconsolidate our debt. Apart from adding capacity in the renewable generation in the next five years, we will also be scaling the Solar Cells & Modules Manufacturing business along with the solar EPC business."
"Moving forward, the company also plans to scale-up the growth of the consumer-facing energy solution businesses like EV Charging, Smart Metering, Retail Rooftop Solar, Solar Pumps, Home Automation and Solar Micro grids in rural areas. On 1 June 2020, Tata Power acquired CESU distribution in Odisha, doubling the consumer base to 5 million in the distribution segment. The aim is to become a leader in distribution business space by evaluating similar opportunities and achieving 10 million consumer base over the next five years. The board also approved a scheme to merge CGPL, TPSSL and Af-taab with the parent company. CGPL has already suffered large losses and is facing difficulty in financing its operations. Given the inordinate delay in resolution of the tariff matter, the merger will provide relief through direct support from the parent company. The company continue to be in discussion with various state governments and state discoms. We do hope that the State Governments will take a practical view and resolve the PPA amendment issue in the interest of all stakeholders," he added.
Tata Power Co. is India's largest integrated power company and, together with its subsidiaries & jointly controlled entities, has an installed/ managed capacity of 12,742 MW.
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