Tata Power Swings Into The Red On One-Time Docomo Hit

Tata Power Company Ltd. reported a loss in the three months ended March on the back of a one-time hit from parent Tata Sons Ltd.’s settlement with Japanese telecom company NTT Docomo Inc.

The power generation company reported a Rs 262.4 crore loss compared to a Rs 21.6 crore profit in the same quarter last year, according to its stock exchange filing. Analysts tracked by Bloomberg had expected the company to report Rs 462 crore profit. Revenue declined 1.8 percent to Rs 7,166.8 crore, below the consensus estimate of Rs 8,121 crore.

Tata Power took an exceptional expense of Rs 651.4 crore for the arbitration award to Docomo. In April, the Delhi High Court had allowed Tata Sons to pay the Japanese firm $1.17 billion, to pave the way for the latter’s exit from the joint venture firm Tata Teleservices Ltd. Tata Power holds 7 percent stake in Tata Teleservices.

Operating income fell 1.8 percent to Rs 1,346.7 crore, while the operating margin remained flat at 18.8 percent. Had it not been for the one-time hit, the profit for the quarter would have been Rs 389 crore, buoyed by the performance of the coal and renewable energy businesses, Tata Power said in its media statement.

Revenue from the core power business fell 12.3 percent over last year even as income from other segments including renewables, doubled to Rs 1,471 crore. The company added 1,350 million watts of renewable capacity, largely through the acquisition of Welspun Renewables Energy Pvt.

Tata Power shares rose as much as 3.2 percent higher to Rs 86.4 apiece, before paring gains and closing 0.5 percent higher.