Tata Power Will Surprise Investors With Future Performance: CEO Praveer Sinha
Signage for Tata Power Co. stands in Jamshedpur, Jharkhand, India. (Photographer: Anindito Mukherjee/Bloomberg)

Tata Power Will Surprise Investors With Future Performance: CEO Praveer Sinha

Tata Power Ltd. will surprise its investors with performance in the future as deleveraging is complete and balance sheet is very healthy, according to its head.

The debt-equity ratio has come down, Praveer Sinha, managing director and chief executive officer, said in an interview to BloombergQuint. The company is on a growth track, especially in the transmission and distribution business and the renewables segment, he said. The ongoing fiscal 2021 will see good performance across parameters, including financial metrics, he said.

Q2 Earnings (YoY)

  • Revenue rose 8% to Rs 8,289.8 crore against an estimate of Rs 7,510 crore.
  • Net profit rose for the fourth straight quarter, growing 8.4% to Rs 279.6 crore against the estimated Rs 317 crore.
  • Operating profit fell 11.2% to Rs 2,001.2 crore against the estimated Rs 1,929 crore due to higher employee costs and higher cost of power purchased.
  • Margin fell 520 basis points to 24.1% against an estimate of 25.7%.
  • Net debt-to-equity fell from 2 as of March to 1.52 as of September.

Highlights From The Interview

  • Tata Power has submitted three bids for power distribution in Odisha. Bidding for union territories to also start.
  • Mundra under-recovery has fallen from 90 paise to 32 paise a unit in last two years, aided by efficient coal sourcing.
  • The company expected to benefit from soft coal prices across the world.
  • Mundra debt is expected to come down from Rs 8,000 crore to Rs 4,000 crore.
  • Expects Rs 6,000-7,000 crore revenue from solar EPC segment in fiscal 2021.
  • Order backlog is almost Rs 9,000 crore and will cross the Rs 10,000 crore mark next month.
  • Internal target is to add capacity of 2,000 megawatts every year and a similar quantity for clients.
  • Looking to increase solar capacity by four to five times in the next five years.
  • Most divestments under the deleveraging exercise have been completed and the company has received the money.
  • Renewables InvIT’s due diligence on and investors have shown interest.
  • The company expects a binding offer by December and documentation and approvals from the regulator and the shareholders in the fourth quarter ending March.

Watch the full interview here:

Also read: Motilal Oswal: Tata Power Q2 Beat Estimates As EPC Businesses Recover; Risk Reward Favourable

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