Tata Power falls 2.5% on muted Q3 profit, revenue grows 6.2%

Shares of Tata Power fell nearly 3 percent at the open on February 12 on the NSE after the company reported muted post-tax profit for Q3FY24. The results were announced after the market hours on February 9. At 9:20am, the stock was trading at Rs 382.50.

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For Q3FY24, Tata Power reported a net profit of Rs 1,076.12 crore, a 2 percent year-on-year increase from Rs 1,052.14 crore. Revenue grew 6.2 percent to Rs 15,294.13 crore compared to Rs 14,401.95 crore in the previous fiscal. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) jumped 20 percent to Rs 3,060.55 crore from Rs 2607.61 crore.

Brokerage firm CLSA has a 'sell' call on Tata Power with a target price of Rs 249 per share. According to the brokerage, the company reported a weak Q3 due to net long coal position and weak renewable independent power producer profitability. Key message from Q3 was that Indonesian Coal saw a big PAT decline after being a key profit driver over the last two years. CLSA added that PAT (Ex-Treasury) also fell for renewable independent power producers due to lower PLF but EPC did well.

Morgan Stanley has an 'underweight' call on Tata Power with a share price of Rs 213. According to the brokerage, Q3 earnings miss was driven by slower growth in regulated business and lower margins in Utility Scale Renewables. Key positives for the business, according to Morgan Stanley were the solar EPC business execution and improved profitability of coal JV in Q3.

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