Tata Power's Q4 Numbers Don't Impress Enough As Shares Tank Early

Shares of Tata Power were falling on Thursday after the energy firm’s fourth-quarter revenue missed street expectations.

What Happened: Tata Power’s net profit grew 11.38% to ₹1,045.69 crore in the fourth quarter, up from the ₹938.81 crore it earned in the same quarter last year. The figure was higher than analyst estimates of ₹909 crore.

The Tata firm’s revenue came in at ₹15,846.50, which was 27.24% higher than the ₹12,453.76 topline number it had posted last year. The figure missed street expectations of ₹16,271 crore.

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The company’s board also recommended a dividend of ₹2 per share. The record date for the dividend payment is Thursday, July 4, 2024.

Brokerage View: Kotak Securities said the bottomline growth was modest and expectations remained elevated. The brokerage maintained a “sell” rating on the stock with a fair value target price of ₹265.

The brokerage highlighted that the Tata firm’s lower coal energy earnings were partially mitigated by dividend income and that growth expectations hinge on renewable business. It also mentioned that the company’s valuation was rich at 30 times price-to-earnings.

Outlook And Commentary: The management also provided outlook, wherein it said 42% of capex would be spent on renewables between FY25-27 and estimated a capex of around ₹60,000 crore to ₹71,000 crore till FY27.

The company aims for its clean energy portfolio to touch 15 gigawatts by FY27 and aims for around 70% of capacity from non-fossil-based fuels by 2030.

Price Action: Tata Power’s share price was down 2.03% at ₹426.35 near the start of trade on Thursday.

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