Tata Power’s share price was under pressure on Wednesday after its Q1 earnings came in slightly lower than expected and brokerages were mixed on the energy firm.

What Happened: The Tata Group company’s consolidated net profit attributable to owners came in at ₹970.91 crore for the quarter ended June 30, down slightly from the ₹972.49 crore it posted in the same quarter last year and slightly shy of analyst estimates of ₹1,005 crore.

The company’s quarterly revenue sat at ₹17,293.62 crore in the quarter, up 13.7% from the ₹15,213.29 crore booked a year ago. The figure fell short of street estimates of ₹17,460 crore.

The company also announced that it would invest ₹830 crore to acquire a 40% stake in a hydropower project in Bhutan.

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Analyst Views: Investec maintained a “hold” rating on Tata Power and raised the target price to ₹467 from ₹412. The company's profit growth was supported by improved plant load factor at Mundra and higher module sales, the brokerage noted. However, it added that it remained concerned about execution delays and issues at the Mundra plant.

While EBITDA improved across the Orissa business, credit losses due to lower collections hit segmental profit, the brokerage mentioned.

CLSA held its “underperform” call on the stock with a price target of ₹297. The brokerage said the stock was expensive at its current price-to-earnings multiple. The brokerage also expects continued declines in profit after tax due to lower wind utilisation rates.

On the other hand, Axis Capital maintained an “add” rating on Tata Power and hiked the target price to ₹500 from ₹358 earlier.

Tata Power is arguably the most integrated utility in India with strong management bandwidth, the brokerage said. It sees the firm as the frontline beneficiary of a likely push in the discom privatisation over the medium term.

Price Action: Tata Power’s share price was down 1.59% at ₹429.75 in early trade on Wednesday.

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