Tata Power Q3 revenue beats market estimates but high input costs weigh on margins

Tata Power reported a 43% jump in consolidated revenue for the three months ended December 2021 but its operating income, margins and profit faced pressure due to high raw material and fuel costs.

Tata Power reported a consolidated net profit of Rs 551.89 crore in December 2021 quarter, up 73.6% year-on-year. Its net profit was Rs 318.41 crore for October-December 2020 and Rs 505.66 crore for July-September 2021.

The company’s consolidated revenue from operations stood at Rs 10,913.14 crore, up 43%. This surpassed analysts’ estimates of a 24-25% growth aided by acquisitions of Odisha power distribution companies and solar EPC business.

Revenue was Rs 7,597.91 crore for October-December 2020 and Rs 9,810.22 crore for July-September 2021.

Other Key Highlights

1) Consolidated EBITDA fell to Rs 1,633 crore from Rs 1,734 crore. Analysts estimated EBIDTA at Rs 1,660 crore.

2) EBITDA margin softened to 14.8% from 22.5% a year earlier. Analysts estimated margins at 17.1%. 

3) Cost of power doubled to Rs 3,631.57 crore during October-December 2021 compared with Rs 1,802.25 crore.

4) Cost of fuel increased 10% from a year earlier to Rs 2,488.91 crore.

5) Consolidated net profit for nine months ended Dec. 31 rose 59% to Rs 1,523 crore.

6) Consolidated revenue for nine months ended Dec. 31 was up 33% at Rs 30,491 crore.

7) Standalone profit after tax slumped to Rs 49 crore from Rs 575 crore a year earlier mainly due to lower dividend income declared by the subsidiaries.

Management commentary

Praveer Sinha, CEO and Managing Director at Tata Power, said the company delivered strong financial performance for the ninth consecutive quarter.

“All our business clusters have contributed significantly despite facing pandemic-related challenges, demonstrating tremendous resilience, strength and agility,” he said.

The company, Sinha said, was committed to focus on key growth areas such as renewables, distribution, and new businesses comprising rooftop solar, solar pumps and EV charging.

“We'll focus on utilising technology to offer smart, green energy solutions and provide world class experience to our 12 million plus customers,” he said.

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