InvestorQ : What explains the recent spike in profits in Tata Power?
sara Kunju made post

What explains the recent spike in profits in Tata Power?

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Mary Joseph answered.
2 months ago
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The power stock of the Tata Group had been languishing for a long time. In the past few months, Tata Power has emerged as one of the top performers in the stock markets. For the September quarter, Tata Power reported a 50% increase in net profits at Rs.421 crore even as the total sales revenues for the quarter increased by a healthy 18% to Rs.9,810 crore. The stock has till date rallied more than 5 fold and still counting with demand picking up.

The spurt in profits in the quarter was largely attributable to the savings in finance costs or interest charges apart from improved performance in the renewables business. On the downside, the EBITDA fell 23.9% to Rs.1,732 crore but that was temporary due to higher coal prices. To an extent, this was offset by the profits booked by captive coal mines. Renewables today account for 32% of Tata Power’s portfolio and that share is expected to spike to 80% by year 2030.

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