Tata Power share gains more than 1% as groups RE captive projects exceed 1.4GW

Share price of Tata Power company Ltd gained up to 1.78% in morning trades on the BSE on Tuesday following news flow around its subsidiary Tata Power Renewable Energy Ltd crossing 1.4 GW mark in renewable capacity.

Tata Power Renewable Energy Limited (TPREL), a subsidiary of The Tata Power Company Limited, one of the large renewable energy companies in India has crossed the 1.4 GW capacity of group captive projects in last seven months, Tata Power said in its release. It also stated that this achievement is the result of signing Power Delivery Agreements (PDA) with various industries across segments.

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Benefitting from strong power demand in the country, Tata Power performance has remained strong and renewable portfolio has been further lifting its show. Tata Power Company Limited Q2FY2024 reported net profit grew by 9% y-o-y to Rs. 1,017 crore which as per analysts at Sharekhan was led by good performance from the renewable energy (RE) portfolio and decent earnings from Odisha discoms offsetting the decline in coal profits.

Revenue from its Renewables business rose 33% YoY to ₹2146 crore outpacing growth in revenue from Generation and Transmission that were up 3% and 5% respectively.

Tata Power had a robust orderbook and Group captive was picking momentum. The utility scale order book stood at 3.7 GW worth ₹ 15,870 croree with the rooftop solar and group captive order book at ₹ 2,872 crore.

TPREL got 139 MW orders for group captive in Q2FY24 taking the total capacity to 1,445 MW including Tata Steel order of 966 MW hybrid project consisting of 379 MW of solar & 587 MW wind

Analysts at Sharekhan had said that Tata Power’s focus on business restructuring and high growth Renewable business and entry into power transmission would play a crucial role for sustained earnings growth (management targets for 4 times rise in its net profit by FY2027 estimated over FY2022) and improved earnings quality. In addition, management’s business restructuring plans to increase the share of high-growth RE business would drive sustained improvement in ESG scores.

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Analysts as Rupesh Sankhe at elara Securities India Pvt Ltd said that Tata Power seeks to: scale-up Renewable Energy capacity to 15.0GW by FY25 from the current 3.9GW, focus on power distribution, and seize opportunity in solar EPC. We introduce FY26 estimates and retain our positive stance on Tata Powe

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Updated: 21 Nov 2023, 12:57 PM IST