Tata Power Q2 profit seen higher by 26% at Rs 544 crore; operational margin at 21.9%

Tata Power is likely to post a strong profit growth of 26 percent at Rs 544 crore for the September quarter, a poll of analysts conducted by CNBC-TV18 has revealed.

The company’s revenue could be up by 3 percent at Rs 7,409 crore against Rs 7,209 crore posted during the same period last year.

At an operational level, the earnings before interest, taxes, depreciation and amortisation (EBITDA) could be up 11 percent at Rs 1,624 crore against Rs 1,462 crore. The operating margin could be higher at 21.9 percent against 20.3 percent year on year.

For the quarter analysts are expecting generation volumes to remain sluggish while realisations are expected to remain flattish. Growth could be led by higher income from renewables, SED and Mumbai circle. It is not expecting any tax reversal like the second quarter of FY17.

On the operational front, it expects EBITDA gets close to break even at Mundra and Maithon. Also, coal prices inched up by 11% QoQ and 31% yoy which should lead to increase in profit from coal SPV, it added.

Among key monitorables for the company are progress on sale of non-core assets, resolution of Mundra power plant and profit of renewables portfolio.