Tuesday, August 19, 2008

Stock Idea: TATA POWER

Tata Power has a presence in all the segments of the power sector viz generation (thermal, hydro, solar and wind), transmission and distribution. The company has posted a consistent performance for the first quarter ended 30th June 2008. Its net revenues, YoY, rose 34.05 % at Rs.2026.13 crore. Sales volume rose by 1.45% at 4115 MUs against 4056 MUs in the corresponding period last year.

PBT was up 17% at Rs.266.84 crore. PAT for the quarter stood at Rs.190.55 crore. The company undertook change in the accounting method during the quarter. Regulatory adjustments which used to be made on an annual basis in the fourth quarter would now onwards be made on a provisional basis every quarter. But for this, the PAT would have been at Rs. 210.55 crore. The PAT for the corresponding period last year was Rs.190.20 crore.

One major victory for the company was winning the Court judgement in its favour to supply power to retail consumers in Mumbai, irrespective of consumption limits. The Supreme Court allowed Tata Power to supply electricity to retail consumers having a requirement of 1,000 KV or less in Mumbai, rejecting Reliance Energy's contention that Tata Power had the licence to supply power to only bulk customers.

The company has acquired a 26% stake in Dagachhu Hydro Electric Power Project, while Tata Power Trading has negotiated to purchase all the power generated from the project for a period of 25 years and the power would be delivered at the India-Bhutan border.

The company’s 4000 MW Ultra Mega Power Project (UMPP) at Mundra is on fast track and has established a global footprint by acquiring 30% stake in Indonesian Coal Mines. It has successful public-private partnerships in generation, transmission and distribution- North Delhi Power Limited with Delhi Vidyut Board for distribution in North Delhi, ‘Powerlinks Transmission Ltd.’ with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro project in Bhutan to Delhi and ‘Maithon Power Ltd.’ with Damodar Valley Corporation for a 1050 MW Mega power project.
The stock price has been range bound between Rs.1000-1050 over the last one month. Currently at Rs.1035, best to stay invested; a bankable power stock.
Source: sptulsian.com


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