Tata Power Company reported Q1 FY09 profits of INR 1.9 bn which is flat y-o-y. However, adjusting for the incentive gains, tax provisions and forex gains, the earnings would be lower by ~ INR 120 mn. This fall can be attributed to lower other income which fell from INR 685 mn to 483 mn y-o-y. The revenues increased 34% y-o-y to INR 20.5 bn on account of higher fuel costs which are passed through to tariff. Fuel cost increased 45% to 12,894 for the quarter on y-o-y basis.
Tata Power’s subsidiary have done exceptionally well in Q1. NDPL PAT is up 20% YoY to Rs339mn. Powerlinks PAT has increased 12% YoY to Rs90mn. Power trading subsidiary has increased its revenue by 160% to Rs4.13bn and PAT by 96% to Rs14.1mn.
All capacity expansion projects are running on time. Specifically Mundra UMPP – Construction is on in full swing and work on boiler and turbine for Unit 1 and 2 has started; Maithon – Ordering of equipment is complete and civil work has started; 250MW Mumbai – CoD will be achieved by October 2008 and Haldia expansion is being commissioned now. Tata Power is expected to report an EPS of Rs 28.8 for FY09.
ABB’s 2QCY08 PAT at Rs1.3bn up 21% YoY was expectations of Rs1.5bn primarily on account of slow sales growth of 15% YoY, led by execution of long cycle orders. Margins have held up well in an inflationary commodity price environment.
Order inflow growth was disappointing at 11% YoY, a clear sign of the difficult macro environment led by double-digit inflation, rising energy costs, volatile commodity prices and high interest rates.
Brokerages have cut earnings estimate for ABB by 8-10% and the company is now expected to report an EPS of Rs 28.77 for year ending Dec-2008.