Tata Power – No Power in Results

Tata Power 4Q10 Cons. Rec. PAT at Rs3.5bn vs loss Rs931mn led by +12%YoY revenue (Coal revenue +27%YoY) with EBITDA +33%YoY on +259bp margin & lower tax Rs859mn vs Rs4.3bn despite 42% higher depreciation. However, Cons. Rep PAT was Rs9.5bn vs loss Rs849mn on Rs5.9bn of exceptional income vs Rs82mn in 4Q09. 4Q10 Power Generation 3.8bu (+7%YoY) while sales volume 3.7bu (+7%YoY).

Lower fuel costs (recoverable) and a change in fuel-mix led to a decline in revenue despite the rise in generation. Adjusted net profit rose a modest 3% yoy to Rs6.9bn. Realization slipped to Rs4.10/kWh (from Rs4.77) due to lower fuel costs and less power purchased.

Consolidated sales increased 5% yoy to Rs190bn with power and coal segments growing 5.4% and 5.8%, respectively. EBITDA margin expanded 280bp yoy chiefly due to lower fuel costs. Net profit increased 61% yoy to Rs19.7bn due to the lower effective tax rate.

Realization for 4QFY10 increased to US$62.7/ton, just above the FY10 average of US$60. Production cost increased to US$34 (US$32 for FY10). Company guides to maintain current production level (55m ton in FY10) in FY11.

EPS Estimates for FY 11 and FY 12 Respectively
Anand Rathi – 77 and 93
ENAM – 78 and 94
Credit Suisse – 86 and 91
Kotak – 67 and 86