Tata Power continues financial ascent with 9% PAT growth in Q2 FY24

Tata Power has announced its financial results for the quarter ending September 30, 2023, marking the 16th consecutive quarter of Profit after Tax (PAT) growth. The company’s robust financial performance is underscored by a significant 9% year-over-year increase in consolidated PAT, reaching ₹1,017 crore. This growth is anchored by the company’s strong balance sheet, operational excellence, and the effective synergy of all business clusters.

Revenue and EBITDA Achieve Remarkable Growth

Tata Power‘s revenue also experienced a 9% rise, amounting to ₹15,442 crore, predominantly fueled by the Generation, Transmission & Distribution segments of its core businesses. The impressive earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q2FY24 leaped by 51%, culminating in an unprecedented first half EBITDA of ₹6,092 crore.

Core Businesses: The Backbone of Tata Power’s Financial Success

The core businesses of Tata Power have been instrumental in this quarter’s earnings, contributing a substantial 84% to the company’s PAT. This quarter, the overseas joint ventures and coal mining operations have seen a reduced impact on the Company’s financials.

Strategic Business Developments and Clean Energy Milestones

CEO and Managing Director Dr. Praveer Sinha expressed his satisfaction with the quarter’s performance, highlighting the company’s financial discipline and diversified business resilience. Tata Power is focusing on new growth areas, including a Greenfield solar cell and module manufacturing plant in Tamil Nadu, which has already produced its first module. The Company is also making strides in enabling a green energy transition, aiming to roll out the first cell by Q4FY24.

The clean energy portfolio of Tata Power reached a 5,500 MW milestone during Q2 FY24, accounting for 38% of the total installed generation capacity. Additionally, the Distribution Business in Odisha has seen improvements in cash flow and reductions in AT&C losses. The Company is positioning itself to leverage Pumped Hydro Storage projects, having signed an MoU with the Maharashtra Government for the development of a 2,800 MW project.

Strengthening Financial Ratios and Moody’s Upgrade

Reflecting a solid foundation, the Company’s balance sheet has continued to strengthen, with the Net Debt to Underlying EBITDA ratio improving to 2.65x and the Net Debt to Equity ratio standing at 1.02x. In light of these strong fundamentals, Moody’s has upgraded Tata Power’s corporate family rating to Ba1 while maintaining a stable outlook.

As Tata Power navigates through the dynamic energy sector, its financial results for Q2 FY24 signal a stable trajectory of growth, resilience, and strategic expansion into promising areas of clean energy development.