Shares of Tata Power surged by two per cent on the National Stock Exchange (NSE) today, driven by investors' anticipation of robust Q2 FY24 results. The power generator's net profit is expected to surge by 18% YoY to Rs 970 crore ($129 million), bolstered by solid operations and expansion in its coal business.
The company's consolidated revenue for the period is projected to rise by 12.6% YoY to Rs 15,800 crore ($2.1 billion), reflecting the strong performance of the renewables and distribution sectors. Analysts predict an EBITDA of Rs 2,380 crore ($317 million), marking a substantial 35% growth YoY, and an improved margin from last year's 12.55% to 15%.
This anticipated strong performance comes after a successful Q1 FY24, during which Tata Power recorded a consolidated net profit increase of 29% YoY to Rs 1,141 crore ($151 million) and a revenue growth of 5.8%. The company's shares have been outperforming the S&P BSE Sensex index and aligning with the S&P BSE Power sectoral gauge.
The positive investor sentiment surrounding Tata Power underscores the company's continued growth trajectory in its core and emerging sectors. The firm's expansion into the coal business and its robust operations in renewable energy and distribution have been key drivers of its financial performance.
InvestingPro Insights
InvestingPro's real-time data and tips provide valuable insights into Tata Power's financial performance and investment potential.
InvestingPro Tips highlight that Tata Power's strong earnings should allow the company to continue its dividend payments, a streak that has been maintained for 24 consecutive years. This is an important aspect for investors seeking regular income from their investments. Additionally, the company has been profitable over the last twelve months, a trend that analysts predict will continue into the current year.
The company is also trading at a low P/E ratio relative to its near-term earnings growth, suggesting that the stock could be undervalued. This is a useful tip for potential investors looking for bargain opportunities in the Electric Utilities industry, where Tata Power is a prominent player.
InvestingPro's platform offers several additional tips related to Tata Power's performance and potential, further aiding investors in making informed decisions.
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