Tata Power Shares Slide Ahead of Q4 Earnings as Mundra’s Losses Weigh Heavily

Tata Power share price breaks ahead ahead of fourth-quarter results.

Shares of Tata Power fell about 1% in early trade on May 4 ahead of the energy company’s fourth-quarter results. Investors feared that Tata Group Plc’s earnings, expected to be reported later in the day, would be impacted by losses at its Mundra plant, reflected in the negative sentiment.

At 10:07 am, Tata Power was quoted at Rs 203.05, down Rs 0.75, or 0.37%. Its volume of 172,806 shares was down 62% compared with its five-day average of 457,348 shares.

While the stock is down about 2% this year, it is returned nearly 600% over the past three years.

Sharekhan expects Tata Power to report strong year-on-year earnings growth due to a low base but lower net profit as its 4,000 MW Mundra power plant operated for a few days in the March quarter and as coal realization slows.

“We expect higher losses at Mundra as the plant is barely operational in the fourth quarter of FY2023,” Kotak Institutional Equities said.

Analysts pointed out that better contributions from the renewable energy sector will support the earnings of energy companies. Tata Power has a generating capacity of 14,076 megawatts, 37% of which comes from clean energy.

Even Kotak Institutional Equities expects renewable portfolio earnings to benefit from Tata Power Solar’s higher capacity base and strong execution.

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