Tata Power Company (TATAPOWER) Q4 06/07 earnings summary

Executive summary

• FY07 electricity sales reached 14,422 MUs, while standalone PAT hit a record Rs. 696.80 crore; reported earnings included a reversal of prior-year tax provisions and a tariff rebate.

• Growth strategy targets threefold expansion over five years, backed by large generation projects, coal supply investments, transmission and renewable capacity.

Financial highlights

• Standalone revenue was Rs. 4,715.32 crore, up 4% YoY; operating profit fell to Rs. 723.44 crore from Rs. 835.46 crore, and PBT declined to Rs. 586.01 crore from Rs. 747.45 crore.

• Standalone PAT rose 14.13% to Rs. 696.80 crore; basic EPS increased 17.19% to Rs. 34.02.

• Rs. 181.74 crore of prior-year tax provisions was reversed; Rs. 223.94 crore, including that tax adjustment, was booked as a consumer rebate, weighing on reported revenue and operating profit.

• Consolidated total income reached Rs. 6,744.34 crore versus Rs. 5,938.48 crore; profit after tax, minority interest, associates and appropriations was Rs. 736.78 crore versus Rs. 712.11 crore.

Outlook and guidance

• Mundra UMPP units are committed for commissioning progressively from H1 FY13 to mid-FY15; earlier completion is targeted, with financial closure targeted in FY08.

• Maithon’s 1,050 MW project was expected to reach financial closure in FY08 and commissioning in H1 FY11.

• Trombay’s 250 MW expansion, costing Rs. 990 crore, was scheduled for H2 2008; the 100 MW diesel capacity was scheduled for early 2008 after land acquisition delays.

• Wind capacity of 40.3 MW was planned for commissioning in the coming year, taking commissioned capacity to 102.4 MW.

• Longer-term growth depends on timely approvals, land acquisition, fuel allocation and distribution reforms; imported-coal projects also require adequate port capacity.