Tata Power share price falls 3% after Q2 results; time to buy the stock?

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Tata Power share price declined nearly 3% in early trade on Thursday after the company reported its earnings for the quarter ended September 2023. Tata Power shares fell as much as 2.96% to ₹247.35 apiece on the BSE. Tata Power Company reported a growth of 8.79% in its consolidated net profit for the July-September quarter on a year-on-year (y-o-y) basis at ₹1,017.41 crore.

The company’s revenue in Q2FY24 rose 9% YoY to ₹15,442 crore. EBITDA jumped 75.5% to ₹3,090.4 crore from ₹1,760.5 crore, while EBITDA margin increased to 19.6% from 12.5%, YoY. Read here: Tata Power reports 9% growth in net profit for Sep qtr However, Tata Power Q2 results failed to impress analysts as they maintained their bearish calls on the stock.

Kotak Institutional Equities said Tata Power’s Q2FY24 profit of ₹8.7 billion benefited from higher plant utilization at Mundra under Sec 11 tariffs, although the weakness in coal profits continued to weigh on earnings. “The extension of Sec 11 tariffs up to June 2024 as well as the bottoming of the prices of imported coal will likely reduce near-term earnings volatility, with incremental growth hinging on profitable contribution from the renewable business," said the brokerage firm. (Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) It maintained a ‘Sell’ rating on Tata Power shares and revised the target price to ₹220 per share from ₹200 earlier as it factors in the extension of Sec 11 order for Mundra, new capacities for renewable assets and stable earnings from coal mines.