Why Tata Power Shares Are In The Green Even Though Q2-Print Missed Estimates

Shares of Tata Power were down in early trade on Thursday as the firm’s bottom line figure missed analyst estimates for the second quarter, though losses were capped by a decent showing from its solar business.

What Happened: The electricity generation firm posted a net profit of ₹1,093 crore in the quarter ended September, up 7.5% from the ₹1,017.41 crore it earned in the same quarter a year ago. The figure fell short of analyst estimates of ₹1,149 crore.

The Tata Group company’s quarterly revenue came in at ₹15,697 crore, down 0.3% from a topline of ₹15,738.03 crore that it earned in the same period last year. The figure missed analyst estimates of ₹17,522 crore.

However, the company’s margins came in ahead of street expectations. EBITDA increased by 21.2% year-on-year to ₹3,745 crore, surpassing Bloomberg’s estimate of ₹3,117 crore. The EBITDA margin expanded to 23.9%, compared to 19.6% in the same period last year, and exceeded Bloomberg’s projected margin of 18.4%.

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The power major said that its order book in its solar engineering, procurement and construction (EPC) business went up to ₹15,900 crore during the quarter, up from ₹15,500 crore in the preceding quarter. The company has also reached a generation capacity of over 15 gigawatts.

Analyst Reaction: Motilal Oswal maintained its “buy” rating for the stock with a price target of ₹509. The brokerage firm noted that Tata Power delivered a consolidated EBITDA of ₹3,740 crore for the second quarter of FY25, surpassing the brokerage's expectations by 15%.

This strong EBITDA performance was attributed to enhanced solar manufacturing capabilities and improved operational efficiency across various business segments. However, revenue stood at ₹15,690 crore, missing Motilal’s estimates by 18%. Adjusted profit after tax (PAT) came in just 2% below estimates.

Price Action: Tata Power’s share price was up 1.16% at ₹431.95 in early hours of trade on Thursday.

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