Tata Power shows a bright spark

Tata Power has a bright spark on Dalal Street today. Figuring amongst the top gainers, the stock opened higher at Rs.79 and is currently 3% up. It is closer to its 52-week low of Rs.70.55 as it has been more down than up.

The market is reacting positively to the company’s Q4 performance wherein it posted a turnaround. It posted a consolidated net profit of Rs.159 crore v/s loss of Rs.145 crore in Q4FY14. This was despite a 7% drop in total income at Rs.8240 crore.

The company has explained that the decrease in total income was on account of lower realisation in coal companies and lower revenue from Trombay Units. While net profit jumped up due to favourable impact of forex in VAT settlement & in coal companies, favourable impact of tariff order in MPL and CGPL's higher contribution due to reduced coal prices and lower depreciation. Consequently, EBITDA has shown a marked improvement, up 8% at Rs.1962 crore and margins have come in pretty strong at 23.8% v/s 20.5%.