Moneycontrol BureauThe surprising element in Tata Power’s steady performance has been profitability from its mega power project Mundra even as its solar business broke even, says a Nomura report. For the quarter ended March 31, 2016, profit after tax (PAT) for Mundra came in at Rs 9 crore against Nomura's estimate of a Rs 41 crore loss. Sales volume in its coal business came in at 21.4 million tonnes. It was 3 percent above Nomura forecast. Its solar manufacturing business broke even at Rs 4 crore. The company doubled its net profit in the fourth quarter to Rs 360.25 crore on back of low fuel cost and strong operational performance. Lower tax incidence helped pre-exceptional PAT edge sharply higher. What also worked for the company were its moderate profits from the coal business quarter-on-quarter. The company’s consolidated earnings before interest, tax, depreciation & amortization (EBITDA) surpassed brokerage’s estimates by over 6 percent. Nomura, while maintaining a buy call on the stock at its current market price, says that management commentary on sustainability of Mundra’s profitability and coal business will be closely watched. The brokerage expects the stock to react positively to its earning numbers. “Prima facie, potential consensus earnings upgrade is in the offing,” it said.
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