According to brokerage firm IIFL, the key reasons are the absence of peak power shortages this fiscal and the Centre’s keenness on a long-term resolution for the Mundra tariff issue.
The brokerage has estimated a hit between 5% to 8% to Tata Power’s Profit After Tax (PAT) expectations for the current financial year. For every month of the plant shutdown, the hit to PAT is likely to be between ₹100 crore to ₹150 crore per month.Profit increase from cell-module sale and rooftop execution to more than offset the Mundra hit, it said.
Axis Capital said Tata Power’s management is hoping for a permanent solution to the Mundra power purchase agreement (PPA) with procuring states in the near term. The company can recoup plant availability factor (PAF)-linked charges if the current shutdown is limited to less than one to one-and-a-half months.JM Financial said it expects the company to tie up PPAs with the five beneficiary states — Gujarat, Maharashtra, Rajasthan, Punjab and Haryana.
Mundra operated at plant load factors (PLFs) of 25%, 32% , 56% and 65% between FY22 and FY25, in that order.
CNBC-TV18 has reached out to Tata Power and the ministry of power separately for comments. Their responses are awaited.
Tata Power shares are down 0.57% at ₹399.6 apiece at 10.20 am on Tuesday, July 22. The stock has gained 11.44% in the past six months.
Also Read: Eternal market cap touches ₹3 lakh crore, more valuable than these Nifty bigwigs
