MUMBAI: Shares of Tata Power jumped 6.9% after the company reported a two-fold year-on-year ump in its January-March consolidated net profit to ₹475 crore.
Consolidated net profit in the year-ago quarter was at ₹172 crore.
At 0105 pm, the stock traded 5.4% higher at ₹34.10, while the benchmark Sensex was up 0.9% at 30478.56 points.
Net profit rose due gain on sale of Cennergi investment offset by impairment provision in SED & reversal of MAT credit due to transition to new tax regime in the renewables business, the company said.
According to analysts at Motilal Oswal Financial Services, "divestment related measures could aid cash inflow and subsequent debt repayment. Continued capex in renewables and new regulations for Indonesian coal mines concerning tax and royalty could be an overhang."
The brokerage has maintained a neutral rating on the stock with a target price of ₹38.
Consolidated revenue stood at ₹6,881 crore in the fourth quarter of 2019-20 compared with ₹7,597 crore in the corresponding quarter last year. The fall in revenue was due to delay in project execution in solar EPC (engineering procurement and construction) business on account of covid-19, lower power demand and coal price.
Commenting on company's performance, Praveer Sinha, chief executive and managing director, Tata Power said the company's robust performance was supported by excellent performance of renewable business & capacity addition.
The company has approved a final dividend of ₹1.55 per equity share for the year ended 31 March, 2020.
Tata Power is India's largest integrated power company and together with its subsidiaries and jointly controlled entities has an installed and managed capacity of 12,742 MW.