Tata Power crawls higher after turning around solar business

Tata Power Company rose 0.38% to Rs 79.10 at 14:00 IST on BSE after the company announced that it has turned around solar business with net sales surging by 52% in FY 2017 and more than two and a half times in 2 years.

The announcement was made during market hours today, 24 August 2017.

Meanwhile, the S&P BSE Sensex was up 34.06 points, or 0.11% to 31,602.07.

On the BSE, 2.97 lakh shares were traded in the counter so far, compared with average daily volumes of 2.6 lakh shares in the past one quarter. The stock had hit a high of Rs 80.85 and a low of Rs 79.10 so far during the day. The stock had hit a 52-week high of Rs 91.25 on 3 April 2017. The stock had hit a 52-week low of Rs 67.10 on 9 November 2016.

The stock had dropped 4.07% in five sessions to Rs 78.80 yesterday, 23 August 2017, from a close of Rs 82.15 on 16 August 2017.

The stock had underperformed the market over the past one month till 23 August 2017, falling 5.4% compared with 1.44% decline in the Sensex. The scrip had also underperformed the market in past one quarter, falling 1.93% as against Sensex's 3.96% rise. The scrip had also underperformed the market in past one year, gaining 5.42% as against Sensex's 12.78% rise.

The large-cap company has equity capital of Rs 270.48 crore. Face value per share is Re 1.

Tata Power's solar business, Tata Power Solar, India's largest integrated solar company, announced that the company has witnessed an increase in its net sales by 52% to touch a new height of Rs 2262 crore in the year ended 31 March 2017 (FY 2017) over FY 2016. The company increased its revenue by more than two and a half times in just two years. The profit after tax also increased by 330% during FY 2017, a remarkable achievement considering the fact that solar engineering, procurement and construction (EPC) is extremely low margin and the pressures faced by the domestic manufacturing sector.

A key strategy that drove this change was shifting from product focus to service focus (EPC). Up until 2012-13, Tata Power Solar core business was manufacturing with a sizable focus on lighting products and some share of thermal products. Subsequently the company significantly increased focus on EPC, where it had built strong competencies, in a short span of time. The company became a strong contender in the utility as well as rooftop space and today Tata Power Solar is the leader in EPC for large utility projects. It has also been the biggest rooftop player for 4 years in a row.

Tata Power Solar, in-line with Government's 'Make in India' initiative, made significant expansion and modernization of its cell and module facility in Bengaluru. The second expansion within 2 years doubled the company's module capacity to 400 megawatts (MW), and increased its cell manufacturing capacity to 300 MW. The efficiency level of the cells and modules coming out of these lines are among the best in the world, company added.

Tata Power Company's consolidated net profit jumped 125.9% to Rs 163.78 crore on 1.9% rise in net sales to Rs 6968.62 crore in Q1 June 2017 over Q1 June 2016.

Tata Power is India's largest integrated power company with a significant international presence. The company has a presence in all the segments of the power sector viz generation (thermal, hydro, solar and wind), transmission, distribution and trading.

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