Motilal Oswal Financial Services

13 August 2020

1QFY21 Results Update | Sector: Utilities

Tata Power

Estimate change

TP change

Rating change

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Debt reduces as monetization benefit flows through

Risk-reward favorable; Upgrade to Buy



CMP: INR53

TP: INR66 (+25%)

Upgrade to Buy



Bloomberg

Equity Shares (m)

M.Cap.(INRb)/(USDb)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

12M Avg Val (INR M)

TPWR IN

2,705

143.2 / 1.9

69 / 27

0/2/-10

854

Financials & Valuations (INR b)

Y/E MARCH

2020 2021E 2022E

Sales

291.4 310.2 339.8

EBITDA

79.4 76.5 78.1

Adj. PAT

10.2 10.6 14.7

EBITDA Margin (%)

27.3 24.7 23.0

Cons. Adj. EPS (INR)

3.8

3.3

4.6

EPS Gr. (%)

78.2 -11.6 38.6

BV/Sh. (INR)

66.8 67.8 70.6

Ratios

Net D:E

2.6

1.9

1.8

RoE (%)

5.9

5.4

6.7

RoCE (%)

7.1

7.0

Payout (%)

41.2 39.1 28.2

Valuations

P/E (x)

14.1 16.0 11.5

P/BV (x)

0.8

EV/EBITDA(x)

8.0

7.6

Div. Yield (%)

2.9

2.4

FCF Yield (%)

35.9 28.0 30.5

Shareholding pattern (%)

As On

Jun-20 Mar-20

Promoter

37.2

DII

31.4

27.8

FII

12.9

18.6

Others

18.5

16.3

FII Includes depository receipts

Tata Power (TPWR)’s results reflect the benefit of asset monetization plans

and better WC management as net debt (excl. restricted cash at CESU)

declined to INR444b (from INR471b in FY20).

Divestment-related measures (part receipt of International Shipping

business, Arutmin, and Tata SED) and the infusion of INR26b from

promoters would continue to aid debt reduction. As we build-in

expectations of normalization in its EPC businesses and some WC by FY22,

we view the risk-reward as favorable at current levels. The approval of a

tariff hike at Mundra, possible benefits from the merger of CGPL & Tata

Power Solar with TPWR, and favorable InvIT valuations provide upsides.

Upgrade to Buy, with TP of INR66/sh.

Profits reflect impact on EPC businesses



Adj. PAT stood at INR2.3b (v/s INR2.8b in the previous year), in line with our

est. of INR2.3b. The number largely reflects the impact on its EPC

businesses (Solar EPC and Tata Projects) and lower PAT at S/A, offset by

better working of the Mundra–Coal JV hedge.

Tata Power Solar and Tata Projects reported combined loss of INR0.6b (v/s

profit of INR0.3b in the previous year).

Mundra (EBITDA) and Coal JV (PAT)

rose to INR4.8b (v/s INR4.1b in

1QFY20) due to lower generation at Mundra and lower cost of production

at Coal JV.

RE (ex-standalone)

PAT was broadly flat YoY at INR1.2b.

Net debt (excl. restricted cash at CESU) declined to INR444b (from INR471b

in FY20), led by the monetization of Cennergi and the International Shipping

business, along with better WC management.

Management commentary: Progress on asset monetization



Jun-19

33.0

24.9

26.0

16.1



TPWR’s management noted it had received USD138m of the sale

consideration of USD213m by the end of June, and the balance was

received in July. Additionally, 1) the sale of its Defence business is expected

over the next few months and 2) it expects the InvIT for its Renewable

portfolio to be completed by the end of FY21.

Regarding the Mundra PPA, the co. is in talks with the Gujarat government

post a change in the approval process from the HPC framework to GERC.

TPWR noted it would approach CERC for an amendment upon approval

from Gujarat and Maharashtra.

;

Aniket Mittal – Research Analyst (Aniket.Mittal@MotilalOswal.com)

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Investors are advised to refer through important disclosures made at the last page of the Research Report.

Tata Power

Debt reduction playing out; view risk-reward as favorable at current levels



Net debt declined to INR444b (from INR471b in FY20) on account of asset

monetization and WC management despite the current COVID-19 environment.

While certain clarity is pending with regard to upcoming new regulations for

Indonesian coal mines (concerning tax and royalty), at current levels, we view

the risk-reward as favorable. Divestment-related measures (International

Shipping business, Arutmin, and Tata SED) and approval for the infusion of

INR26b from promoters would continue to aid debt reduction. Debt reduction

should lead to lower interest costs, and with normalization in its EPC businesses

and some WC, we expect EPS to increase at a 9–10% CAGR over FY20–23. The

approval of a tariff hike at Mundra, merger of CGPL & Tata Power Solar with

TPWR, and favorable InvIT valuations provide upsides. Upgrade to Buy, with TP

of INR66/sh.

FY21E

79,340 76,818

3.3

8.6

59,788 58,071

19,552 18,747

24.6

24.4

6,784 6,964

10,940 10,934

1,048

953

2,876 1,802

273

617

1,210

997

3,812 2,182

FY20

FY21E

FY21 vs Est

1Q (%)

81,369 -21

6.6

62,841

18,528

22.8

6,607 -2

10,803

1,007 -13

2,126 43

902

1,061

2,285

Quarterly Performance (Consolidated) – INR m

Y/E March

FY20

Net Sales

76,317 76,778 70,710 66,708

64,530

YoY Change (%)

4.4

2.2

-8.2

-7.7

-15.4

Total Expenditure

54,647 54,218 52,661 50,410

47,217

EBITDA

21,671 22,560 18,050 16,298

17,313

Margins (%)

28.4

29.4

25.5

24.4

26.8

Depreciation

6,200 6,544 6,719 6,583

6,445

Interest

11,439 11,300 11,292 10,907

10,894

Other Income

1,079 1,072

650

672

874

Rate regulated activity

-2,000 -3,490 1,002 2,601

2,185

PBT before EO expense

3,111 2,299 1,691 2,080

3,034

Extra-Ord expense

-1,095

-747

279 5,690

PBT

2,017 1,552 1,970 7,770

3,034

Tax

1,924

520 1,176 1,491

1,894

Rate (%)

MI & P/L of Asso. Cos.

1,612 1,725 1,132 1,465

1,154

Reported PAT

1,704 2,757 1,927 7,744

2,294

Adj PAT

2,799 3,504 1,647 2,054

2,294

*Note: Sum of four quarters for FY20 does not match due to restatements

89,530 291,364 310,218

34.2

-1.4

6.5

70,818 211,936 233,709

18,712 79,428 76,509

20.9

27.3

24.7

7,106 26,336 27,299

10,742 44,937 43,509

1,707

5,626

4,582

-1,887

2,572 11,895 10,282

5,185

4,099

5,185

7,757 15,994 15,468

1,550

8,253

4,334

51.6

28.0

1,325

6,535

4,685

7,531 14,276 15,819

2,346 10,177 10,634

Conference call takeaways



Asset monetization



TPWR received USD138m of the sale consideration of USD213m by the end

of June and the balance in July.



TPWR expects the sale of its Defence business within the next few months.



It expects the InvIT for its renewable assets to be completed by the end of

FY21.



Assets in Zambia and Georgia are also expected to be completed over the

next three to six months.

Availability at Prayagraj stood at 78%. The co. expects to receive a portion of its

receivables as disbursement from the REC+PFC package flows through.

TPWR expects the situation to improve for Tata Projects as the on-ground

situation improves.

Cost of production at its coal mines has reduced with the revision in contracts

post the fall in coal prices.

13 August 2020

Tata Power



Regarding the Mundra PPA, the co. is in talks with the Gujarat government post

a change in the approval process from the HPC framework to GERC. TPWR noted

it would approach CERC for an amendment upon approval from Gujarat and

Maharashtra.

Receivables for the company stood at INR49b. It expects these to be at a similar

level for the year.

1QFY20

4,096

-2,909

-2,470

465

1,130

130

1,200

400

-3,854

-795

2,407

1,570

500

140

230

-33

2,799

4QFY20

563

-2,180

690

1,040

510

520

470

-547

-721

2,186

990

290

130

510

266

2,054

1QFY21

677

463

-1,550

680

1,190

-260

1,230

650

-1,576

-615

1,769

850

530

120

230

2,294

Exhibit 1: TWPR adj. PAT – INR m

a. Standalone

b. Subsidiaries

Mundra

Maithon

Delhi

Trading

Solar Manuf

Logistics

Others

c. Minority interest

d. JVs and associates

Coal mining

Infra

Powerlink

IEL

Others

Adj. reported PAT

Source: MOFSL, Company

Exhibit 2: CGPL

Revenues

per unit

EBITDA

per unit

PAT

Generation

Sales

Availability

FoB price of coal

Revenue

Under recovery

INR m

INR/kwh

INR m

USD/t

INR/kWh

1QFY20

18,170

2.81

1,670

0.00

-2,470

7,003

6,459

2.85

-0.55

2QFY20

16,030

2.93

1,750

0.00

-2,610

5,939

5,479

2.96

-0.51

3QFY20

18,300

2.83

2,610

0.00

-1,640

6,987

6,458

2.83

-0.32

4QFY20

17,270

2.85

2,080

0.00

-2,180

6,566

6,067

2.80

-0.45

1QFY21

17,420

0.00

2,730

0.00

-1,550

6,350

5,857

2.85

-0.46

Source: MOFSL, Company

Exhibit 3: CGPL (Mundra) + Coal assets – INR m

Mundra EBITDA

Coal companies PAT

Mining

Infra

Logistics

Mundra+Coal

KPC realn. - USD/t

KPC EBITDA - USD/t

1QFY20

1,670

2,470

1,570

500

400

4,140

58.9

10.5

2QFY20

1,750

2,280

1,410

550

320

4,030

55.4

2.9

3QFY20

2,610

2,210

980

570

660

4,820

52.9

10.1

4QFY20

1QFY21

2,080

2,730

1,750

2,030

990

850

290

530

470

650

3,830

4,760

53.8

49.1

11.2

10.2

Source: MOFSL, Company

13 August 2020

Tata Power

Exhibit 4: Maithon Power

Revenues

per unit

EBITDA

per unit

PAT

Generation

Sales

Availability

Regulated

equity

1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 2QFY20 3QFY20 4QFY20 1QFY21

INR m

6,460 6,150 7,590 8,160 8,120 5,870 6,830 6,600 6,380

INR/kwh

3.51

4.11

4.25

4.71

4.96

4.17

3.96

4.26

0.00

INR m

1,870 1,610 1,960 2,570 1,940 1,770 1,990 1,880 1,860

INR/kwh

1.02

1.07

1.10

1.48

1.19

1.26

1.15

1.21

0.00

INR m

630

400

670 1040

465

520

760

690

680

1,944 1,595 1,890 1,839 1,740 1,500 1,694 1,669 1,557

1,842 1,498 1,784 1,734 1,637 1,409 1,725 1,551 1,412

INR m

13,880 14,030 14,030 14,030 14,940 14,980 14,400 15,090 14,400

Source: MOFSL, Company

Exhibit 5: Renewables (ex-standalone)

1QFY20

TPREPL (Renewable)

Revenues

EBITDA

PAT

Operating capacity

Generation

Sales

WREPL (Renewable)

Revenues

EBITDA

PAT

Capacity

Wind

Solar

Generation

Sales

Consolidated

Capacity

Generation

Avg. PLF

Revenues

Inter-company

EBITDA (ex-ic)

PAT (ex-ic)

INR m

INR/kwh

INR m

INR/kwh

INR m

2330

4.6

2,120

4.2

200

974

514

507

2QFY20

2,340

4.7

2,110

4.2

1130

513

503

3QFY20

2,050

4.3

1,830

3.8

-150

1134

478

476

4QFY20

2,450

4.2

2,160

3.7

-80

1139

585

579

1QFY21

2,600

0.0

2,320

0.0

150

1136

606

598

INR m

INR/kwh

INR m

3,490

0.0

3,280

1,000

1,010

146

864

487

483

1,984

994

23.8

5,820

5,400

1,200

2,780

0.0

2,510

800

1,010

146

864

373

372

2,140

876

19.4

5,120

4,620

840

2,640

0.0

2,450

520

1,010

146

864

340

336

2,144

816

17.4

4,690

4,280

370

3,100

0.0

2,690

600

1,010

146

864

340

336

2,149

919

19.5

5,550

4,850

520

3,310

0.0

3,140

1,080

1,010

146

864

464

461

2,146

1,062

22.6

5,910

5,460

1,230

Source: MOFSL, Company

Exhibit 6: Delhi Distribution

1QFY20

Revenues

EBITDA

PAT

Regulated equity

Regulatory assets

INR m

22,110

3430

1130

14,850

47,420

2QFY20

21,680

3,340

1040

15,000

45,740

3QFY20

20,910

3,130

930

15,110

48,500

4QFY20

18,800

3,340

1,040

15,410

52,220

1QFY21

17,020

3,590

1,190

16,170

54,230

Source: MOFSL, Company

13 August 2020

Tata Power

Valuation and view



Net debt declined to INR444b (from INR471b in FY20) on account of asset

monetization and WC management despite the current COVID-19 environment.

While certain clarity is pending with respect to upcoming new regulations for

Indonesian coal mines (concerning tax and royalty), at current levels, we view

the risk-reward as favorable.

Divestment-related measures (International Shipping business, Arutmin, and

Tata SED) and approval for the infusion of INR26b from promoters would

continue to aid debt reduction.

With normalization in its EPC businesses and some WC, and lower interest costs,

we expect EPS to increase at a 9–10% CAGR over FY20–23. The approval of a

tariff hike at Mundra, possible benefits from the merger of CGPL & Tata Power

Solar with TPWR, and favorable InvIT valuations provide upsides. Upgrade to

Buy, with TP of INR66/sh.

Exhibit 7: We expect INR64b to flow through for TPWR in FY21 in the form of divestments

and promoter infusion

Promoter Infusion and Expected Divestment in FY21 (INR b)

Cennergi

Ships with Trust

Energy

Arutmin coal mine

SED

Promoter infusion

Source: MOFSL, Company

Exhibit 8: This, along with our expectation of some

normalization in receivables, especially for the Renewables

business (INR b)…

Receivables at Walhwhan and TPREL

211

163

118

FY18

FY19

FY20

FY21E

FY22E

113

Receivable days

Exhibit 9: …should aid debt reduction…

Net debt - INR b

8.1

7.7

6.1

5.4

5.1

4.8

Net debt:EBITDA - x

FY23E

485

FY18

491

FY19

471

FY20

415

FY21E

400

FY22E

387

FY23E

Source: MOFSL, Company

13 August 2020

Tata Power

Exhibit 10: …and lower interest costs (INR b)

Interest costs

FY18

FY19

FY20

FY21E

FY22E

FY23E

Source: MOFSL, Company

Exhibit 11: Expect PAT to improve as debt reduces and EPC businesses normalize

Adj. PAT (INR b)

14.5

10.2

5.3

5.7

2.1

FY18

FY19

3.8

10.6

3.3

4.6

4.9

EPS (INR/sh)

Note: EPS adjusted for promoter infusion

14.7

15.8

FY20

FY21E

FY22E

FY23E

Source: MOFSL, Company

Exhibit 12: Segment-wise breakup of profitability

INR m

Regulated EBIT

Standalone

Delhi

Maithon

Mundra + coal JVs

Mundra EBIT

Trust Energy

Coal mining PAT

RE EBIT

Others EBIT

Solar Manu

Trading

Other JVs & assoc. PAT

Discontinued

Others

Balancing

Consolidated EBIT (incl. JVs)

Finance cost

Consolidated PBT (pre-ex. & Other income, incl. JVs)

Tax

Minority

Other income

Rate regulated previous year

Consolidated PAT (incl. JVs)

FY18

28,223

16,948

7,198

4,077

10,406

-6,155

2,250

14,311

10,317

2,083

1,858

344

1,228

-1,346

51,029

37,230

13,799

1,643

2,026

4,327

14,458

FY19

27,504

14,681

7,838

4,985

5,047

-7,142

1,937

10,252

12,384

4,829

1,353

638

2,619

220

49,764

41,700

8,064

6,561

2,495

3,958

2,743

5,710

FY20

31,131

16,060

8,857

6,214

12,311

2,689

3,207

6,415

12,206

5,296

1,711

547

3,110

-71

60,944

44,937

16,007

8,253

2,991

5,626

-213

10,177

FY21

28,318

15,199

8,144

4,974

10,635

4,935

1,185

4,514

13,459

3,812

1,004

605

2,498

-297

56,223

43,509

12,713

4,334

2,327

4,582

10,634

FY22

FY23

28,502

27,860

15,806

15,920

7,927

7,454

4,769

4,486

9,669

9,644

2,117

2,095

1,209

1,233

6,343

6,316

14,638

15,565

5,916

6,873

1,567

1,652

638

672

3,302

3,608

3,302

3,608

409

941

58,725

59,942

41,034

40,611

17,691

19,331

4,897

5,138

2,637

3,002

4,582

14,738

15,773

Source: MOFSL, Company

13 August 2020

Tata Power

Exhibit 13: SOTP valuation

Reg. Eq.

(a)

45,661

14,224

16,982

P/BV

(b)

1.7

1.5

Mumbai & Jojobera (S/A)

Delhi

Maithon

CESU

Subtotal (A)

CGPL (Mundra) and coal JVs

EBITDA Equity TPWR's share

Value (%) Eq. Val.

d=axb

(e)

17,492 76,710 100 76,710

7,555 21,552 51

10,991

11,578 25,662 74

18,990

2,162

36,625

Reg. Enterprise

Debt Value (EV)

(f)

(e+f)

37,989 114,699

33,190 44,181

14,603 33,592

4,950

7,112

199,585

(g x h)

127,860

-87,544

63,433

103,750

Remarks

RoE = 15.5%, g = 5%

RoE = 15.5%, g = 3%

RoE = 17%, g=0

DCF based

Ke=11.3%

DCF value of fixed charges

Under recoveries in Var. cost

PAT from coal JVs

Subtotal (B)

Other businesses

EV/EBITDA(x) EBITDA

(g)

(h)

18,645

-10,943

6,343

14,045

Assumptions

no under recoveries

Renewables

Haldia, trading etc.

PAT of other JVs and assoc.

Subtotal ( C )

Consolidated

Consolidated EV (A+B+C)

Less: Debt

Assets held for sale

Zambia and Vikhroli trans

Others

Investment unquoted

Investment quoted

Net Equity value

No. of shares

Target Price (INR/share)

EV/EBITDA(x)

(j)

7.5

8.0

10.0

EBITDA

(k)

22,888

10,869

3,302

33,757

(j x k)

171,663

86,951

33,023

291,637

Assumptions

78,084

594,972

-398,749

7,815

3,581

3,977

615

212,212

3,196

1.0

0.8

x BV

at book value

20% discount to MTM

Source: MOFSL, Company

13 August 2020

Tata Power

Financials and valuations

Income statement

Y/E March

Net Sales

Change (%)

Total Expenses

EBITDA

% of Net Sales

Depn. & Amortization

EBIT

Net Interest

Other income

PBT before EO

Regulatory inc./(exp)

EO expense (inc.)

PBT after EO

Tax

Rate (%)

Reported PAT

Minority, JVs & Asso.

Adjusted PAT

Change (%)

2015

337,276

-5.4

274,264

63,012

18.7

21,742

41,270

36,993

4,167

8,445

6,393

14,837

10,749

72.4

4,088

-2,410

1,678

-150.9

2016

295,009

-12.5

223,539

71,470

24.2

16,487

54,983

32,358

913

23,538

-9,752

978

12,807

6,803

53.1

6,004

618

7,600

352.9

2017

278,977

-5.4

220,510

58,467

21.0

19,886

38,581

31,140

2,022

9,464

-6,095

6,515

-3,145

-458

14.6

-2,687

10,142

13,969

83.8

2018

293,312

5.1

229,743

63,570

21.7

23,981

39,589

37,230

4,327

6,686

-4,099

-10,308

12,895

1,643

12.7

11,252

13,514

14,458

3.5

2019

295,586

0.8

231,359

64,227

21.7

23,931

40,296

41,700

3,958

2,554

-659

-16,200

18,095

6,561

36.3

11,534

10,376

5,710

-60.5

2020

291,364

-1.4

211,936

79,428

27.3

26,336

53,093

44,937

5,626

13,781

-1,887

-4,099

15,994

8,253

51.6

7,741

6,535

10,177

78.2

2021E

310,218

6.5

233,709

76,509

24.7

27,299

49,210

43,509

4,582

10,282

-5,185

15,468

4,334

28.0

11,134

4,685

10,634

4.5

2022E

339,838

9.5

261,754

78,084

23.0

29,005

49,079

41,034

4,582

12,627

4,897

38.8

7,730

7,009

14,738

38.6

(INR m)

2023E

353,727

4.1

273,269

80,459

22.7

30,440

50,019

40,611

4,582

13,990

5,138

36.7

8,852

6,921

15,773

7.0

Balance sheet

Y/E March

Share Capital

Reserves

Net Worth

Minority Interest

Total Loans

Deferred Tax Liability

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Capital WIP

Goodwill

Investments

Curr. Assets

Inventories

Account Receivables

Cash and Bank Balance

Others

Curr. Liability & Prov.

Account Payables

Provisions & Others

Net Curr. Assets

Appl. of Funds

2015

2,705

122,716

125,421

24,926

423,419

14,014

587,779

583,351

202,217

381,133

36,505

66,258

27,326

243,207

18,442

55,640

21,064

148,062

166,650

52,354

114,296

76,557

587,779

2016

2,705

113,629

116,334

17,498

403,486

20,969

558,286

476,643

112,536

364,108

13,449

114,468

208,517

13,734

35,402

9,991

149,389

142,311

44,014

98,297

66,206

558,286

2017

2,705

115,090

117,795

18,690

503,154

17,598

657,237

577,520

130,311

447,209

21,779

17,325

108,592

226,458

15,996

38,321

20,521

151,621

164,127

55,290

108,837

62,332

657,237

2018

2,705

149,897

152,602

20,153

500,892

5,166

678,813

604,390

155,993

448,398

16,526

16,416

119,928

227,068

16,231

27,889

16,219

166,729

149,522

56,098

93,424

77,546

678,813

2019

2,705

164,507

167,212

21,667

500,060

10,568

699,507

599,714

173,081

426,633

25,757

16,416

128,511

234,378

17,064

44,453

9,544

163,317

132,189

54,815

77,374

102,190

699,507

2020

2,705

177,955

180,660

23,320

498,759

11,740

714,480

654,228

193,980

460,248

16,115

16,416

138,353

255,724

17,524

44,259

27,937

166,005

172,376

50,954

121,422

83,348

714,480

2021E

3,196

213,419

216,615

24,464

440,152

11,740

692,972

694,134

221,279

472,855

16,115

16,416

140,548

223,663

17,905

48,643

25,365

131,750

176,625

55,203

121,422

47,038

692,972

2022E

3,196

222,292

225,488

25,836

431,527

11,740

694,592

726,662

250,284

476,378

16,115

16,416

143,729

221,146

18,043

48,988

31,765

122,350

179,192

57,770

121,422

41,955

694,592

(INR m)

2023E

3,196

232,201

235,397

27,573

420,960

11,740

695,671

754,642

280,724

473,918

16,115

16,416

147,213

222,376

18,093

49,213

33,720

121,350

180,367

58,945

121,422

42,009

695,671

13 August 2020

Tata Power

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/EBITDA

Dividend Yield (%)

FCF(pre-int) to EV yield(%)

Return Ratios (%)

RoE

RoCE (post-tax)

RoIC (post-tax)

Working Capital Ratios

Fixed Asset Turnover (x)

Asset Turnover (x)

Debtor (Days)

Inventory (Days)

Leverage Ratio (x)

Net Debt/EBITDA

Debt/Equity

2015

0.6

8.7

46.4

1.3

209.5

2016

2.8

8.9

43.0

1.3

46.3

2017

5.2

12.5

43.5

0.0

2018

5.3

14.2

56.4

0.0

2019

2.1

11.0

61.8

1.3

61.6

2020

3.8

13.5

66.8

1.6

41.2

2021E

3.3

11.9

67.8

1.3

39.1

2022E

4.6

13.7

70.6

1.3

28.2

2023E

4.9

14.5

73.7

1.3

26.3

124.3

8.9

1.7

10.1

1.7

4.0

23.0

7.3

1.5

8.2

2.0

9.9

10.3

4.2

1.2

11.0

0.0

6.3

9.9

3.7

0.9

10.2

0.0

5.8

25.2

4.8

0.9

10.2

2.4

1.9

14.1

3.9

0.8

8.0

2.9

11.0

16.0

4.5

0.8

8.0

2.4

7.9

11.5

3.9

0.8

7.6

2.4

8.9

10.8

3.7

0.7

7.3

2.4

10.0

1.4

6.1

2.7

6.3

8.6

6.0

11.9

6.8

7.2

10.7

6.3

6.9

3.6

5.5

5.0

5.9

7.1

5.0

5.4

7.0

6.7

7.0

6.1

6.8

7.1

6.5

0.9

0.6

6.4

2.7

0.8

0.5

5.5

2.9

0.6

0.4

8.3

3.5

0.7

0.4

7.6

2.8

0.7

0.4

7.6

2.6

0.6

0.4

5.9

2.3

0.7

0.4

5.4

1.7

0.7

0.5

5.1

1.6

0.7

0.5

4.8

1.5

Cash flow statement

Y/E March

EBITDA

Others

Direct taxes (net)

CF from Op. Activity

Capex

FCF

Int & div income

Investments(subs/JVs)

Others

CF from Inv. Activity

Share capital

Borrowings

Finance cost

Dividend

Others

CF from Fin. Activity

(Inc)/Dec in Cash

Opening balance

Closing balance (as per B/S)

2015

69,405

-5,611

4,101

-8,085

59,809

-34,936

24,873

2,078

-2,457

-35,315

20,692

-1,026

-33,842

-5,121

-3,089

-22,386

2,109

18,956

21,064

2016

61,718

20,488

19,625

-4,295

97,536

-39,864

57,672

2,141

-5,109

-10,097

-52,929

149

-13,037

-33,515

-5,908

-3,369

-55,680

-11,073

21,064

9,991

2017

52,372

21,843

1,686

-6,323

69,578

-33,223

36,356

6,263

-35,396

-6,630

-68,986

49,608

-32,704

-4,159

-2,816

9,937

10,530

9,991

20,521

2018

59,471

9,584

602

-6,019

63,639

-35,604

28,035

11,256

1,505

2,165

-20,677

4,370

-45,704

-5,067

-864

-47,263

-4,301

20,521

16,219

2019

63,568

-13,234

462

-5,058

45,738

-35,762

9,976

4,480

24,592

-5,546

-12,236

-6,416

-39,761

-4,927

-740

-51,845

-18,343

16,219

-2,124

2020

77,541

6,743

-4,440

-6,091

73,753

-22,258

51,495

20,595

-374

-3,392

-5,429

201

-1,070

-40,025

-5,992

-4,209

-51,096

17,228

9,544

26,773

2021E

76,509

7,903

-4,334

80,078

-39,906

40,173

9,400

31,020

514

26,000

-58,607

-43,509

-5,338

-1,710

-83,165

-2,572

27,937

25,365

2022E

78,084

3,083

-4,897

76,270

-32,528

43,742

11,046

8,400

-13,082

-8,625

-41,034

-5,420

-1,710

-56,788

6,400

25,365

31,765

(INR m)

2023E

80,459

1,900

-5,138

77,221

-27,980

49,241

11,021

-16,959

-10,567

-40,611

-5,420

-1,710

-58,307

1,955

31,765

33,720

13 August 2020

Tata Power

NOTES

13 August 2020

Tata Power

Explanation of Investment Rating

Investment Rating

Expected return (over 12-month)

BUY

>=15%

SELL

< - 10%

NEUTRAL

< - 10 % to 15%

UNDER REVIEW

Rating may undergo a change

NOT RATED

We have forward looking estimates for the stock but we refrain from assigning recommendation

*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within

following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.

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8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months

13 August 2020

Tata Power

9 MOFSL has not received any compensation or other benefits from third party in connection with the research report

10 MOFSL has not engaged in market making activity for the subject company

********************************************************************************************************************************

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Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.

Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no

assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance

Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.

* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National

Company Law Tribunal, Mumbai Bench.

13 August 2020