Tata Power Analysis Deck

Company analysis
Analyst Information:
Analyst Name: Mihir Mahesh
E-mail: mihirmm345@gmail.com
Instagram: _fin.formation_
mihir_mahesh
Website: https://mihirmm345.wixsite.com/shareholdersblog
Linkedin: https://www.linkedin.com/in/mihir-mahesh-532b13163/
1
Company Overview
Table of 1. About Tata Power
Contents 2. Segment Reports
3. Management Reporting
4. Shareholder’s Pattern
5. Plan over the Years
2
Industry Overview
1. Current industry
2. Key Industry Trends
3
Financial Overview
1. Financial Performance
2. Financial Ratios
3. Projections – Story behind the numbers
4. Discounted Cash Flow Valuation
5. Trading Comps
www.corporatefinanceinstitute.com
Company Overview
Company Overview
About TATA Power
The Company was incorporated on 18th September,1919 at Mumbai. The Company generates
and supplies Electricity. The company was founded by Dorabji Tata. The Tata Hydro-Electric
Power System comprises the Tata Hydro-Electric Power Supply Co., Ltd., the Andhra Valley Power
Supply Co. Ltd., and the Tata Power Co., Ltd. Now the company isn’t only into conservative ways
of producing power but has evolved into a company that is slowly transitioning into renewable
and green energy generation and transmission.
Valuation & Share Performance
Key Valuation Statistics
Enterprise Value 836.05B
Market Cap 401.65B
P/E* 39.65
EV/EBITDA* 12.36
Debt 480.99 B
Share Price Current: Rs.125.70 High/Low: 132.70/37.80
Business Model
Segment Report
Segment Breakdown
Tata powers business can be broken down into 3 main segments:
1. Generation – Conventional and renewable generation

2. Renewables – Manufacturing, EPC Projects, products and operations &
maintenance
3. Transmission and distribution
Their business is mainly centered around these three pillars. Apart from these
established services and products they have a few new segments
4. EV Charging solutions
5. Home automation
6. Solar rooftops
7. Solar pumps
8. Micro grids
9. Solar RO Systems
10. EV Charging solutions using Tata power EZ Charge app
*Largest solar rooftop by tata power in

punjab
Segment Report
Generation – Conventional energy
Conventional Energy
Thermal Hydro Waste
Segment Report
Thermal power generation

Power through thermal means are generated through burning fuels such as heavy oil, LPG
and coal inside a broiler to generate steam at high temperature and pressure. his steam is
used to rotate the impeller of the steam turbine. This drives the power generators
connected to the turbine that generate electricity.
This process of producing electricity have major environmental repercussions and that’s why
the company is looking to move away from the conventional means to generate to electricity
and are moving towards to green means to generate electricity.
Tata power has 8 thermal plants:
1. Trombay in Mumbai: The Trombay Thermal Power Station, located in Mumbai, has an installed
generation capacity of 930 MW. Providing power to majority consumers (bulk & retail) in Mumbai, the plant
has a list of firsts to its credit. From the first 150 MW and 500 MW plant in India to setting up the unique
islanding system which ensures uninterrupted power supply.
2. Jamshedpur, Maithon and Jojobera in Jharkhand

3. Halda in West Bengal
4. Kalinganagar in Odisha
5. Mundra in Gujurat : Coastal Gujarat Power Limited (CGPL), Tata Power's wholly-owned subsidiary,
has implemented the 4150 MW UMPP near the port city of Mundra in Gujarat which meets nearly 3% of
India's power needs of the country. This UMPP is India's first 800 MW unit thermal power plant using
supercritical technology, supplying to 5 states: Gujarat, Rajasthan, Maharashtra, Haryana and Punjab.
6. Prayagraj, Allahbad
From all these plants Tata power from their thermal plants are able to generate
9032.5 MW.
Segment Report
Hydro power generation
Power through hydro is mostly generated through damns where the water runs the water
turbine. The power extracted depends on the difference in between the height and the
volume of water.
Tata power have 3 plants all in Maharashtra:

1. Bhira
2. Bhivpuri
3. Khopli
A hydro capacity of 693 MW which is generated for the domestic market.
Apart from the above plants they have partnered with companies:
4. They have partnered with SN Power to develop hydro projects in Nepal and India.
5. Joint venture with Royal government of Bhutan that commissioned a 126 MW Hydro
project with Druk Green power company in 2015
6. The company has synchronized of 186 MW Shuakhevi Hydro Project in Georgia. The
company has commissioned two units of 60 MW each of its 120 MW Itezhi Tezhi hydro
Power Project in Zambia, in which Tata Power has a 50 percent stake
Segment Report
Waste heat recovery power generation
Power generation in waste plants are generated by the combustion of waste to produce
electricity.
Tata Power has set up various plants at Haldia and in Jamshedpur (Power 6) based on the
blast furnace and coke oven gases which are waste gases from steel making process which
help in reducing greenhouse gas emission significantly. It's looking at other similar projects
with Tata Steel.
Segment Report
Generation – Renewable Energy
Solar energy
Tata Power has a strong portfolio of 1705 MW of solar generation capacity.
It has recently commissioned a 100 MW solar plant at Anantapur Solar Park, Andhra
Pradesh. It has also commissioned 150 MW in Pavagada, Karnataka, 30 MW at Palaswadi in
Maharashtra and 25 MW in Charanka, Gujarat in 2017.
The Company had set up its first solar power plant of 110 kW, way back in 1996 at Walwhan
in Lonavla. A 60.48 kWp solar power plant has been installed on the rooftop of one of the
Company's offices in Mumbai in 2010 and the power generated by these solar panels takes
part of the lighting load of the entire building announced the synchronisation of its 15 MW
solar plant at Belampally in Telangana, thereby starting its commercial operations.
Wind Energy
Tata Power has an installed capacity of 932 MW and plants spread across seven states of
Maharashtra, Gujarat, Tamil Nadu, Karnataka Rajasthan, Andhra Pradesh and Madhya
Pradesh leading in promoting wind power generation in India.
Recently, Tata Power's subsidiary, TPREL has commissioned 21 MW Vagarai wind Farm in
Tamil Nadu, 100 MW in Nimbagallu, Andhra Pradesh, and 26 MW in Gujarat.
Segment Report
Transmission and distribution
TATA Power, as a Transmission and Distribution service provider is

effectively managing infrastructure projects worth 3.6 bn USD for over 22
States and Union Territories, thereby assisting Government of India in its
efforts towards providing impetus to power sector reforms.
TATA Power is expanding its services to international borders and doing

significant work in the African and Asian continents including Indian sub-
continent markets.
We have been providing transformational support to utilities undergoing
reforms processes in various countries. As part of the reforms process,
the focus is on implementing Information & Operational technologies to
become smarter utilities of the future.
Today our wings have spread in more than 14 countries across the globe
and growing.
They also provide the following services in this division:
1. Management and technical consultancy services

2. System integration
3. Managed services
4. Integrated utility services
5. Energy Management solutions
6. Capacity building services
Segment Report
EV Charging stations
Tata powers EZ charging is the newest addition to their business they provide EV
charging solutions for fleets, homes, malls, retail outlets and public access. They
provide
End-to-end customized solutions offerings as per your requirement - Backend

Power Infrastructure, EV Chargers of different charging standards, Charger
Installation, Annual Maintenance, Charger Management Software Platform
Subscription, and Mobile App.
Segment Report
Revenue Breakdown
2019 2020 2021
1%
1%
1%
Generation Generation Generation

Renewables Renewables Renewables
Transmission and Transmission 32% Transmission
38%
41%
Distribution and Distribution and Distribution
47% 48%
Others Others 50% Others
17%
11% 13%
Segment Report
Segment wise CAPEX
2019 2020
11%
18% 7%
13% 1%
2% Generation 2% Generation
Renewables Renewables
0% Transmission and Transmission and
Distribution Distribution
Others Others
Discontinued Op- Discontinued
erations Operations
66% 80%
Segment Report
Energy Generation
Segment Report
Future energy plans
Management Report
Board of directors
Shareholder Ownership
Ownership Analysis
*Shareholding pattern as on 31st March 2021
Ownership Analysis
Promoters Holding
Ownership Analysis
Foreign investment institutions (FII) Holding
Ownership Analysis
Domestic institutional investors (DII) Holding
Ownership Analysis
Public holding
Ownership Analysis
Mutual Fund holding
Industry Overview
Current industry
Global and Indian power industry
The current power industry both global and Indian are going through major
changes with respect to the environmental repercussions of climate
change. The industry is slowly moving from conventional means of
electricity generation to green (renewable) energy generation. As per the
latest report of the ministry of power the majority of power generation is by
thermal power generation.
The power industry globally saw a decrease in power demand and this
enabled the renewable sector to acquire market share of the non
renewable generation sector.
Current industry
India
Current industry
India
Current industry
India
Current industry
Global
Key Industry Trends
From the reports as per IEA and the Indian ministry of power the key trend in
the power generation industry is the move from non-renewable sources to
renewable sources of energy production the trend observed through the
research is that the developed countries like United states, Europe and
China have increased their renewable energy capacity. The penetration of
renewable energy sector in India and other developing Countries are going
to take some time as the dependence on thermal power generation
especially is too high but the Indian government is promoting companies
that manufacture and undertake solar energy projects and products.
The decline in power generation demand has been uniform globally, It is the
lowest power demand in the last 50 Years, a decline of 2% as per IEA
(Internation Energy Agency)
Key Industry Trends
Global and Indian Electric vehicle industry
There were 10 million electric cars on the world’s roads at the end of
2020, following a decade of rapid growth. Electric car registrations
increased by 41% in 2020, despite the pandemic-related worldwide
downturn in car sales in which global car sales dropped 16%. Around
3 million electric cars were sold globally (a 4.6% sales share), and
Europe overtook the People’s Republic of China (“China”) as the
world’s largest electric vehicle (EV) market for the first time. Electric
bus and truck registrations also expanded in major markets, reaching
global stocks of 600,000 and 31,000 respectively.
Vehicle manufacturers announced increasingly ambitious

electrification plans. Out of the world’s top 20 vehicle manufacturers,
which represented around 90% of new car registrations in 2020, 18
have stated plans to widen their portfolio of models and to rapidly
scale up the production of light-duty electric vehicles. The model
availability of electric heavy-duty vehicles is also broadening, with four
major truck manufacturers indicating an all-electric future. Consumer
spending on electric car purchases increased to USD 120 billion in
2020. In parallel, governments across the world spent USD 14 billion
to support electric car sales, up 25% from 2019, mostly from stronger
incentives in Europe. Nonetheless, the share of government
incentives in total spending on electric cars has decreased over the
past five years, suggesting that EVs are becoming increasingly
attractive to consumers. The near-term outlook for EV sales is bright.
In the first-quarter of 2021, global electric car sales rose by around
140% compared to the same period in 2020, driven by sales in China
of around 500 000 vehicles and in Europe of around 450 000. US
sales more than doubled relative to the first-quarter of 2020, albeit
from a much lower base
India increased electric bus registrations 34% to 600 in 2020.

Key Industry Trends
EV Launches in India EV Policies in India
Key Industry Trends
Key Industry Trends
Key Industry Trends
Key Industry Trends
Key Industry Trends
EV Batteries and charging industry
Batteries
The EV demand lagged due to batteries.
Automotive lithium-ion (Li-Ion) battery production was 160

gigawatthours (GWh) in 2020, up 33% from 2019. The increase
reflects a 41% increase in electric car registrations and a constant
average battery capacity of 55 kilowatt-hours (kWh) for BEVs and
14 kWh for PHEVs. Battery demand for other transport modes
increased 10%. Battery production continues to be dominated by
China, which accounts for over 70% of global battery cell
production capacity. China accounted for the largest share of
battery demand at almost 80 GWh in 2020, while Europe had the
largest percentage increase at 110% to reach 52 GWh. Demand in
the United States was stable at 19 GWh. Nickel-manganese-cobalt
continues to be the dominant chemistry for Li-ion batteries, with
around 71% sales share and nickel-cobaltaluminium accounting for
most of the rest. Lithium-iron-phosphate battery chemistry has
regained sales share but is still under 4% for the electric car
market.
Key Industry Trends
EV Batteries and charging industry
Charging industry
While most charging of EVs is done at home and work, roll-out of publicly accessible charging will be
critical as countries leading in EV deployment enter a stage where simpler and improved autonomy
will be demanded by EV owners. Publicly accessible chargers reached 1.3 million units in 2020, of
which 30% are fast chargers. Installation of publicly accessible chargers was up 45%, a slower pace
than the 85% in 2019, likely because work was interrupted in key markets due to the pandemic. China
leads the world in availability of both slow and fast publicly accessible chargers.
Slow chargers
The pace of slow charger (charging power below 22 kW) installations in China in 2020 increased by
65% to about 500 000 publicly accessible slow chargers. This represents more than half of the world’s
stock of slow chargers. Europe is second with around 250 000 slow chargers, with installations
increasing one-third in 2020. The Netherlands leads in Europe with more than 63 000 slow chargers.
Sweden, Finland and Iceland doubled their stock of slow chargers in 2020. Installation of slow
chargers in the United States increased 28% in 2020 from the prior year to total 82 000. The number
of slow chargers installed in Korea rose 45% in 2020 to 54 000, putting it in second place.
Fast chargers
The pace of fast charger (charging power more than 22 kW) installations in China in 2020 increased
by 44% to almost 310 000 fast chargers, slower than the 93% pace of annual growth in 2019. The
relatively high number of publically available fast chargers in China is to compensate for a paucity of
private charging options and to facilitate achievement of goals for rapid EV deployment. In Europe,
fast chargers are being rolled out at a higher rate than slow ones. There are now more than 38 000
public fast chargers, up 55% in 2020, including nearly 7 500 in Germany, 6 200 in the United
Kingdom, 4 000 in France and 2 000 in the Netherlands. The United States counts 17 000 fast
chargers, of which nearly 60% are Tesla superchargers. Korea has 9 800 fast chargers. Publicly
accessible fast chargers facilitate longer journeys. As they are increasingly deployed, they will enable
longer trips and encourage late adopters without access to private charging to purchase an electric
vehicle.
Key Industry Trends
EV30@30 and the Drive to Zero campaigns support EV deployment
EV30@30 Campaign
The EV30@30 Campaign was launched at the CEM meeting in 2017 to spur the
deployment of EVs. It sets a collective aspirational goal for EVs (excluding
two/three-wheelers) to reach 30% sales share by 2030 across all signatory
countries. This is the benchmark against which progress is to be measured for the
EVI members. Fourteen countries endorsed the campaign: Canada; Chile; China;
Finland; France; Germany; India; Japan; Mexico; Netherlands; Norway; Portugal;
Sweden and United Kingdom. In addition, 30 companies and organizations
support the campaign, including: C40; FIA Foundation; Global Fuel Economy
Initiative; Hewlett Foundation; Natural Resources Defense Council; REN21; SLoCaT;
The Climate Group; UN Environment Programme; UN Habitat; World Resources
Institute; ZEV Alliance; ChargePoint; Energias de Portugal; Enel X; E.ON; Fortum;
Iberdrola; Renault-Nissan-Mitsubishi Alliance; Schneider Electric; TEPCO; Vattenfall
and ChargeUp Europe.
These include:
• Support and track the deployment of EV chargers.
• Galvanise public and private sector commitments to incorporate EVs in company
and supplier fleets.
• Scale up policy research and information exchanges.
• Support governments through training and capacity building.
• Establish the Global EV Pilot City Programme to achieve 100 EVFriendly Cities
over five years.
Key Industry Trends
EV30@30 and the Drive to Zero campaigns support EV deployment
The Global Commercial Vehicle Drive to Zero Campaign was launched at

the 2020 CEM meeting and operates as part of the EVI. The campaign,
administered by CALSTART, a clean transport nonprofit organisation,
aims to bring governments and leading industry stakeholders together to
collaboratively develop policies, programmes and actions that can
support the rapid manufacture and deployment of zero-emission
commercial vehicles. Drive to Zero counts more than 100 pledge
partners, including nine national governments (as of April 2020) and
leading state, provincial and regional governments and agencies from
across the world.
Implementations:
GEF-7 Global Programme on electro mobility
The GEF-7 Global Electric Mobility Programme, funded by the Global

Environment Facility (GEF), will be launched in the second-half of 2021 to
help low and middle-income countries shift to electro mobility. The
programme plans to implement one global project and 27 country
projects over a five-year period. The IEA together with the UN
Environment Programme (UNEP) will lead the global project, which aims
to expand and complement the work of the EVI.
EVI Global EV Pilot City Programme
The EVI Global EV Pilot City Programme was launched in May 2018 at the
9th CEM as an initiative of the EV30@30 campaign. It aims to build a
network of at least 100 cities over an initial period of five years to work
together on the promotion of electric mobility.
Financial Overview
Historical Share Price Performance
Key Events & Share Price Drivers
Price movements
• 1st high price of Rs.40 was achieved on Jan

14th, 2004
• Hit the highest price of Rs.159.21 in 2008.
• The crash of 2008 caused the price to drop to

Rs.62.
• The company share post the crash went back

up to Rs.143.
• Since 2010 the share hasn't moved up too

much.
• The share saw a larger dip in 2020 due to

COVID-19.
• Since the COVID crash the share has gone up

by 201%. And seems to be picking
momentum.
Financial Performance
Financial Performance – 2017 To 2021
Balance Sheet
From the balance sheet we can clearly see that the business is very debt and
capex heavy hence the huge amounts in those two line items, The debt has
been taken in order to improve the renewable energy business. Their working
capital had improved but it worsened mainly due to COVID-19 is my
assumption. Ever since Mr. N.Chandrasekaran has become a director in Tata
power he got the subsidiaries of Tata power from 48 to 30. And have also
concentrated more Mundhwa.
Income Statement
The net income has reduced considerably in the

previous two Years this could be because of the 2%
drop of demand in the demand. The positives for the
company is the stable Gross profit margin but the
Operating Margins are fairly unstable and this is
something that would be a continued issue with them
over the Years. The tax rate being negative is due to
the losses at the mundra plant. Their revenues have
been fairly stable and I expect this to increase with the
diversification of the business model and the new
management backing the renewable energy sector and
the fact that they have increased their stake in the
company as a belief statement.
Financial Ratios
Strengths:
1. Fairly stable EBITDA Margin

2. Increasing current ratio
3. Stable fixed assets turnover
ratio
4. Decreasing debt
Weaknesses:
5. Low interest coverage ratio.
6. Low return on equity
7. Low NPM
8. Low Current ratio but its
improving
9. Low quick ratio but its
improving
Quarterly Result
Profit and Loss
Tata powers Q1 Performance:

Sales Growth (Y-O-Y) – 54%
Operating Income growth (Y-O-Y) – 26%
Operating Margin Profit – 22%
EBITDA Margin – 27%
Quarterly Result
Investors Presentation
Highlight:
1. Acquisition of 51% of equity shares of TP Northern Odisha Distribution Limited increasing

overall consumer base to 12.1 Million.
2. Agreement signed with HPCL to set up EV charging stations at its petrol pumps in multiple cities
and major highways across the country.
3. Secured Highest CRISIL ESG Scores.
4. Boosting renewable energy portfolio by 6 fold. From 4GW To 25GW
5. Rs.400 Cr KSEB contract won in July.
6. EV Infrastructure: Added EV Stations in 9 new cities (112 cities now), 3,400 home chargers
installed, 640+ charger points installed including bus chargers, 114 bus chargers installed in
Mumbai and Ahmedabad.
Concern:
1. NTPC Threatens to end pact with Tata power over delays.
Projections – Story Behind the numbers
Projections
Category Assumptions Comments

2018-2021 2022 – 2032
Revenue 4% 13%
• I expect the revenue growth to increase at a CAGR of 13% as I believe that Tata Power will be able to capture the EV charging market and the
renewable energy market as well.
Operating Margin 31% 24.74%

• I expect that the Operating Margin to drop down the 25% as I expect that they will need some time to attain bargaining power and will need to
increase their operating expenses in order to be able to justify the revenue growth and the reinvestment rate.
• I expect the sales to capital ratio to go up to 0.93 in the next 10 Years but the major growth is going to take place only post Year 5. As per their
Sales to Capital 0.62 0.93 plan they expect to go completely renewable by 2050 but I haven’t been able to find any plan with regards to this so I have been fairly
conservative with the reinvestments.
Projections – Story Behind the numbers
Projections
Projected Cash Flows
Valuations
Valuation
Discounted Cash Flow
Valuations
Valuation
Trading Comps
Pricing
Forward PE
Pricing
PEG

Tata Power Analysis Deck

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Tata Power Analysis Deck

Uploaded by

Copyright:

Available Formats

Company analysis

Analyst Name: Mihir Mahesh

Valuation & Share Performance

Key Valuation Statistics

Enterprise Value 836.05B

Market Cap 401.65B

Share Price Current: Rs.125.70 High/Low: 132.70/37.80

Tata powers business can be broken down into 3 main segments:

1. Generation – Conventional and renewable generation

*Largest solar rooftop by tata power in

Thermal Hydro Waste

Thermal power generation

Tata power has 8 thermal plants:

2. Jamshedpur, Maithon and Jojobera in Jharkhand

Hydro power generation

Tata power have 3 plants all in Maharashtra:

Waste heat recovery power generation

Tata Power has a strong portfolio of 1705 MW of solar generation capacity.

TATA Power, as a Transmission and Distribution service provider is

TATA Power is expanding its services to international borders and doing

They also provide the following services in this division:

1. Management and technical consultancy services

End-to-end customized solutions offerings as per your requirement - Backend

2019 2020 2021

Generation Generation Generation

*Shareholding pattern as on 31st March 2021

Foreign investment institutions (FII) Holding

Domestic institutional investors (DII) Holding

Mutual Fund holding

Vehicle manufacturers announced increasingly ambitious

India increased electric bus registrations 34% to 600 in 2020.

EV Launches in India EV Policies in India

The EV demand lagged due to batteries.

Automotive lithium-ion (Li-Ion) battery production was 160

The Global Commercial Vehicle Drive to Zero Campaign was launched at

GEF-7 Global Programme on electro mobility

The GEF-7 Global Electric Mobility Programme, funded by the Global

EVI Global EV Pilot City Programme

• 1st high price of Rs.40 was achieved on Jan

• Hit the highest price of Rs.159.21 in 2008.

• The crash of 2008 caused the price to drop to

• The company share post the crash went back

• Since 2010 the share hasn't moved up too

• The share saw a larger dip in 2020 due to

• Since the COVID crash the share has gone up

The net income has reduced considerably in the

1. Fairly stable EBITDA Margin

Profit and Loss

Tata powers Q1 Performance:

Operating Income growth (Y-O-Y) – 26%

Operating Margin Profit – 22%

EBITDA Margin – 27%

1. Acquisition of 51% of equity shares of TP Northern Odisha Distribution Limited increasing

3. Secured Highest CRISIL ESG Scores.

4. Boosting renewable energy portfolio by 6 fold. From 4GW To 25GW

5. Rs.400 Cr KSEB contract won in July.

1. NTPC Threatens to end pact with Tata power over delays.

Category Assumptions Comments

Operating Margin 31% 24.74%

Projected Cash Flows

Discounted Cash Flow

You might also like