This is the CFA Challenge presentation on Tata Power. It was conducted on NMIMS Mumbai campus in 2013

1. Team Name: Fintastic Five
Purav Sheth
Piyush Rajgaria
Riaz Mohammad

2. 
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Company Overview
Business Overview
Mergers & Acquitions
Industry Overview
Industry Analysis
Competitive Analysis
Financial Statement Analysis
Investment Risks
Recommendation

3. 
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Tata is an Indian multinational conglomerate founded by Jamshetji Tata in
1868
It has more than 100 companies and 32 are listed on exchange
Tata encompasses seven businesses sectors
Engineering
Communications and information technology
Materials
Services
Energy
Consumer products
Chemicals

4. 
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Tata Power is the 2nd largest
electricity generating company in
India
Active presence in 7 countries:
India, South Africa, Mauritius,
Singapore, Vietnam, Jakarta,
Cyprus
Tata Power has a market
capitalization of 4.2$ bn and
promoter shareholding of 32.8%

5. 
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Coastal Gujarat Power Limited
Maithon Power Limited
Industrial Energy Limited
Tata Power Renewable Energy Limited
Tata Power Delhi Distribution Limited
Powerlinks Transmission Limited
Tata Power Trading Company Limited

6. Business Overview
Tata Power
Generation
Distribution
Transmission
Trading
Fuel &
Logistics
Recent Merger & Acquisitions
Geodynamics
Sep 2008
Coastal Gujarat Power
April 2007
KT Kaltim Prima Coal
KT Arutmin Indonesia
June 2007

7. 
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India has adopted Thermal, Hydel,
Nuclear, Wind,
& Solar sources of electricity
The power sector in India has been
paralyzed due to various scams,
coal shortages, government
policies and many more factors
Land, environment and forest
clearances are the key problems
hindering growth of power sector
Power transmission and
distribution losses are greater than
the power generation
Sector split and leading companies

8. 
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There is positive correlation
between India’s GDP growth rate
and Power Generation
Currently there is acute shortage of
power.
India needs to add power
generation capacity to match the
pace of demand
Total Power Generation capacity:
225.1 GW
However, around 30 crore people
in India are short of power supply
Demand Supply gap

9. Majors competitors of Tata Power
Public Sector
Private Sector
National Thermal
Power
Corporation
(NTPC)
Reliance Infra
National Hydro
Electric Power
Corporation
(NHPC)
Suzlon Energy

10. Operating Revenue
30000
25000
20000
15000
Tata Power
10000
Reliance Infra
5000
0
2008-09
2009-10
2010-11
2011-12
Operating Profit
6000
5000
4000
Tata Power
3000
Reliance Infra
2000
1000
0
2008-09
2009-10
2010-11
2011-12

11. Growth of Income from
Operations(%)
40
30
Tata Power
20
Reliance Infra
10
0
2010
2011
2012
Growth of Operating Profit (%)
60
50
40
Tata Power
30
Reliance Infra
20
10
0
2010
2011
2012

12. Tata Power vs NTPC
Operating Revenue
70000
60000
50000
40000
Tata Power
30000
NTPC
20000
10000
0
2009
2010
2011
2012
Profit After Tax (PAT)
10000
8000
6000
Tata Power
4000
NTPC
2000
0
-2000
2009
2010
2011
2012

13. Growth in Revenue (%)
40
35
30
25
20
Tata Power
15
NTPC
10
5
0
2010
2011
2012
Percentage Change in PAT (%)
100
50
0
-50
-100
-150
-200
2010
2011
2012
Tata Power
NTPC

14. Reliance Infra
Tata Power
Promoters
FII
DII
Promoters
Others
FII
DII
16%
19%
32%
49%
20%
24%
15%
NTPC
25%
Promoters
10%
FII
DII
5%
10%
75%
Others
Others

15. 
Tata Power EPS and P/E
Year
Q1 (Cr)
Q2 (Cr)
Q3 (Cr)
Q4 (Cr)
Fiscal
EPS
Fiscal
P/E
2010-11 11.07
1.05
0.65
1.28
84.8
1.57
2011-12 17.62
-5.13
1.11
-2.71
-4.98
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2012-13 0.47
-0.7
-1.58
0.58
-1.23
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16. Peer analysis (2012)
Company
Stock
Price
Market
Cap(Cr)
NTPC
141.9
117003.14 9.27
Reliance
Infra
362.65 9537.33
4.77
Tata
Power
88.1
20906.77
P/E
Price/ Profit
Book Margin
Return
on
Assets
Return on
Equity
1.6
22.13%
88.89
16.06%
0.46
14.65%
705
8.89%
20.39 1.78
21.15%
51.32

17. Standalone (2012):
 Tangible assets increased from 5782.93 to 7154.21
 Intangible assets increased by 0.01 to 18.59
 Investment in subsidiaries, joint venture and associates increased from
5977.63 to 7356.29
 Investment in mutual fund increased from 1.36 to 484.77
 Tax expenses increased from 170.33 to 513.14
All figures in crores

18. Consolidated (2012)
 Total income increased from 19861 to 26270
 Depreciation/Amortization/Impairment increased from 980.24 to 3134.4
 Financial cost from 866.1 to 1527.09
 Company incurred a loss of 1087.68 as compared to profit of 2059.60 in
2011
PAT (Consolidated)
2,500.00
2,000.00
1,500.00
1,000.00
500.00
PAT (Consolidated)
0.00
-500.00
-1,000.00
-1,500.00
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013

19. EPS (Consolidated)
100
80
60
40
EPS (Consolidated)
20
0
-20
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
Total Income from Operations
(Consolidated)
35,000.00
30,000.00
25,000.00
20,000.00
Total Income from
15,000.00
Operations (Consolidated)
10,000.00
5,000.00
0.00
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

20. Announcement
Date
Effective Date
Dividend Type
Dividend %
30/05/2013
26/07/13
Final
115.0
22/05/2012
24/07/2012
Final
125.0
19/05/2011
02/08/2011
Final
125.0
25/05/2010
16/08/2010
Final
120.0
28/05/2009
14/07/2009
Final
115.0
23/06/2008
18/08/2008
Final
105.0

21. 
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Potential Government Regulation and Laws
Acute shortage of domestic coal supply leading to lesser production than
forecasted in the Twelfth plan
Increase in cost of coal imports from countries like Indonesia leading to
huge losses in projects like Mundra
Stock price has fallen by 19% in one year due to coal shortage, Indonesia's
coal price increase impacting Mundra plant
Company waiting for strong energy security policy

22. 
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Short term investors should not look to invest in Tata Power
Investors should be aware of the CERC giving its decision about the tariff
and also till Tata Power replaces its coal import country from Indonesia to
some other place for its Mundra UMPP
It has started JV’s in countries like Georgia, South Africa and Australia
where there is huge scope of business
Our Recommendation is to BUY the stock as it is at very low levels now
and the improved tariff, better government policies, investment in foreign
countries will only improve its value.

24. Documents:
 Tata Power Annual Reports, Investor Presentation March 2013
Links:
 www.moneycontrol.com
 http://www.equitymaster.com/research-it/sector-info/power/PowerSector-Analysis-Report.asp
 http://indianpowersector.com/home/about/overview/
 http://www.sanasecurities.com/tata-power-company-limited
 http://www.moneyworks4me.com/indianstocks/large-cap/power/powergeneration-distribution/tata-power/analysis-and-overview
 http://www.tatapower.com/investor-relations/dividend-history.asp
 http://blog.theequityresearchproject.com/