Tata Power shares plunge 18% on unexpected Rs 115 cr loss in Q1

Tata Power today posted an unexpected net loss of Rs 115 crore in the April-June quarter, hit by higher finance costs and foreign exchange losses.

Analysts had forecast a net profit of Rs 264 crore compared with Rs 146 crore in the same period a year ago.

The Tata Power stock fell almost 18 percent on the poor results.

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At 2:40 pm the stock was trading at 17.85, underperforming the broader Sensex and the Nifty.

Tata Power, part of the salt-to-steel Tata Group, has been expanding its business abroad, including in Africa and the Middle East.

But its biggest domestic power plant, Mundra, located in Gujarat, has come under financial stress as a regulatory decision allowing it to pass on the rising costs of imported coal to customers has yet to be implemented.

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Ratings agency Moody's cut its ratings outlook to "negative" from "stable" on Tata at the start of July, citing "material covenant breaches on bank debt" for the Mundra project.

Reuters