Tata Power-profit was Rs3.5b (up 12% YoY). -Motilal Oswal

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Tata Power (TPWR IN; Mkt Cap USD7.4b, CMP Rs1, 376, Neutral)

Reported consolidated profits were Rs6.8b and adjusted for one-offs, the profit was Rs3.5b (up 12% YoY). 

In 2QFY11, Tata Power's share of revenue from coal mining companies (KPC/Arutmin) was Rs15.4b (up 33% YoY). The transaction of ~15% stake sale in a mine Holdco to Olympus to raise US$300m has not yet 

been affected, pending approval from lenders and last date to sign the agreement had been extended to 19 November 2010. 

We expect TPWR to report consolidated net profit of Rs18.8b in FY11 (up 27% YoY) and Rs25.4b in FY12 (up 35% YoY). We arrive at an SOTP-based target price of Rs1,265/share. At CMP, the stock trades at 

a PER of 18x FY11E and 14x FY12E. Neutral.