New Delhi: Tata Power said that Crisil Ratings has upgraded its outlook on the company to ‘positive’ on expectation of an improvement in operating profitability this fiscal. The ratings agency had earlier assigned a ‘stable’ outlook on the company, Tata Power said in a regulatory filing. “CRISIL Ratings Limited has upgraded its outlook on the company (Tata Power) from AA/Stable Outlook to AA/Positive Outlook,” it said.
The revision in outlook reflects the possibility of better-than-expected business risk profile, if the improvement in operating profitability in fiscal 2024, across power generation and distribution business, sustains along with a continuing healthy financial performance with consolidated net leverage (ratio of net debt to EBIDTA) remaining within rating threshold, it said.
The increase in operating profitability of Tata Power since fiscal 2023, is mainly on account of better profitability of its Mundra Ultra Mega Power Project (Mundra plant), improved efficiency in Odisha discom business and continued growth in renewable energy (RE) business with steady capacity addition.
Profitability during the last fiscal year was also supported by higher margins in overseas coal mining business amid elevated coal prices.
