Tata Power Submits ₹221 Crore Insurance Claim After Trombay Fire Incident

In a recent update, Tata Power Company Ltd submitted an insurance claim of approximately ₹221 crore for damages sustained during a fire at its Trombay Plant (Unit 5). The fire, which occurred on September 24, 2024, affected critical infrastructure including the cable vault and the control room. As of October 31,  2024 at 1:43 PM, Tata Power share price stands at ₹441.90, demonstrating resilience amid broader market fluctuations.

Details of the Insurance Claim

The company has indicated that the claim is currently undergoing assessment by the insurer. An ad hoc advance of ₹50 crore has already been disbursed, while the final settlement is contingent upon a thorough evaluation of the damages. 

Preliminary estimates suggest that the total damage may reach ₹221 crore, excluding additional costs related to business interruptions. These potential costs will depend on the duration required to fully restore operations at the facility.

Minimal Financial Impact Anticipated

Despite the significant damages, Tata Power has reassured its stakeholders that the financial impact of this incident is expected to be minimal, largely due to its insurance coverage. The company stated that any costs incurred would primarily be limited to policy deductibles. 

The overall production and services at the plant remain largely unaffected, ensuring that the overall financial standing of Tata Power will not be materially compromised.

Q2 FY25 Financial and Stock Performance

In the second quarter of the current financial year, Tata Power reported a net profit of ₹1,093 crore, reflecting a 7% increase compared to the same period last year. However, revenue for the quarter decreased by 3%, amounting to ₹15,698 crore, falling short of the anticipated ₹16,957 crore. Tata Power’s EBITDA increased by 23% to ₹3,808 crore, with margins expanding by 430 basis points to reach 23.9%.

As of October 31, 2024 at 1:43 PM, Tata Power shares were trading at ₹441.90 on the Bombay Stock Exchange with an intraday high of 444.80. The stock has demonstrated remarkable growth, with a 78.59% increase over the past year and a year-to-date rise of 28.56%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.