Shares of The Tata Power Company rose to a new all-time high of Rs 494.85 on the NSE after Morgan Stanley upgraded the company to 'overweight' from 'underweight'. The global brokerage company also raised the price objective for Tata Power shares to Rs 577, implying a 1% gain from the previous closing.

Morgan Stanley analysts praised Tata Power's successful blend of solid, regulated operations and market-linked initiatives such as the green platform, transmission, and pumped hydro projects. This diversified approach is expected to deliver profit growth while maintaining a respectable return on capital used, excluding the Mundra project, and limiting indebtedness. 

The brokerage business also recognized the quality of Tata Power's planned development, notably the contributions from its green platform when compared to its prior performance. Domestic stockbroker Motilal Oswal described the power industry as a "colossal multi-decade investment opportunity," with Tata Power among its top selections.

It launched covering on Tata Group's shares earlier this week, with a 'buy' rating and a Rs530 price target. The Tata Group firm's major development drivers include diversified operations and scalability, it stated.

Tata Power is experiencing a multi-year business change, with renewable energy projects accounting for 45 percent of expenditure in FY23-27. This would help increase the proportion of core earnings from 40% to 90% by FY23-27, according to MOFSL analysts.

"At 13 times EV/Ebitda (long-term average: 10 times), we believe there is scope for further re-rating given lower earnings volatility (vs. history) and strong 14 percent PAT CAGR in FY24-27," said the MOFSL.

At 10:48 a.m., Tata Power shares were trading more than 3% higher on the NSE at Rs 490.60. So far this year, the stock is up 48 percent, compared to an 18 percent increase in the benchmark Nifty. In the last year, the counter has increased by 88 percent. In comparison, the Nifty gained 30% over this time.