After India Ratings and Research upgraded the Tata Group company's long-term issuer rating from "IND AA" to "IND AA plus" and maintained the stable outlook, shares of Tata Power Co Ltd saw a record high today. In contrast to yesterday's BSE closing of Rs 356.95, the Tata Group shares increased 2.68% to a high of Rs 366.55. Conversely, on March 28, 2023, the share price of Tata Power dropped to a 52-week low of Rs 182.45.
Tata Power's shares shot up 65.55% in six months and gained 80.25% in a year. A total of 14.93 lakh shares of the company were traded on the BSE, representing a high transaction of Rs 54 crore. Tata Power's market value increased to Rs 1.16 lakh billion.
Tata Power has been upgraded to 'Add' by IIFL Securities
"Tata Power's diversification strategy sets it apart. According to the research, "We expect that Tata Mundra's section 11 will be extended until FY26, during which time earnings will increase by 32–45% even with stable coal prices. Tata Power is also benefited on two fronts: 1) expected pick up in power demand helping some of the IPPs which have negative economics; 2) improvement in consumption and decreased AT&C losses resulting to superior earnings in the distribution segment," stated IIFL Securities.
The stock is probably going to reach its target price of Rs 385 by the end of this month. ICICIDirect Research stated that a stop loss of Rs 342 can be set.According to the brokerage, the price has resumed its upward trend following a brief pullback above the 20-day exponential moving average (EMA). This indicates the emergence of increased purchasing demand.
Broker Sharekhan Anticipates that the Stock will cross the Rs 390 Threshold
"The government has set an ambitious target of 80 GW of new thermal power and 321 GW of new renewable power (RE) capacities by 2031-32, and the power sector is expected to grow strongly on peak power demand-supply shortfall over the next few years." By 2030, Tata Power wants to have installed 1.5–2 GW of renewable energy annually, bringing its portfolio up to 70% of total energy. Revenue, EBITDA, and PAT are forecast to double by FY27, with 90% of PAT coming from core business (up from 40% in FY23) by FY27E, according to the brokerage. The company has set an ambitious growth objective for the next three years.
From Rs 422 to Rs 450, Antique Broking's target price for Tata Power has increased. According to Antique, Tata Power is considering 12 GW of pumped hydropower in Western India, a region with a land bank that exceeds 36,000 acres. It stated that pumped hydro storage projects (PSPs) are less expensive than lithium-ion batteries and are well-established or tested models. At the lower end of the cost curve, Tata Power is developing the 1 GW Bhivpuri PSP (6 GWh), which will come with a cost of Rs 4,700 crore.
With a beta of 0.5, the stock has experienced relatively little volatility in the past year. Technically speaking, the stock's relative strength index (RSI) is 67.3, indicating that it is not trading in the overbought or oversold range. In comparison to the 5 day, 20 day, 30 day, 50 day, 100 day, and 200 day moving averages, Tata Power shares are currently trading higher.
In comparison to the same period last year, when it made Rs 935.18 crore, Tata Power recorded an 8.79% YoY increase in its consolidated net profit for the July–September 2023 quarter, coming in at Rs 1,017.41 crore. Revenue increased by 9% to Rs 15,442 crore during the reviewed period.
"Healthy balance sheet, operational excellence, and synergies across all business clusters" were the company's reasons for the growth in profits and revenue.
