Shares of Tata Power Ltd and Adani Power are in correction mode in the short term. Tata Power stock has been falling during various time periods during the last one year. The Tata Group stock has slipped 18% in three months and 9% in a year. Adani Power shares too fell 23.53% in six months and 12% in the last one year.
The two power sector stocks have seen high volatility with beta of 1.6 in the last one year.
While Tata Power stock is trading near its 52-week low of Rs 326.25 reached on February 17 this year, Adani Power shares have surged 16% from their 52-week low of Rs 430.85 hit on November 21, 2024. Still, the Adani Group stock has lost 44.18% from its 52-week high of Rs 896.75. Tata Power
In the current session, Tata Power shares were trading 2.65% lower at Rs 341.75 on BSE. Market cap of the firm slipped to Rs 1.09 lakh crore. The stock is neither oversold nor overbought on charts, signals its relative strength index (RSI), which stands at 45.4. In terms of price action, the stock is trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Tata Power shares rose 71% in two years. In five years, the stock delivered multibagger returns of 592%.
HSBC has assigned a price target of Rs 345 against the earlier Rs 300 for the Tata Power stock.
"We update our estimates and valuation to factor in project progress, a strong start to solar module/cell manufacturing, and the start of new programmes like pumped storage and hybrid. We increase our FY25-26e EPS estimates by 9-13% and introduce FY27e. We roll forward our valuation basis and continue to use a sum-of-parts valuation, resulting in a new target price of Rs 345 (from Rs 300), which implies 2% upside. We upgrade to Hold (from Reduce)," said HSBC.
Jigar S Patel, Senior Manager - Equity Research at Anand Rathi said, " Support will be at Rs 325 and resistance will be at Rs 360. A decisive move above the Rs 360 level may trigger a further upside of Rs 370. The expected trading range will be between Rs 325 and Rs 370 for the short-term."
Adani Power
Adani Power stock was trading on a flat note at Rs 500 in the current session. Market cap of the firm climbed to Rs 1.93 lakh crore. A total of 6 lakh shares of the Adani Group firm changed hands amounting to a turnover of Rs 30.26 crore on BSE.
In terms of technicals, the Adani Group stock is trading neither in the oversold nor in the overbought zone, signals the relative strength index (RSI) of Adani Power which stands at 49.8.
Adani Power stock is trading higher than the 5 day, 10 day, 20 day but lower than the 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
Ventura Securities has assigned a price target of Rs 806 on the Adani Power stock.
Adani Power is India's largest private pure-play thermal power producer, and is strategically positioned with robust capacity expansion plans to address this critical demand. It remains committed to capacity expansion, targeting 30.67 GW by FY31, which is expected to increase its share in India’s thermal power market, the brokerage said.
"Power demand in India is surging, driven by rising manufacturing activities and growing adoption of white goods & gadgets in households. With RE unable to fully meet the rising energy needs, the widening peak demand-supply gap underscores the necessity of augmenting base load thermal power capacity," it added with a 'buy' with a target price of Rs 806.
Global brokerage Jefferies has a price target of Rs 660 apiece with a buy call.
Adani Power is on its journey to raise capacity by 1.7 times from 17.6 GW to 30.7 GW by 2030. Land requirements and financing plans are in place. Close coordination with BHEL for equipment delivery and in-house EPC are ensuring capex is on schedule, it said.
"Thermal capacity in an overall peak deficit scenario with merchant exposure is positive," it said while initiating coverage with a 'buy' and a target price of Rs 660 apiece. The foreign brokerage firm expects past Power Purchase Agreement issues returning and affecting EBITDA; lower merchant realisations; demand disappointment; and payment delays for 1.6 GW Godda power plant as key risks for the company.