Shares of Tata Power Company Ltd have delivered losses to investors in the short term. The power sector stock has come under bear attack as the scrip 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 stock slipped 7.50% in six months, 6.63% in two weeks and 4.20% in a week, indicating weakness in the near term.
On the other hand, Tata Power shares clocked double digit gain of 28% in a year and 88.38% in two years. In five years, the stock delivered multibagger returns of 640.1%.
Brokerage Sharekhan has a price target of Rs 540 on the Tata Group stock.
Tata Power has a well-planned strategy to shift towards clean energy and is aiming for 2.5 times rise in PAT by FY2030E over FY2024, said Sharekhan.
The company hosted an analyst meet at its 4.3GW cell and module manufacturing facility at Tirunelveli, Tamil Nadu. It aims to raise PAT (before minority) to Rs 10,000 crore in FY30, a 2.5 times growth over FY24,said the brokerage adding that capex of Rs 1.46 lakh crore is estimated from FY25-30 with 60% to be spent in the renewable business and 27% in transmission & distribution.
The company has raised its annual capex target to Rs 25,000 crore (£2.3 billion), up from Rs 22,000 crore previously.
Another brokerage JM Financial has a price target of Rs 481 for the stock.
Given the commissioning of its solar PV cell and module manufacturing facilities, execution momentum in renewables, anticipated awarding of new distribution licences within the next 18 to 24 months, and beginning of construction of PSPs and new hydro projects, said JM Financial. The brokerage believes there is a strong likelihood of the company achieving its 2030 targets.
Brokerage Motilal Oswal has a buy call on the stock with an SoTP-based price target of Rs 509.
"Tata Power targets 23 GW of operational green generation capacity by FY30, with 65% of total capacity operational by FY30 comprising renewable energy. A phased commissioning of 5.6 GW of projects is planned between 4QFY25 and 2QFY27, with significant progress in land acquisition (40%), PPA signings (90%), and transmission connectivity (80%)," said Motilal Oswal.
ICICI Securities has a buy call with a price target of Rs 541.
Tata Power hosted its Investor Day at its 4.3GW solar cell and module factory in Tirunelveli, Tamil Nadu on 6 Dec,’24.
ICICI Securities in its report talked about the following developments from the company’s end.
Upping the capex target
The capex target has been revised upwards. The new capital expenditure estimate is INR 1.5trn till FY30 (vs earlier target of INR 0.6trn till FY27). Out of which, 60% will go towards renewables, 10% towards pumped storage.
Target of 2.5 times profit by FY30
It stated revenue target of Rs 1 lakh crore by FY30 (vs earlier target of Rs 1 lakh crore by FY27; Rs 615 bn in FY24), EBITDA target of Rs 300 bn (vs earlier target of Rs 200 bn by FY27; Rs 127 bn in FY24) and profit (profit after tax before minority) target of Rs 100 bn (vs earlier target of Rs 76 bn by FY27; Rs 41 bn in FY24). Revenue target is not meaningful given the fact that >70% of current revenue comes from regulated businesses (fuel cost is pass through).
In the current session, Tata Power shares wre trading on a flat note at Rs 410.55 against the previous close of Rs 412.60 on BSE. The stock has gained 28.19% in a year and risen 24.40% in 2024. The stock has been highly volatile with its one year beta at 1.6.
In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 39.2, signaling the stock is trading neither in the overbought nor in the oversold zone.
Market cap of Tata Power stood at Rs 1.31 lakh crore on BSE. A total of 1.37 lakh shares of the firm changed hands amounting to a turnover of Rs 5.68 crore. Shares of Tata Power climbed to a 52-week high of Rs 494.85 on September 27, 2024 and fell to a 52 week low of Rs 312.60 on December 21, 2023.