Shares of Tata Power have delivered multibagger returns in five years. The Tata Group stock, which closed at Rs 59.35 on October 3, 2019 stood at Rs 469 today, giving 708% returns during the period. In comparison, Sensex climbed 119% in five years.The multibagger stock has delivered returns of 114% and 178% in two years and three years, respectively.
In the current session, Tata Power stock was trading on a flat note at Rs 468.40 against the previous close of Rs 471.70. Market cap of Tata Power fell to Rs 1.5 lakh crore mark on BSE. A total of 4.53 lakh shares of the firm changed hands amounting to a turnover of Rs 21.21 crore. Tata Power shares slipped to a 52-week low of Rs 230.75 on October 26, 2023. The power sector stock has gained 42% in 2024 and risen 82.64% in a year. The stock has a beta of 1.4, indicating high volatility in the last one year. In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 63.3, signaling the stock is trading neither in the overbought nor in the oversold zone. Tata Power shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Global brokerage Morgan Stanley double upgraded its stance on the Tata Group firm to overweight last week. It also raised its price target by 23% to Rs 577 from Rs 337 earlier. Morgan Stanley said Tata Power is uniquely positioned in the current cycle with large merchant capacity, a steady growth in the core business, a pickup in renewable growth and lean balance sheet. "The renewable energy platform could see growth surprises, driven by rising distribution of RPO obligations and an evolving C&I market," it added. Motilal Oswal initiated coverage on the company, naming it a top pick in the Indian power sector. The brokerage set a target price of Rs 530, with a 'buy' rating. The brokerage highlighted Tata Power's diversified operations and scalability as key growth drivers. The company is undergoing a multi-year business transformation, with plans to allocate 45% of its capital expenditure from fiscal 2023 to fiscal 2027 to renewable energy projects. This strategic shift is expected to increase the share of core earnings from 40% to 90% over the same period, according to the note. In its report, Motilal Oswal also discussed broader trends in the Indian power sector, estimating an investment opportunity of Rs 40 lakh crore over the next decade. This potential includes Rs 34 lakh crore in firm capital expenditure and Rs 8 lakh crore in optionality, with generation, transmission, and smart metering accounting for 86%, 10%, and 4% of this investment, respectively.