Tata Power shares hit record high, can they cross Rs 475 mark?

Shares of Tata Power Company Ltd hit a record high on Tuesday amid highly volatile trade in the broader market. Tata Power shares surged 4.79% to a high of Rs 436.25 against the previous close of Rs 416.30 on BSE. The power sector stock has gained 30% in 2024 and risen 120% in a year. Market cap of Tata Power climbed to Rs 1.33 lakh crore on BSE. A total of 26.25 lakh shares of the firm changed hands amounting to a turnover of Rs 111.54 crore. Later, the stock ended 3.23% higher at Rs 429.75 on BSE. Tata Power stock declined to a 52-week low of Rs 193.05 on April 19, 2023.

In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 63.6, signaling the stock is trading neither in the oversold nor in the overbought zone. Tata Power shares stand higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The Tata Group stock has a one-year beta of 0.8, indicating low volatility during the period.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher said, "As mentioned earlier, the stock continues to maintain the strong uptrend with at regular intervals making a higher lows formation pattern on the daily chart and has picked up well in the last five months. It has consistently maintained above the significant 50EMA level which has been acting as a good support zone and currently, it has retested the previous peak zone of Rs 433 levels just to move above hitting the all time 52-week high level of Rs 436.15 to further improve the bias and anticipate for further rise in the coming days. The stock has got upside potential targets of Rs 448 and Rs 474 visible for the near-term time frame. Currently, the Rs 380 zone would be an important support level to be watched for and only a decisive breach below this zone shall weaken the bias."

Gaurav Bissa, VP, InCred Equities said, “Tata Power has been in a strong structural uptrend and managed to sail through the volatility quite comfortably. It earlier witnessed a bullish flag breakout on daily charts, which gave a push to the stock price towards Rs 400 levels. Tata Power has been consolidating since the last few days. However, it is forming an interesting pattern on point and figure charts. It will witness a bullish abc breakout follow through on a close above Rs 427 which can push it towards Rs 476 levels.”

JM Financial has a target of Rs 439 for the Tata Power stock.

Antique Broking has a target of Rs 450 for the power sector stock.

“We have added the scope of potential windfall gains from spot market sales from CGPL, assuming PPA negotiations fail through. We assume this could be 30% of total PPA, which is exposed to Punjab, Haryana and Rajasthan," said the brokerage.

Last week, Tata Power said it has received a letter of intent (LoI) from REC Power Development and Consultancy to acquire the Jalpura Khurja Power Transmission project at an estimated cost of Rs 838 crore.

The project special purpose vehicle (SPV) will be developed on a build-own-operate-transfer basis to provide transmission services for 35 years from the scheduled date of commercial operation which is 18 months from the date of SPV acquisition, the company said on Friday.

Meanwhile, Sensex which touched a record high of 75,124 in early deals closed 59 pts lower at 74,683 on Tuesday. Nifty ended 23 pts lower at 22,642. The 50-stock index had surged to a record 22,768 in morning trade.