Tata Power vs Adani Power: Share price targets, technicals, outlook and more 

Shares of power producers Tata Power Company and Adani Power have generated multibagger returns for shareholders in time periods ranging from two years to 10 years. Adani Power stock has risen 527%, 922% and 1,393% in three years, five years and ten years, respectively. In comparsion, rally in the Tata Power stock has been subdued. Tata Power stock climbed 112%, 140%, 654% and 456% in two two years, three years, five years and ten years, respectively. 

In terms of one-year movement, both Tata Power and Adani Power shares are high volatility stocks with betas of 1.5 and 1.6, respectively. 

Tata Power 

In the current session, Tata Power stock slipped 1.01% to Rs 460.80 today against the previous close of Rs 465.50. Market cap of Tata Power fell to Rs 1.47 lakh crore mark on BSE. A total of 3.91 lakh shares of the firm changed hands amounting to a turnover of Rs 18.07 crore. Shares of Tata Power stock fell to a 52-week low of Rs 230.75 on October 26, 2023. 

The power sector stock has gained 39.51% in 2024 and risen 82% in a year. 

In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 56.2, 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.

Price Targets and Outlook 

Brokerage Nomura India has assigned a target price of Rs 560 for Tata Power. The outlook for the Tata group firm remains robust as the company aims to deliver a significant EBITDA CAGR over FY24-27.

The brokerage said Tata Power is likely to perform robustly on its EPC business, aided by a growing order book. Currently, the order book stands at Rs 15,700 crore. The power sector firm is also seen scaling up its recently commissioned 4.3GW cell-to-module facility. Tata Power could see a sharp jump in profitability from the Odisha DISCOM business, said Nomura India. 

In September end, global brokerage Morgan Stanley double upgraded its stance on the Tata Group firm to overweight. It also raised 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.

ADANI POWER

In the current session, the Adani Group stock was trading on a flat note at Rs 642 against the previous close of Rs 645 on BSE. Market cap of Adani Power fell to Rs 2.47 lakh crore. A total of 0.62 lakh shares of the firm changed hands amounting to a turnover of Rs 4.01 crore on BSE.

In terms of technicals, the Adani Group stock is trading neither in the overbought zone nor in the oversold zone, signals the relative strength index (RSI) of Adani Power which stands at 46.7.

Adani Power stock is trading higher than the 5 day, 200 day but lower than the 10 day, 20 day, 30 day, 50 day, 100 day, 150 day moving averages, signaling the stock is in a downtrend.

Adani Power stock has gained 21.58% in 2024 and risen 82.52% in a year. 

Outlook and Price targets 

Ameya Ranadive, CMT CFTe, Sr Technical Analyst at StoxBox said, "Adani Power has shown resilience at the Rs 620-600 support range, making it a 'buy on dips' candidate. Despite being below its key moving averages, including the 20, 50, and 100 DEMAs, the stock continues to hold above its 200-day EMA, which is a crucial support level. The technical indicators suggest that Adani Power has the potential to see a move towards Rs 700-725 if the current support levels hold firm. For traders, the stock offers an attractive risk-reward setup, with a stop-loss placed just below Rs 615 to manage downside risk. The technical landscape suggests that Adani Power is well-positioned for an upward move once market sentiment turns more favorable."

Jigar S Patel of Anand Rathi said, "Recently, Adani Power broke through a key bearish trendline on the daily chart, suggesting a potential reversal in momentum from its previous downtrend. Prior to this breakout, the stock had formed a double bottom pattern, a bullish reversal structure that indicates strong support and a potential shift in price direction. This double bottom was accompanied by a bullish divergence in the Relative Strength Index (RSI), where the RSI moved higher while the price remained low, signalling weakening selling pressure and a possible move upward. This bullish divergence occurred near a significant demand zone and previous breakout range, which further enhances the positive sentiment surrounding the stock. These technical factors suggest that Adani Power is positioned for a strong upward move. As a result, a long position is recommended in the price range of Rs 655-675, with an upside target of Rs 755. To manage risk, a stop-loss should be placed at Rs 620, with close attention to a daily close below this level to exit the position."