Tata Power Share Price: Will it touch 300?

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Tata Power share price

Tata Power share price: Introduction

Tata Power share price: Investors who have been in the market for over a decade would know that Tata Power's share price was in the news back in the late 2000s. However, post the 2008 market crash, the Tata Power stock lost investors' interest. Tata Power stock traded between Rs 70 and Rs 130 for more than a decade. 

Since 2020, the company has revived itself and worked on new strategies for growth. In the last 18 months, Tata Power's share has more than tripled. In 2022, Tata Power has delivered over 10% returns to its investors. In April, Tata Power's shares hit an all-time high of Rs 298. Will it cross it's all-time high soon?

Quick Fact: Tata Power is not a new company. It was founded in 1915 and has over a century of expertise in technology and leadership. The company has revived its business in the last few years by shifting focus to the EV space and renewable energy.

Tata Power share price: Deepdive

Tata Power Share Price: Ambitious Growth Plan

The company has ambitious growth plans and has scaled up its earning target. Let us look at what companies have planned:

  • Tata Power expects its Profit After Tax (PAT) to more than quadruple by FY27 from FY22. In FY20, the company aimed to more than triple its PAT by FY25.
  • Tata Power's profits have nearly doubled from around Rs 1,230 crore in FY20 to Rs 2,300 crore in FY22. The bottomline growth was led by higher profits from coal mines in Indonesia. 
  • If the company can achieve the said numbers, its Return on Equity (RoE) and Return on Capital (RoC) are expected to increase to more than 13% and 11%, respectively.

 Tata Power Share Price: Focus on Green Energy

  • Tata Power has kept Rs 75,000 crore for green energy in the next 5 years.
  • The company has stated that Rs 10,000 crore will be spent in FY23 to take the total capital expenditure (CAPEX) during FY23 to Rs 14,000.
  • Tata Power has also taken a pragmatic approach to achieve its renewable energy targets and added 707 megawatts (MW) of renewable capacity in FY22.
  • The recent moves have increased Tata Power's clean and green portfolio to 34% of total capacity. The company aims to raise this to 60% in the next five years and 80% by 2030.
  • Tata Power is also best placed to benefit from India’s push to increase renewable energy capacity to 500GW by 2030. 

Tata Power Share Price: Subsidiary raises Rs 2000 crore in green energy push

  • Tata Power's subsidiary, Tata Power Renewable Energy, last month raised Rs 2,000 crore by issuing 83.6 million equity shares to BlackRock-backed GreenForest New Energies Bidco.
  • The deal is part of the Rs 4,000 crore investment announced by Tata Power in April for its green energy business.
  • Tata Power said that it would offload a 10.53% stake in its renewable energy arm to a consortium backed by BlackRock and Mubadala.
  • The Competition Commission of India (CCI) has already approved the deal, paving the way for the issuance of shares in tranches.

Tata Power share price insight

Out of 1,238 trading days that Tata Power stock has seen in the last 5 years, below are the Tata Power share price movement insights:

  • Tata Power share price ended in green on 630 trading days
  • Tata Power share price ended in red on 593 trading days

Tata Power share price ended flat on 15 trading days

Tata Power Q1FY23 Earning

  • Net Profit: Tata Power reported a 103% jump year-on-year in its consolidated net profit at Rs 795 crore for the June quarter. 
  • Revenue: Tata Power's revenue increased by 43% to Rs 14,495 crore in the June quarter against Rs 10,132 crore in the year-ago period.
  • EBITDA: EBITDA for Q2FY23 stood at Rs 2,107 crore against Rs 2,365 crore in Q1FY22.

Tata Power Share Price: Analysts' view

ICICI Securities: The firm has given a SoTP-based target price of Rs 262 per share but changed the rating to ADD  (from BUY) due to the recent rally in Tata Power's share price. The company aims to grow its revenue and PAT 3X and 4X from the FY22 levels of Rs 426 billion and Rs 23 billion, respectively. As per the firm, in the long term, the potential of Tata Power's business is good. Tata Power is the best placed private player in the power sector.

MIB Securities: The firm has given a BUY rating with a SOTP-based target price of Rs 300 per share. As per the firm, Tata Power's focus will be on power transmission and distribution, which offers stable ROEs and upside from lower AT&C losses. They believe this will give more predictability and stability to earnings. 

Edelweiss: The brokerage firm has downgraded Tata Power shares to HOLD with a target price of Rs 250 per share. As per analysts - Resilience, Sustainability, and Consumer orientation are the three pillars of Tata Power 2.0 and are visible in its actions. "New businesses’ low profitability is transitory accentuated by abrupt market changes – commodity/forex inflation. But, this could start zooming once the situation normalizes and it attains critical mass. 

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