Mumbai, January 11th, 2024: Tata Power, a major integrated power company, has seen its stock price skyrocket over the past year, rising nearly 70% on the back of good growth prospects. With a goal price of Rs. 450, which is 30% higher than where it is now, experts think the rally still has legs.
Exceptional Growth Across Businesses
The generation, transmission, and delivery businesses of Tata Power have all grown very quickly. The company is now the biggest integrated power company in India, with a working capacity of over 13 GW.
The business has come a long way in the area of clean energy. It now has 10 GW of renewable energy, which is more than 75% of its potential.
The goal is to have a business that is 100% green by 2030. Tata Power is also growing in new areas, such as infrastructure for charging electric vehicles and energy storage options.
Key Triggers for Ongoing Rally
According to Antique Stock Broking, the Tata Power rally is underpinned by multiple factors:
Lower Exposure to Loss-Making Tata Power CGPL
Since tariff cuts have made coal generation a smaller part of income, Tata Power CGPL’s loss-making activities have become much less of a drag. This has led to more money coming in.
Scaling Renewable Energy Portfolio
Tata Power’s green energy business could bring in Rs. 100 billion in EBITDA by FY27, which is three times as much as it does now. The large room for growth makes it a major value driver.
Pumped Storage Advantage
The planned pumped storage water plants by Tata Power should be worth more because they offer the lowest cost per unit of power.
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Capex Plan of Rs. 70,000 Crore in Tamil Nadu
Tata Power just this week announced a huge Rs. 70,800 crore investment plan for renewable energy projects in Tamil Nadu. The goal is to increase the amount of green energy it offers.
Over the next 5 years, the investments will be made by Tata Power Renewable Energy Limited (TPREL), a company that the company owns in full.
Upside Potential of 30%: Experts
Experts think that Tata Power has a lot of room to grow from where it is now.
Antique Stock Broking is the most optimistic, setting a goal price of Rs. 450, which is almost 30% higher than the current market price of Rs. 348. The company has kept its “Buy” rating on the stock, citing its strong growth possibilities.
A lot of other analysts also like Tata Power and have set goal prices between Rs. 400 and Rs. 450.