Tata Power shares have been rising since the start of the fiscal year 2023-24. Tata Power’s share price bottomed out at around 185 per share on the NSE at the end of March 2023, and it has since remained an ideal ‘buy on dips’ stock for investors. Tata Power’s share price has regularly reached new highs in the last two months, and the company has returned more than 80% to long-term investors in the current fiscal year.
Tata Power’s market capitalization has risen to nearly Rs. 1.09 lakh crore. Tata Power stock has been soaring as the company receives large orders on a regular basis. It recently received the Bikaner-Neemrana transmission project, which will increase renewable energy evacuation in India.”
1. Strong second-quarter guidance
According to Pace 360, Tata Power currently has a 5.5 GW clean energy portfolio, which the company plans to expand to 20 GW by 2030. A total of 3.7 GW of capacity is already under construction. On the back of strong deal flow, capacity additions, and higher profitability from Transmission and distribution assets, management has given guidance of doubling revenue, EBITDA, and PAT by FY27.
2. The focus is on the theme of power.
“One of the factors driving Tata Power share prices is the recent traction in the overall power sector,” said Manish Chowdhury, Head of Research at StoxBox.
With the company’s increasing focus on enhancing its renewable portfolio, we believe the company’s guidance of achieving 4x growth in profitability over FY22 levels by FY27 looks achievable. Furthermore, the company’s growing emphasis on business restructuring, as well as its entry into the transmission business, bodes well for future growth.”
3. Strong foundations
Atul Parakh, CEO of Bigul, highlighted the strong fundamentals of this Tata group company, saying, Tata Power has a strong order book driven by an increase in demand for renewable. It has aggressively expanded its renewable energy portfolio, establishing a strong presence in solar and wind power generation. This is perfectly aligned with the Indian government’s focus on a clean energy transition, making Tata a well-positioned player.
4. Outlook for Consistent Growth
Despite rising coal prices, Tata has shown financial resilience through consistent profitability and revenue growth. “Tata Group has performed well as well, adding to the positive sentiment surrounding Tata Power shares,” said Bigul’s Atul Parakh.
5. Share price target for Tata Power
Tata Power shares are expected to rise further. “Tata shares are looking strong on chart pattern,” said Sumeet Bagadia, Executive Director at Choice Broking. Shareholders of Tata Power can hold the stock for short-term targets of 360 and 375. However, while holding Tata Power shares, a trailing stop loss of 325 must be maintained.” However, when entering a new position in this Tata group stock, one must keep the stop loss at 325.”
