Tata Power, Adani Power, NTPC, Power Grid: Price targets, technicals, outlook, returns and more

Shares of Tata Power, Adani Power, NTPC and Power Grid-four major power producers are in focus since the Ministry of Power finalised National Electricity Plan (NEP) for Central and State transmission systems, with a massive investment of Rs 9.15 lakh crore. Buoyed by strong investor sentiment after the power ministry's announcement, shares of Tata Power, NTPC and Power Grid hit their record highs on BSE.

Tata Power stock hit a record of Rs 494.85 on September 27, 2024  and NTPC scaled an all-time high of Rs 448.30 on September 30 this year. PSU major Power Grid's stock also touched a record high of Rs 366.20 on September 25 this year. The power ministry made the announcement on same day during market hours. With three stocks hitting record highs within days, investors are trying to guess whether there is more steam left in these power stocks. 

Here's a look at the price targets, stock returns and technicals  of shares of Tata Power, Adani Power, NTPC and Power Grid. 

TATA POWER 

Tata Power stock slipped 1.94% to Rs 471.65 today against the previous close of Rs 481. Market cap of Tata Power fell to Rs 1.5 lakh crore mark on BSE. A total of 8.50 lakh shares of the firm changed hands amounting to a turnover of Rs 40.04 crore. Tata Power stock slipped to a 52-week low of Rs 230.75 on October 26, 2023. 

The power sector stock has gained 43% in 2024 and risen 79% in a year. The stock has a beta of 1.4, indicating high volatility in the last one year. 

In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 71.7, signaling the stock is trading neither in the overbought 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 

Global brokerage Morgan Stanley double upgraded its stance on the Tata Group firm to overweight last week. It also raised its 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 slipped 1.21% to close at Rs 645.50 against the previous close of Rs 653.40 on BSE. Market cap of Adani Power fell to Rs 2.48 lakh crore. A total of 4.99 lakh shares of the firm changed hands amounting to a turnover of Rs 31.93 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 46.2.

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

Adani Power stock has gained 23% in 2024 and risen 76% in a year. The stock has a beta of 1.6, indicating high volatility in the last one year. 

Outlook and Price targets 

Ameya Ranadive, CMT CFTe, Sr Technical Analyst at StoxBox said, "Adani Power is currently consolidating in a tight range between Rs 700-620, signaling indecision among traders. The stock faces significant resistance at the 20, 50, and 100-day exponential moving averages (EMAs), which are acting as barriers to further upward momentum. Despite this, the stock remains in a 'no-trade zone' for now, making it a candidate for a buy-on-dips strategy. The technical picture would turn bearish only if Adani Power closes below Rs 611, which would signal a potential downside move. On the upside, a sustained close above Rs 720 could mark the beginning of a strong bullish phase, with potential targets of Rs 780 and higher," said Ranadive. 

"Such a breakout would signal renewed buying interest and could attract momentum traders. Until then, the stock is likely to remain range-bound. Investors are advised to wait for confirmation before taking any positions. A breakdown below Rs 611 would invalidate the bullish thesis, while a breakout above Rs 720 would confirm the next leg of the rally, " added Ranadive.

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."

NTPC

The NTPC stock ended 1.05 percent lower at Rs 435.40 today. NTPC's market cap fell to Rs 4.22 lakh crore. Total 4.43 lakh shares changed hands amounting to a turnover of Rs 19.41 crore on BSE.

In terms of technicals, the relative strength index (RSI) of NTPC stands at 67.8, signaling it's trading neither in the overbought nor in the oversold zone. The stock is trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 150 day moving averages.

The stock has a high beta of 1.5, indicating high volatility in a year. 

The stock has risen 40.68 per cent this year and gained 80.55% in a year. It rose 211% in the last three years. 

Price targets and Outlook 

ICICI Securities has a price target of Rs 495 for the NTPC stock. 

"NTPC has demonstrated its ability to execute RE capacities in a timely manner and has set a target of 60GW by 2032. As of Mar’24, it has locked-in capacity of 20GW, operational capacity of 3.5GW, and under construction capacity of another 5GW, upcoming capacities would start contributing significantly to profitability in coming years. We estimate revenue of Rs 11700 crore, EBITDA of Rs 95–100 billion for its portfolio. EV to EBITDA remains the best valuation metric to analyse NGEL’s RE portfolio. Retain BUY and price target of Rs 495 on NTPC," said ICICI Securities.  

Motilal Oswal has assigned a price target of Rs 450 to the NTPC stock.

"We are cautiously optimistic on thermal, NTPC, excluding NGEL, is trading at FY27E PB of 1.6 times, which we view as reasonable (and not inexpensive). NTPC’s FY27E dividend yield at 2.6 per cent compares poorly with Power Grid's 3.5 per cent," said the brokerage.

POWER GRID  

Power Grid shares fell 1.90% to Rs 344.20 today against the previous close of Rs 350.85 on BSE. Market cap of the firm slipped to Rs 3.29 lakh crore. A total of 9.84 lakh shares of Power Grid changed hands amounting to a turnover of Rs 34.05 crore. Power Grid shares have a one-year beta of 1.3, indicating very high volatility during the period.      

The stock fell to a 52-week low of Rs 193.80 on October 9, 2023. 

In terms of technicals, the relative strength index (RSI) of Power Grid stands at 57.2, signaling it's trading neither in the overbought nor in the oversold zone. Power Grid shares are trading higher than the 20 day, 30 day, 50 day, 100 day, 150 day, 200 day but lower than the 5 day and 10 day moving averages.

Power Grid stock has risen 45 per cent this year and gained 73% in a year. It rose 139.28% in the last three years. 

Price targets and outlook 

Shares of Power Grid received a thumbs up from global brokerage firm Goldman Sachs which set a target price of Rs 370 with a buy rating.

The brokerage said the government has upgraded the transmission capex estimate to $110 billion. An 8% plus transformation capacity CAGR is projected for the company, with GH2 and PSP integration also considered. 

According to Goldman Sachs, Power Grid is likely to become the largest beneficiary of the $500 billion+ grid TAM estimate between FY24 and FY50.

Motilal Oswal has a price target of Rs 425 for the Power Grid stock. 

The brokerage calls Power Grid a leading player to tap into the Rs 2 lakh crore transmission opportunity in the Indian power sector. "Despite virtually no commodity and minimal execution risk, Power Grid boasts of a higher dividend yield compared to other transmission or city gas utilities, which protects downside on the stock," Motilal Oswal said.