Tata Power becomes 6th Tata group firm to cross Rs 1L cr m-cap mark; analyst views on stock

Tata Power Company Ltd soared 10 per cent in Thursday's trade and was the most-active stock on NSE in terms of turnover. In the process, it became the sixth Tata group company to cross the market capitalisation (m-cap) mark of Rs 1 lakh crore.

Earlier this week, Trent Ltd became the fifth Tata group firm to cross the Rs 1 lakh crore mark. Tata Consultancy Services Ltd, Titan Company Ltd, Tata Motors Ltd and Company Tata Steel Ltd are four other group companies with market caps exceeding Rs 1 lakh crore, as per data compiled from corporate database AceEquity.

The Tata group stock soared 9.55 per cent to hit a high of Rs 322.25 in trade today and logged a turnover of Rs 2,217 crore on NSE. At the prevailing level, the stock was commanding m-cap of Rs 1,01,787.54 crore.

The fresh buying on the counter was seen as JM Financial upped its rating on Tata Power to 'Buy' and suggested a target of Rs 350 on the counter. Tata Power's recalibrated strategy, JM Financial said, involves tapping high-margin group captive RE (renewables) opportunities.

"This, coupled with the visible resolution of the Mundra issue, positions the company for accelerated growth. We forecast revenue, Ebitda and PAT CAGRs of 15 per cent, 23 per cent and 32 per cent, respectively, over FY23-26, supported by increasing asset base and improved margin profile," it said.

A total of  74,53,52,963 individual shareholders, with up to Rs 2 lakh worth shares, held 23.33 per cent stake in the Tata group company at the end of September quarter. The scrip is up 50 per cent year-to-date. 

Tata Power recently hosted its analyst day at its Bhivpuri Hydro Power plant to provide an update on  its pumped storage plants (PSP) strategy. "The key message was that the company, after signing a MoU with government of Maharashtra, is eyeing to execute 2.8GW of PSP at  Bhivpuri (1GW) and Shirawta (1.8GW) in Raigad district by FY28 at a capex of Rs130bn. On  top of this, management has identified an additional potential 9GW of PSP, which could support RTC of 30GW in Maharashtra itself," said Investec in a recent note.

Tata Power has estimated a capex of  Rs 60,000 crore till FY27, of which 45 epr cent will be spent on renewables businesses. The management  expects revenue, Ebitda and profit after tax to double by FY27. Investec has retained its hold rating on the stock with a target of Rs 277. Antique Stock Broking has a target of Rs 305 on the stock. Axis Capital has add rating on the stock with a target of Rs 296.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.     

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