Tata Power shares see bull run since December 2023; here are short & long-term price targets

Shares of Tata Power Co Ltd, which were regarded a defensive bet for long, have delivered 41% returns in the last three months. The Tata Group stock took 20 months to breach the record high touched in April 2022. It hit a high of Rs 298.60 on December 6, 2023. Earlier, the Tata Power stock hit an all-time high of Rs 298 on April 7, 2022. However, the stock saw a record breakout from the range-bound trade and crossed the key Rs 300 mark at the end of last year. Since then, the stock has been making record highs. 

Amid the strong uptrend, the stock hit its all-time high of Rs 361.95 on January 12, 2024.  By the end of this month, the stock is likely to hit a target of Rs 385. One can fix a stop loss of Rs 342, said ICICIDirect Research. 

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The brokerage said price has resumed uptrend post shallow retracement above 20 days exponential moving average (EMA). This signals that elevated buying demand emerged. 

Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher expects the stock to hit Rs 380 mark if it decisively breaches the Rs 335 level.  

"The stock has witnessed a decent rally in the last 2 months gaining from Rs 230 zone to scale the high level of Rs 335 zone where it is showing some resistance with the indicators racing to their highly overbought zone and with slight consolidation seen one can expect for some cooling off in the coming days. Further ahead, the stock can carry on with the momentum once a decisive breach above Rs 335 level is confirmed and expect for next targets of Rs 358 and Rs 380 levels. The near-term support is near Rs 318 levels and one can expect for further upward movement with bias maintained strong. Only a decisive breach below Rs 305 zone shall weaken the bias to some extent," said Koothupalakkal.  

Brokerage Sharekhan expects the stock to hit the Rs 390 mark.  

"The power sector is expected to grow strongly on peak power demand-supply shortfall over for next few years; government has set ambitious target of 80 GW of new thermal power and 321 GW of new renewable power (RE) capacities by 2031-32. Tata Power plans to install 1.5-2 GW of renewable energy every year with a target to increase its renewable power portfolio to 70% of total portfolio by 2030. The company has set an aggressive growth target for next 3 years with Revenue/EBITDA/PAT expected to double by FY27 with 90% of PAT coming from core business (versus 40% in FY23) by FY27E," said the brokerage.

The Tata Group stock ended 0.29% higher at Rs 358.70 on BSE on Monday. Tata Power shares hit an intraday high of Rs 360.10 against the previous close of Rs 357.75 on BSE. On the other hand, Tata Power stock fell to a 52 week low of Rs 182.45 on March 28, 2023 and hit its all-time high of Rs 361.95 on January 12, 2024. 

The Tata Group stock has gained 73.66% in a year and zoomed 62.23% in six months. Total 9.08 lakh shares of the firm changed hands amounting to a high turnover of Rs 32.39 crore on BSE. Market cap of Tata Power rose to Rs 1.14 lakh crore.   

Antique Broking has raised its target price for Tata Power to Rs 450 from Rs 422 earlier. Antique said Tata Power was eyeing 12 GW in pumped hydro in Western India, where the land bank is in excess of 36,000 acre. Pumped hydro storage projects (PSPs) are established or proven models, costing less than Li-ion batteries, it said. Tata Power is working on 1 GW Bhivpuri PSP (6 GWh), which will cost Rs 4,700 crore, which is at the lower end of the cost curve.

The stock has seen very less volatility in a year with a beta of 0.4.   

In terms of technicals, the relative strength index (RSI) of the stock stands at 76.2, signaling the stock is trading in the overbought zone. Tata Power shares are trading higher than the 5 day, 20 day, 30 day, 50 day, 100 day, 200 day moving averages.    

Tata Power reported a 8.79% year-on-year (YoY) growth in its consolidated net profit for the July-September 2023 quarter to Rs 1,017.41 crore against a net profit of Rs 935.18 crore in the year-ago period. Revenue for the period under review rose 9% to Rs 15,442 crore.  

The company attributed its growth in revenue and profits to its "healthy balance sheet, operational excellence, and synergies across all business clusters". 

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