Tata Power shares turn ex-dividend today; what should investors do?

Shares of Tata Power Ltd are in focus after the stock will turn ex-dividend today. Tata Power has declared a dividend of Rs 2 per share.  The Board of Directors of Tata Power recommended the dividend for the financial year 2022-23 during earnings announcement for the March 2023 quarter and fiscal.  

Tata Power stock ended 1.03% lower at Rs 216.70 in the previous trading session on BSE.  

Stock of Tata Power has lost 6.72% in a year but risen 4.33% in 2023. Total 4.41 lakh shares of the firm changed hands amounting to a turnover of Rs 9.56 crore on BSE. Market cap of the firm fell to Rs 69,243 crore on Tuesday.              

In terms of technicals, the relative strength index (RSI) of the stock stands at 64.7, signaling the stock is neither oversold nor overbought. Tata Power has a one-year beta of 1, indicating high volatility during the period. Tata Power shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.  

The dividend is subject to the shareholders' approval at the company’s 104th Annual General Meeting (AGM), scheduled to be held on June 19, 2023. It will be paid on and from June 21, 2023. 

 In FY23, Tata Power recommended higher dividend than in FY22. In FY22, the Tata Group firm declared dividend at Rs 1.75 share, amounting to approximately Rs 559 crore. 

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Abhijeet from Tips2trades said , "Tata Power is bullish but also overbought with  resistance at Rs 220. A daily close below support of Rs 211 could lead to targets of Rs 204-193 in the coming weeks." 

V.L.A. Ambala (SEBI Registered Research Analyst), Stock Market Today (SMT) said, "Tata Power has announced a dividend of Rs 2 per shar which is almost 0.90% of its current market price. The Board of Directors (BoD) of Tata Power suggested the dividend for the financial year 2022-23 during earnings announcement for the March 2023 quarter and fiscal. On the technical aspect, it is looking good at all technical indicators and according to overall price movement. Price has formed a bottom which is nearly Rs 170. Currently its trading at Rs 216 and from here Rs 250/265/280/300 /320/350/380 targets are possible. There is a good opportunity for swing trading or short-term trading. This stock is a quality group stock and so considerable better choice for long term too with strict stop loss at Rs 160." 

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has recovered strongly from the bottom made near Rs 182 levels moving past the significant 200 period daily MA to indicate strength and recently with slight consolidation witnessed resisting near the 220 zone and has maintained above the crucial 200 period MA of 214 level.  One can buy at current levels keeping the stop loss of Rs 214 which is the near-term support zone and with a decisive move above Rs 220 levels indicating a breakout, one can expect for further targets of Rs 235-240 levels for the short-term time frame."

Brokerage Anand Rathi expects Tata Power stock to reach Rs 256 in a year.  

 In a report dated May 22, it said , “Tata Power continues to steadily move towards its long-term aspiration built on businesses of the future while maintaining a healthy balance sheet. This is clearly visible from the improvement seen in the operational and financial metrics in each passing quarter. With rapidly growing generation capacity at its disposal, and a strengthened focus on EV and renewables businesses, we expect the company's performance to improve from current levels. We maintain our rating on the stock to BUY with a target price of Rs 256.” 

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Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "Tata Power has rebounded from the lows of Rs 180 odd zone and has surged nearly 15 percent in the current financial year. Currently, the stock has entered its long-time consolidation zone, but the placement on the daily chart construes positive developments as it surpassed the 200 SMA. For now, strong support is seen at the Rs 205-210 zone, while on the higher end, the immediate resistance is placed around Rs 230 odd zone. The stock is expected to hover within the mentioned range in the comparable period."

Tata Power reported a 48 per cent rise in its fourth quarter profit for the financial year 2022-23 (FY23). Net profit rose to Rs 939 crore in the last quarter against Rs 632 crore in the same period last year. The company said this would be the 14th consecutive quarter of profit after tax (PAT) growth, adding that the Q4 numbers were supported by strong performance across all businesses. 

Revenue climbed 6 per cent to Rs 12,755 crore in Q4 FY23 against Rs 12,085 crore in Q4 FY22 due to higher sales across distribution companies and capacity addition in renewables. 

In a related development, the company’s arm Tata Power Renewable Energy Limited (TPREL) has commissioned a 110 mega watt (MW) solar energy project at Bikaner, in Rajasthan. TPREL is one of the major renewable energy players in the country. “TPREL has commissioned a 110MW solar power project in Bikaner, Rajasthan. The project will supply 110 MW green power to the Kerala State Electricity Board (KSEB),” Tata Power said.  

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