Tata Power shares recover 31% from March low; good time to buy ?

Shares of Tata Power have surged 31% from their March 2023 lows. The Tata Group stock, which hit an intraday low of Rs 182.45 on March 28, 2023 closed at Rs 239.35 on August 21, 2023, rising 31.18% or Rs 56.9 in nearly five months. Interestingly, returns generated for Tata Power investors in period of up to a year are less compared to the returns generated in the last five months. 

Tata Power shares surged 10%, 16.30% , 15.13% and 2.86% in the last one month, three months, six months and a year, respectively. The stock gained 13.03% in 2023. 

In the previous session (Monday), the Tata Power stock ended 4.07% higher at Rs 239.35 on BSE.  The Tata Group stock opened flat at Rs 230.05 on BSE.  It hit an intraday high of Rs 240.30 , rising 4.47% on BSE. Total 6.28 lakh shares of the firm changed hands amounting to a turnover of Rs 14.81 crore on BSE. Market cap of the firm stood at Rs 76,480 crore.    

In terms of technicals, the relative strength index (RSI) of the stock stands at 50.3, signaling the stock is neither oversold nor overbought. Tata Power has a one-year beta of 1, indicating average volatility during the period. Tata Power shares are trading higher than 5 day, 10 day, 20 day, 50 day, 100 day, 200 day moving averages.    

Tata Power logged a 22% rise in consolidated net profit to Rs 972.5 crore in the June quarter against  Rs 784.6 crore in the corresponding quarter of the previous fiscal. 

Revenue climbed 5% to Rs 15,213.3 crore against Rs 14,495.5 crore in Q1 of the previous fiscal. EBITDA climbed 75% to Rs 2,943.6 crore against  Rs 1,683.4 crore in June quarter of the previous fiscal. 

 Here’s a look at what experts said on the outlook of the stock.  

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said, "The stock has indicated a higher bottom formation and with a bullish candle formation pattern the bias has improved and can anticipate for further rise in the coming days. The near-term support would be around Rs 230 zone and upside we can anticipate for Rs 252-254 zone as our next target." 

Aditya Gaggar, Director of Progressive Shares sees the stock hitting Rs 281 mark in the long term. 

“In the fag end of July 2023, Tata Power has given a breakout from an inverted head & shoulder formation. After that, the stock moved in tandem with the market correction and completed its pullback move, and recently, gave a consolidation breakout which indicates the resumption of a primary uptrend. Trend following indicator ADX stands at 24 which points toward the beginning of the trend. As per the Inverted Head & Shoulder formation, the target arrives at Rs 281," said Gaggar. 

Osho Krishan, Sr. Analyst - Technical & Derivative Research, Angel One said, "Tata Power has seen a stellar run in the current financial year and soared nearly 30 percent from the lows of Rs 180 zone. On the technical front, the stock is in a cycle of higher highs – higher lows and is heading near the crucial hurdle of Rs 250-odd zone. On the broader time frame, the mentioned level has acted as a sturdy hurdle, and surpassing the same has been a daunting task. On the levels front, Rs 230 is likely to cushion any short-term blip, while the sacrosanct support lies around the Rs 218-215 zone. Hence, going through the historical data, an authoritative breach beyond Rs 250 would only trigger fresh longs in the counter towards the next potential resistance of Rs 263-267 zone. Meanwhile, the dips are likely to augur well for the bulls, and the stock is most likely to hover within the mentioned zone from a short-term perspective." 

SMC Global has buy call on the Tata Power stock with a target price of Rs 255-259. One should maintain a stop loss of Rs 215.  

"Tata Power witnessed steady recovery from lower levels and can be seen trading in a rising channel with formation of higher bottom pattern. Few weeks ago, stock has managed to surpass its long term downward sloping channel and since then trading in a range bound manner as prices can be seen fluctuating in the range of Rs 220-240 zone. Additionally, the stock is well placed above its 200-days exponential moving average as well on daily and weekly intervals. We expect upside momentum to carry in upcoming weeks once again, as positive divergences on secondary oscillators suggest the next upswing into the prices. Therefore, one can buy the stock in the range of Rs 228-230 levels for the upside target of Rs 255-259 levels with stop loss below Rs 215 levels," said SMC Global. 

Abhijeet from Tips2Trades said, "Tata Power is bullish on the daily charts with next resistance at Rs 245.3. A daily close above this resistance could lead to target of Rs 255 in the near term. Support will be at Rs 228.5." 

 

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