Tata Power shares rise after Moody’s upgrades rating, maintains stable outlook

Shares of Tata Power Company Ltd rose over 2% today after international brokerage Moody's Investors Service upgraded the corporate family rating of the Tata Group firm to Ba1 from Ba2, and maintained the stable outlook. 

"The rating upgrade to Ba1 is driven by Tata Power's solid financial metrics, which are projected to remain above the upgrade trigger set for the earlier Ba2 rating," said Yong Kang, a Moody's Analyst. 

The company's standalone credit quality is supported by predictable cash flow from its distribution businesses that benefit from a stable regulatory framework, and from its fixed-tariff long-term power purchase agreements (PPAs) for its renewable generation capacity. 

Under its base case projection, Tata Power's operating cash flow pre-working capital to debt (CFO pre-WC/debt) will remain solid at 9%-11% over the next two to three years., Moody’s said. Although the projected credit metrics are lower than the actuals recorded in fiscal 2023, Tata Power is expected to be able to sustain these credit metrics, thereby supporting the upgrade, the brokerage added.  

Tata Power stock zoomed 2.51% intraday to Rs 264.65 in the current session on BSE.  The stock hit an intraday low of Rs 258.65 on Friday. Tata Power has a one-year beta of 1.1, indicating high volatility during the period. 

The stock touched a fresh 52-week high of Rs 276.50 on September 8 this year. The Tata Group stock opened on a flat note at Rs 258.65 on BSE on Friday. Total 9.52 lakh shares of the firm changed hands amounting to a turnover of Rs 25.05 crore on BSE. Market cap of the firm rose to Rs 83,877 crore.         

In terms of technicals, the relative strength index (RSI) of the stock stands at 54.1, signaling the stock is neither overbought nor oversold on technical charts. Tata Power shares are trading higher than the 5 day, 20 day, 50 day, 100 day, 200 day moving averages.    

In terms of financials, Tata Power reported 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.    

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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