Tata Power shares rose 75% in a year: Price targets, technicals, Q2 reviews and more 

Shares of Tata Power Company slipped over 4% in the afternoon session on Monday amid a big crash in the broader market. Tata Power shares slipped 4.26% to Rs 426.20 today against the previous close of Rs 445.20 on BSE. The stock has gained 75% in a year and risen 30% in 2024. Amid the rally, the stock has also been highly volatile during the same period. Its one year beta stands at 1.5. 

Market cap of Tata Power fell to Rs 1.36 lakh crore on BSE. A total of 5.13 lakh shares of the firm changed hands amounting to a turnover of Rs 22.16 crore. Shares of Tata Power stock fell to a 52-week low of Rs 244 on November 3, 2023 and rose to a 52-week high of Rs 494.85 on September 27, 2024 

In terms of technicals, the relative strength index (RSI) of Tata Power stock stands at 50.5, signaling the stock is trading neither in the overbought nor in the oversold zone. Tata Power shares are trading lower than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The Tata Group firm announced its Q2 earnings on October 30 last week. 

The firm reported its highest ever quarterly profit of Rs 1,533 crore, up 51% year-on-year from Rs 1,017 crore in Q2 of the previous fiscal. 

Revenue from operations declined 1% year-on-year to Rs 15,247 crore.

Consolidated EBITDA climbed 23% to Rs 3,808 crore in Q2 on the back of ramped up solar manufacturing, favorable regulatory development in distribution, and operational efficiency across businesses.

Global brokerage Morgan Stanley is overweight on the stock post Q2 earnings. It has assigned a price target of Rs 577 to the Tata Group firm. 

Operationally, Tata Power’s generation, Transmission & Distribution (T&D), and green initiatives were in line with expectations, with the solar EPC business exceeding predictions. The execution of third-party solar EPC projects is seen seen rising and management plans to commission 5GW of renewable energy generation by FY26, said Morgan Stanley. 

Another brokerage Jefferies has an underperform stance on the firm with a price target of Rs 340. 

The global brokergae said that Q2 EBITDA exceeded expectations by 8%, primarily due to better performance in Solar EPC (Engineering, Procurement, and Construction), additional income, and contributions from coal. The management remains positive about its renewable energy investments, especially regarding a new solar cell manufacturing facility, it noted. 

Domestic brokerage Motilal Oswal has a price target of Rs 519 on the stock post Q2 earnings. 

"Following the weak 2QFY25 result at the reported PAT level, we cut our FY25 estimate by 13%, mainly as we build in the Rs 4.4 billion merger-related charges and given the weaker profitability at some of the Orissa subsidiaries. We also moderate our FY26 adjusted PAT by 5% as RE generation ramp-up has been somewhat behind expectations," said Motilal Oswal. 

Nuvama said Tata Power's Q2 results were in-line, with adjusted PAT growth at 21 per cent YoY, driven by T&D PAT (up 42 per cent) and Renewables PAT (up 61 per cent), slightly offset by thermal generation, coal, and hydro degrowth of 6 per cent YoY. 

Nuvama has retained its 'Reduce' rating and assigned a target price of Rs 346 for Tata Power Company. 
 
Choice Broking in its Diwali Picks 2024 report listed Tata Power as its top pick. 

"Tata Power is approaching a key demand zone, which could present a buying opportunity if signs of reversal emerge. A "buy on dips" strategy is recommended, with entry points up to 400 levels, targeting an upside range of Rs 500–520. This approach offers potential for gains, provided the stock reverses from its current consolidation phase," said the brokerage. 

Another brokerage Motilal Oswal is bullish on the prospects of the stock. It has initiated coverage on the company, naming it a top pick in the Indian power sector. The brokerage set a target price of Rs 530, with a 'buy' rating. 

Tata Power's diversified operations and scalability are key growth drivers for the Tata Group firm. "The company is undergoing a multi-year business transformation, with plans to allocate 45% of its capital expenditure from fiscal 2023 to fiscal 2027 to renewable energy projects. This strategic shift is expected to increase the share of core earnings from 40% to 90% over the same period," according to the note by Motilal Oswal.

Brokerage Nomura India has a target price of Rs 560 for Tata Power. Nomura expects outlook for Tata Power to be robust as the company aims to deliver a significant EBITDA CAGR over FY24-27.

The brokerage said Tata Power is likely to perform robustly on its EPC business, aided by a growing order book. Currently, the order book stands at Rs 15,700 crore. The power sector firm is also seen scaling up its recently commissioned 4.3GW cell-to-module facility. Tata Power could see a sharp jump in profitability from the Odisha DISCOM business, said Nomura India.