Tata Power shares: Two factors why stock rose 5% from day's low today

Shares of Tata Power zoomed 5% from their low on February 20 after international brokerage HSBC upgraded its rating on the stock on improving execution. The global brokerage assigned a 'hold' rating to the stock, from its earlier 'reduce' call and raised its price to Rs 345 per share from Rs 300 each.

The stock has corrected 31% from its 52 week high of Rs 494.85 on September 27, 2024. 

In the current session, Tata Power shares rose 5% from the low of Rs 344.75 on BSE. Market cap of the firm rose to Rs 1.13 lakh crore. 

The stock is neither oversold nor overbought on charts, signals its relative strength index (RSI), which stands at 42.4. In terms of price action, the stock is trading higher than the 5 day, 10 day, 20 day but lower than the 30 day, 50 day, 100 day, 150 day and 200 day moving averages.

Tata Power stock is also down 6.54% in a year. However, Tata Power shares rose 74% in two years. In five years, the stock delivered multibagger returns of 586.34%. 

"We update our estimates and valuation to factor in project progress, a strong start to solar module/cell manufacturing, and the start of new programmes like pumped storage and hybrid. We increase our FY25-26e EPS estimates by 9-13% and introduce FY27e. We roll forward our valuation basis and continue to use a sum-of-parts valuation, resulting in a new target price of Rs 345 (from Rs 300), which implies 2% upside. We upgrade to Hold (from Reduce)," said HSBC. 

Additionally, sentiment was positive around the stock following the announcement of a partnership with Amazon Web Services to drive energy transition in India.

"This digital transformation is translating into tangible benefits for both businesses and consumers, making Tata Power a preferred partner of choice for clean and efficient energy solutions. AI-driven insights enable faster outage detection, improved grid stability, and personalized energy recommendations, resulting in cost savings, enhanced reliability, and an accelerated transition to renewables," said Tata Power.