Home » Tata Power Share Price Is Down 30%: Is This NSE Blue-Chip Stock a Buy?

Tata Power Share Price Is Down 30%: Is This NSE Blue-Chip Stock a Buy?

Tata Power share price

Tata Power is one of India’s leading integrated power companies, with a significant presence in the renewable energy sector. The company has a diversified portfolio of power generation assets, including thermal, hydro, and renewable power plants. Tata Power is also involved in transmission and distribution, trading, and coal mining activities. It operates in India and international markets, with a strong presence in the Middle East, Africa, and South Asia.

Valued at a market cap of 63,000 crores, Tata Power share price is down 31% from all-time highs. Let’s take a look at the valuation and growth rates of this blue-chip NSE stock to see if it is worth buying right now.

Is Tata Power share a buy in 2023?

Tata Power has reported steady revenue growth over the past five years, with a CAGR of 9.8%. The company’s revenue for FY2022 was INR 42,816 crores, a 30% increase from the previous year. In the last 12 months, its sales have touched INR 54,580 crores valuing Tata Power’s share at less than 1.2 times trailing sales.

Tata Power Revenue and Growth Rate Comparison. Source: Groww

Tata Power’s net profit for FY2022 was INR 1,741 crores, a significant increase from the previous year’s net profit of INR 1,127 crores. The company’s return on equity (ROE) has also improved, reaching 9.8% in FY2022, compared to 7.5% in the previous year.

Tata Power’s installed power generation capacity was 14,076 MW, with a significant portion (around 37%) of the capacity coming from renewable sources. The company’s renewable portfolio includes wind, solar, and hydropower plants, with a total capacity of 5,200 MW. The company is targeting to achieve 30-40% of its total generation capacity from renewable sources by 2025.

Tata Power’s transmission and distribution business operates in Mumbai, Delhi, and Ajmer, serving over 10 million customers. It is also involved in power trading activities, with a focus on the Indian Energy Exchange (IEX) platform.

The company’s growth prospects are primarily driven by the increasing demand for electricity in India and the global shift towards renewable energy sources.

Tata Power is also investing in new technologies and innovation to improve its operational efficiency and reduce costs. It has launched several initiatives, such as the use of blockchain technology in power trading and the deployment of digital solutions for power distribution.

What is Tata Power share price today?

Tata Power share price on the NSE is INR 195.70. Comparatively, Tata Power’s share price on the BSE is INR 195.80. The 52-week high for Tata Power share price is INR 288.45, while its 52-week low is INR 182.35.

Tata Power peer valuation comparison: Source: Groww

Priced at 36 times trailing 12-month earnings, Tata Power’s share price seems overvalued. Comparatively, its peers, such as Power Grid and Torrent Power, are trading at 10.3x and 21.3x, trailing earnings, respectively.

What is the shareholding pattern for Tata Power?

Around 47% of Tata Power’s total outstanding shares are held by promoters, followed by retail investors, domestic institutions, foreign institutions, and mutual funds at 29%, 10%, 10%, and 4.5%, respectively.

Tata Power share price forecast for 2023

Let’s take a look at how Dalal Street views Tata Power share price right now. In February, brokerage firm Geojit BNP Paribas raised concerns over foreign exchange fluctuations and volatile coal prices to negatively impact Tata Power shares. It has a hold rating on the stock with a target price of INR 223.

Alternatively, ICICI Securities revised estimates for earnings in fiscal 2023 and fiscal 2024 due to rising coal prices and the sale of power from Tata Power’s plant at Mundra. ICICI has a price target of INR 262 with a buy rating on the stock.

BOB Capital Markets remains positive on Tata Power’s share price, despite missing earnings estimates in fiscal 2023. The firm has a buy rating on Tata Power with a target price of INR 271 on the back of growth in renewables.

No Comments

Leave a Comment