Tata Power has achieved a record high for its shares, reaching an all-time peak of Rs 322.30 ($3.87) on Thursday, marking a notable uptrend for the company. This surge occurred amid a mild correction in the broader market, contributing to Tata Power’s upward trajectory, with a 45.47% gain in the last six months and an impressive 50% increase in the current year. The company’s market capitalization has reached a record Rs 1.01 lakh crore (approximately $11 billion), reflecting investor confidence in Tata Power’s strategic moves.
Mandar Bhojane, Equity Research Analyst at Choice Broking, noted that Tata Power’s all-time high level of Rs 322 indicates robust bullish momentum in the stock. Aditya Gaggar, Director of Progressive Shares, supported this sentiment, suggesting that the year-long consolidation may come to an end.
The 11% surge in Tata Power’s shares follows JM Financial’s upgrade of Tata Power’s stock to a ‘buy’ rating from ‘hold.’ JM Financial has also increased the price target on the stock by 40% to Rs 350 ($4.20), anticipating a potential rally of 24% over the next 12 months. The key elements of Tata Power’s strategic plan highlighted by JM Financial include capitalizing on group captive renewables, divesting from low-value businesses, entering the brownfield hydro storage sector, and extending the transmission business beyond distribution.
JM Financial projects a 15% Compound Annual Growth Rate (CAGR) for revenue, a 23% growth in EBITDA, and a 32% increase in net profit from FY 2023 to 2026. Tata Power’s consistent acquisition of new orders, including the Bikaner-Neemrana transmission project, positions it for further growth. According to Jigar S Patel of Anand Rathi Shares & Stock Brokers, technical analysis supports the bullish momentum, with Tata Power’s stock showing higher highs and higher lows since March 2023, indicating a strong bull trend.
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