Interesting! It seems that JM Financial has identified four key elements of Tata Power’s recalibration strategy. One of these aspects is their plan to take advantage of the high-margin group captive renewables opportunity. Additionally, it appears that they plan to exit low-value businesses as part of their strategy. It will be interesting to see how these changes impact Tata Power’s overall performance in the coming months.
Tata Power Ltd.’s shares jumped 9% to a record high after JM Financial upgraded the stock from “hold” to “buy.”
JM Financial has increased its price target on Tata Power Ltd. by 40% to ₹350 from an earlier target of ₹220. This suggests a potential upside of 24% over the next year. The brokerage also highlighted four key aspects of Tata Power’s recalibration strategy, which includes tapping into high-margin group captive renewables, exiting low-value businesses, expanding the transmission business beyond distribution, and venturing into brownfield hydrostorage.
According to JM Financial, there is a visible resolution for the Mundra issue for Tata Power, and the brokerage is forecasting a CAGR of 15%, 23%, and 32% for revenue, EBITDA, and net profit, respectively, over the financial years 2023-2026. The brokerage expects that Tata Power’s earnings will be supported by increasing the asset base and an improved margin profile.
Tata Power’s shares are currently trading at ₹320, up by 9%. The stock has gained 55% so far this year. This surge has also taken the company’s overall market capitalisation past the ₹1 lakh crore mark.
