Tata Power surges 9% on heavy volumes; stock zooms 40% in two weeks

Shares of Tata Power Company hit a new high of Rs 193.7 as they surged 9 per cent on the BSE in intra-day trade on Monday, on the back of heavy volumes, amid expectations of strong earnings growth. At 01:56 pm, the stock was trading 8 per cent higher at Rs 191.15, as compared to a 0.52 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped 1.5 times, with a combined 117 million equity shares having changed hands on the NSE and BSE so far.

In the past 10 trading days or two weeks, the stock of the Tata Group electric utilities company has zoomed 40 per cent, as compared to a 0.44 per cent gain in the Sensex.

Last week, TVS Motor Company, India’s third-largest two-wheeler maker, entered into a strategic partnership with Tata Power for the implementation of electric vehicle charging infrastructure (EVCI) across the country. The two companies will also explore opportunities to use solar energy to power select TVS Motor locations in their journey towards sustainability.

That said, Tata Power’s board is scheduled to meet on October 28, 2021 to consider financial results for the quarter ended September 2021 (Q2FY22).

In the April-June quarter (Q1FY22), Tata Power had reported a 74 per cent year-on-year jump in its consolidated profit after tax (PAT) before exceptional items at Rs 268 crore, driven by a consistent performance by all businesses, reduction in finance cost and higher execution of EPC projects.

The management said the company aims to scale up its renewable portfolio from the current 4GW to 15GW by 2025 and to 25GW by 2030 thereby achieving 80 per cent clean generation capacity, up from the current 31 per cent. The company will continue to expand and promote the mass adoption of rooftop solar & solar pumps, microgrids, home automation and focus on developing the EV charging infrastructure in the country, it added.

Brokerage firm Anand Rathi has a ‘buy’ rating on Tata Power with a target price of Rs 223 per share. “Tata Power is India's largest, integrated power company and operates across the power value chain. The net debt of the company saw a steady decline. Working capital management has helped to keep net debt in check. Also, continued deleveraging of the balance sheet through the sale of non-core assets are key near-term triggers for the company,” it said in a special report.