Stock to buy: The domestic stock markets are seeing ups and downs on Wednesday (5 February). A day earlier, the market closed about 2% after the rally. However, the benchmark index Nifty 50 and the Sensex are currently about 9.7% and 8.6% below 27 September. Slow economic pace with frequent selling of foreign investors and the quarter consequences of companies being soft have been affected.
Amidst the unstable mood-mood in the market, brokerage firm Motilal Oswal has advised to buy the stock of Tata Group’s veteran Tata Power. Brokerage has expected 35% upside in long -term in stock after Q3 results.
Tata Power: Target Price 490 | Rating Buy | Upside 35%
Motilal Oswal has retained his Buy rating on Tata Power. Also, a target price of Rs 490 has been given on the stock. In this way, the stock can give 35% upside in long term with a closed price of Tuesday (February 4). On Tuesday, the stocks of Tata Power closed at a price of Rs 362.
Talking about the performance of stock, it has been 27% correct from its 52 week high. The stock has broken 7% in the last one month. Whereas in the last six months, the stock has fallen by 15%. The stock is running below 6% compared to the last one year. The 52 week high of the stock is Rs 494 while 52 weeks are Rs 338. The total market cap of stock on BSE is Rs 1,17,492 crore.
Brokerage opinion on Tata Power
The valuation of Tata Power is divided into different business units. This provides a target price of Rs 490 per share on the stock. Regulatid business has been valued at regulatid equity through 2.5x multiple. The valuation of the coal segment was done with 1.5X multiple of the FY24 Book Value based on equity. At the same time, the price of the renewable energy segment is at 14X multiple of the estimated FY27 Ebitda. The total target price is 490/shares on the basis of these contributions.
How to remain Q3 results of Tata Power
Tata Group subsidiary firm Tata Power increased by 10 percent on a annual basis in the December quarter of 2024-25 to Rs 1188 crore. The company earned a profit of Rs 1,076 crore in the same quarter of the previous financial year. During this period, the total income of Tata Power also increased to Rs 15,793 crore. It was Rs 15,294 crore a year ago in the same period.
Tata Power Chief Executive Officer (CEO) and Managing Director Praveer Sinha said, “We have registered a continuous increase in profit in the last 21 quarters and all our businesses are contributing to this growth.”
What does Tata Power do?
Tata Power is one of the largest integrated power companies in India, which works in the field of power generation, transmission, and distribution. It is a major Tata group company, which was established in 1919. The company is also present in many other countries including India.
Tata Power is a subsidiary of Tata Group. The largest stake in this is Tata Sons, which is the holding company of the Tata group. In addition, many domestic and foreign investors also have a stake in the company.
Tata Power mainly earns its income from power generation and distribution. The company is now focusing on traditional energy as well as green energy.