⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
TATAPOWER - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | TATAPOWER | Market Cap | 1,27,734 Cr. | Current Price | 400 ₹ | High / Low | 417 ₹ |
| Stock P/E | 106 | Book Value | 59.0 ₹ | Dividend Yield | 0.56 % | ROCE | 14.8 % |
| ROE | 18.1 % | Face Value | 1.00 ₹ | DMA 50 | 379 ₹ | DMA 200 | 383 ₹ |
| Chg in FII Hold | -0.19 % | Chg in DII Hold | 0.86 % | PAT Qtr | -160 Cr. | PAT Prev Qtr | 431 Cr. |
| RSI | 62.9 | MACD | 6.71 | Volume | 76,41,291 | Avg Vol 1Wk | 1,33,55,468 |
| Low price | 332 ₹ | High price | 417 ₹ | PEG Ratio | 6.95 | Debt to equity | 1.24 |
| 52w Index | 79.8 % | Qtr Profit Var | -116 % | EPS | 3.76 ₹ | Industry PE | 24.6 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT dropped from ₹431 Cr. to ₹-160 Cr., showing earnings volatility and weakness.
- Margins: ROE at 18.1% and ROCE at 14.8% reflect moderate profitability despite recent losses.
- Debt: Debt-to-equity ratio of 1.24 indicates high leverage, raising financial risk.
- Cash Flow: Supported by diversified power operations, but debt burden and profit swings affect sustainability.
💹 Valuation Indicators
- P/E Ratio: 106 vs Industry PE of 24.6 → extremely overvalued compared to peers.
- P/B Ratio: Current Price ₹400 vs Book Value ₹59 → ~6.78x, reflecting premium valuation.
- PEG Ratio: 6.95 → signals overvaluation relative to growth prospects.
- Intrinsic Value: Estimated fair value near ₹340–360, suggesting current price is overvalued.
⚡ Business Model & Competitive Advantage
- Operates in power generation, transmission, distribution, and renewable energy.
- Competitive advantage lies in Tata Group backing, diversified portfolio, and strong presence in renewables.
- Challenges include high debt and earnings volatility.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive between ₹340–360, closer to intrinsic value.
- Long-Term Holding: Suitable for investors seeking exposure to renewables; hold for 5+ years with caution due to debt and valuation risks.
✅ Positive
- Strong ROE (18.1%) and ROCE (14.8%) highlight moderate efficiency.
- DII holdings increased (+0.86%), reflecting domestic institutional confidence.
- Strong positioning in renewable energy supports long-term growth.
⚠️ Limitation
- Extremely high P/E ratio (106) compared to industry average.
- High debt-to-equity ratio (1.24) adds financial risk.
- PEG ratio (6.95) signals overvaluation relative to growth.
📉 Company Negative News
- Quarterly PAT decline from ₹431 Cr. to ₹-160 Cr. highlights earnings volatility.
- FII holdings decreased (-0.19%), showing reduced foreign investor confidence.
📈 Company Positive News
- DII holdings increased, reflecting domestic confidence.
- Strong renewable energy portfolio supports long-term prospects.
- Backed by Tata Group, ensuring credibility and stability.
🏭 Industry
- Power industry is transitioning toward renewables, supported by government initiatives.
- Industry PE at 24.6 shows sector is moderately valued compared to Tata Power’s premium.
- Rising demand for clean energy supports long-term growth.
🔎 Conclusion
Tata Power demonstrates moderate fundamentals with strong ROE/ROCE and a diversified renewable portfolio, but high debt and earnings volatility weaken its attractiveness. Current valuations are stretched with a high P/E and PEG ratio. Entry around ₹340–360 offers better risk-reward. Long-term investors can hold for 5+ years to benefit from renewable energy growth and Tata Group stability, though caution is advised due to debt and valuation risks.