TATAPOWER - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Fundamental Analysis

Tata Power is a well-established utility giant with a strong push into renewables, but its valuation and debt levels require careful consideration

ROE (11.0%) & ROCE (10.8%): Decent but not exceptional; reflects stable profitability.

Debt-to-Equity (1.75): High leverage — a key risk factor, though common in capital-intensive sectors.

P/E (34.2) vs Industry P/E (17.9): Overvalued relative to peers.

PEG Ratio (1.66): Fairly priced for its growth trajectory.

Dividend Yield (0.56%): Low, but consistent.

EPS (₹12.4): Solid earnings base.

⚡ Strategic Growth Drivers

Renewables Surpass Coal: Tata Power’s renewable segment now contributes more profit than coal

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Battery Storage & Rooftop Solar: Aggressive expansion in clean energy, with 752 MW solar projects added in Q1 FY26

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Bhutan Hydro Investment: ₹830 Cr investment in KHPL marks international clean energy push

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EV Charging & Smart Grids: Positioned to benefit from India’s green energy and EV infrastructure boom.

📈 Technical & Price Trend Insights

Current Price: ₹400

DMA 50 / DMA 200: ₹399 / ₹393 — price is near averages, indicating consolidation.

RSI (48.4): Neutral zone.

MACD (-0.02): Flat momentum.

Volume: Slightly above average — stable interest.

💰 Ideal Entry Price Zone

Based on valuation and technical support

Entry Zone: ₹370–₹395 This range offers a better margin of safety and aligns with key support levels. Below ₹370, it becomes a strong accumulation zone.

🧭 If You Already Hold the Stock

Exit Strategy / Holding Period

Hold for 5–10 years to benefit from

Renewable energy growth

EV infrastructure expansion

Government clean energy incentives

Partial Exit near ₹475–₹495 if valuations stretch or debt remains elevated.

Exit Trigger: If ROE drops below 8% or debt-to-equity rises above 2.0.

Analyst Sentiment

JM Financial: Buy, target ₹490

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CLSA: Underperform, target ₹351

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Kotak Equities: Sell, target ₹265

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Goldman Sachs: Bearish, target ₹240

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📈 Long-Term Forecast

Year Target Range

2025 ₹453–₹467

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2027 ₹621–₹648

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2030 ₹874–₹933

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2035 ₹1,378–₹1,498

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📌 Summary

Metric Value Verdict

ROE / ROCE 11.0% / 10.8% Stable

PEG Ratio 1.66 Fairly priced

Debt-to-Equity 1.75 High risk

Dividend Yield 0.56% Modest

P/E vs Industry 34.2 vs 17.9 Overvalued

Entry Price Zone ₹370–₹395 Safer entry

Exit Strategy ₹475–₹495 Partial exit zone

Would you like a comparison with Adani Green or JSW Energy to explore alternative renewable plays?

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Mint | MSN

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www.fortuneindia.com

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www.cnbctv18.com

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www.businesstoday.in

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