Tata Power Co. Share Price

Tata Power Co. Ltd. fundamental analysis

Over a century ago, Tata Power embarked on an ambitious journey, emerging from the vision of pioneers who sought to electrify India, thus igniting progress and innovation. The company's story began in 1915 with the establishment of the first hydroelectric power station at Khopoli.

This bold endeavor not only powered the mills and streets of Mumbai but also marked the start of Tata Power’s mission to illuminate the entire nation.

Investors closely watch Tata Power share price as it reflects the company's financial health and market sentiment. Understanding its fundamentals, like revenue growth and profitability, helps determine its investment potential. Analysts often set Tata Power share price targets based on such insights, guiding investors on potential returns.

This article explores the basic analysis of Tata Power by looking at its business segments, financial performance, and market position, giving a complete view to prospective investors.

Tata Power Co. Limited

Tata Power Company Limited was founded on 18 September 1919 and it has grown to become one of the largest power generation companies in India, providing uninterrupted power supply for India’s growing power needs.

As the years progressed, Tata Power didn't just expand across India; it ventured overseas, undertaking significant projects from the deserts of Saudi Arabia to the bustling cities of Southeast Asia. Each step was a leap towards global recognition, emphasizing the company's commitment to excellence and innovation​​.

Today, Tata Power stands as a beacon of sustainable energy, having made transformative strides in renewable resources. The acquisition of Welspun Renewables for $1.3 billion highlighted its ambitious plans to dominate solar energy, setting a record for the largest acquisition in the Indian renewable sector​.

Furthermore, the company's recent partnerships, such as with Indian Oil Corporation to establish over 500 electric vehicle charging points, underscore its pivotal role in shaping India's energy future​.

The company has an installed electricity generation capacity of 14,110 MW out of which Non-Conventional (Green Energy) Sources account for 5,250 MW while the remaining portion comes from thermal sources. This makes it India’s largest integrated power company.

Tata Power operates in various other countries including Singapore, Zambia, Indonesia, South Africa, Georgia Mauritius, and Bhutan among others. Besides that, there are various subsidiaries such as Tata Power Solar and Tata Power Delhi Distribution Limited.

Is the power sector a goldmine investment?

The power industry, particularly the renewable energy sector, presents promising investment opportunities in India. The country ranks 4th globally in renewable energy installed capacity, including large hydro. India has set an ambitious target of 500 GW of non-fossil fuel-based energy by 2030.

As of Apr 2024, the installed solar energy capacity is at 82.63 GW having increased by 30 times in the last 9 years. The government supports the energy transition through targeted policies, subsidies, and incentives. Up to 100% FDI is allowed under the automatic route for renewable energy generation and distribution projects in India.

In this sector, Tata Power Company Limited can be a suitable option for investment. In fact, Tata power share price as of June 21, 2024, was Rs. 438.706. Furthermore, Tata Power share price forecast is also promising.

The price target for Tata Power for the next year is estimated to be Rs. 525.238, with a maximum estimate of Rs. 831.568. These factors make Tata Power an attractive option for investors looking to invest in India’s power sector.

Who is Tata Power Co. Limited’s competitors in the power sector?

Tata Power Co. Limited operates in a competitive environment in the power sector. Some of its key competitors include:

• Reliance Power
• Adani Power
• NTPC Ltd
• Torrent Power
• India Power Corporation Ltd
• Power Grid Corporation of India

History of Tata Power Co. Limited

Here’s a concise overview of Tata Power Co. Limited’s history and achievements:

• Incorporation: Tata Power was established on September 18, 1919, starting as the Tata Hydroelectric Power Supply Company and later amalgamating with the Andhra Valley Power Supply Company in 1916.
• Product range: The company’s product range includes renewable generation (wind and solar energy), conventional generation (hydro and thermal power), transmission & distribution, and next-gen power solutions like rooftop solar, EV charging, home automation, and energy as a solution.
• Infrastructure: Tata Power has a significant infrastructure with an installed generation capacity of 14,110 MW in India, including thermal, hydro, solar, and wind, as well as transmission and distribution networks.
• Certifications: The company holds various certifications, including ISO 9001:2015, ISO 14001:2015 & ISO 45001:2018 for electric power generation by utilising heat from waste flue gas of coke ovens of Tata Steel Ltd.
• Awards and recognition: Tata Power has received numerous awards, such as the Sanjeevni Award for Smart Technology in Electricity Distribution, Platinum Award for its submersible distribution transformer substation, and recognition for its OT cybersecurity implementation.

Company profile of Tata Power Co. Limited

Pros:

• Strong Financial Performance: Tata Power reported its highest ever Profit After Tax (PAT) of ₹ 4,280 crore for FY24. The Q4FY24 PAT grew by 18% to ₹ 1,109 crore, marking the 18th consecutive quarter of PAT growth. This indicates a strong and consistent financial performance.
• Revenue Growth: Tata Power’s robust revenue growth, with a 10% increase to ₹ 61,542 crore in FY24 and a 27% rise to ₹ 16,256 crore in Q4FY24. This can contribute to its strong financial performance which can potentially influence the Tata Power share price target.
• Renewable Energy Focus: With a strong presence in the solar rooftop and solar pumps market, and plans for electric vehicle charging infrastructure, Tata Power is well-positioned to benefit from the shift towards renewable energy.

Cons:

• High Debt: Tata Power Co. Limited’s high debt-equity ratio indicates that it has financed a significant portion of its growth with debt, which could be risky if the Tata Motors share price forecast does not meet expectations, potentially affecting the overall performance of the Tata group.
• Capital Expenditure: Tata Power plans a 66% higher capital expenditure of Rs 20,000 crore to focus on energy transition and net-zero emissions. While this could lead to long-term growth, it might also strain the company’s financial resources in the short term.

The finances and Tata Power share price forecast

Here’s a summary of Tata Power Co. Limited’s financial information as of May 2024:

Metric	Value
Market cap	Rs. 1,39,556 Cr.
Book value	Rs. 101 (Per share)
Dividend Yield	0.46 %
ROCE	11.3 %
ROE	11.5 %
Face Value	Rs. 1.00

The Tata power share price today stands at Rs. 438.7, representing its current market valuation. The Tata power share price forecast suggests a potential increase, with analysts predicting a price of Rs. 513.16 by the end of 2024.

Shareholding pattern of Tata Power Co Limited

The shareholding pattern can significantly impact Tata Power share price chart. This is because the distribution of shares among different types of shareholders can influence the company’s decision-making, financial health, and overall market perception.

As of the latest data, the shareholding pattern of Tata Power Co. Limited is as follows:

• Promoters: Hold 46.9%
• Foreign Institutional Investors (FII): 28.4%
• Domestic Institutional Investors (DII): 15.8%
• Public: 27.9%

Peer multiple comparison

When comparing Tata power share price to its peers, you must also compare the following metrics.

Metric	Reliance Power	Adani Power	India Power Corporation Ltd	Power Grid Corporation of India
P/E Ratio	-4.80	12.93	105.04	18.32
P/B Ratio	0.85	6.24	1.67	3.27
Dividend Yield (Avg.)	0.00	0.00	0.29	2.36