EU and US could reach trade deal this weekend - Reuters
On Wednesday, JPMorgan initiated coverage on Tata Power Co Ltd (TPWR:IN), assigning a Neutral rating and setting a price target of INR378.00. The firm highlighted Tata Power’s diversified approach within India’s power sector, citing its involvement in both traditional and emerging areas of the industry. The company’s activities span from thermal power generation and coal mining to renewable power generation, solar manufacturing, and electricity distribution and transmission.
Tata Power has been recognized for its aggressive expansion into new sectors such as rooftop solar and EPC services. The company’s profitability has notably improved due to the application of Section 11 to imported coal plants, which has been extended until April 30, 2025. This extension has positively impacted the Mundra UMPP’s profitability, contributing to the company’s financial performance.
The improvement in profitability and cash flows has been instrumental in strengthening the company’s balance sheet. A significant reduction in net debt/EBITDA has been observed, indicating a more robust financial position. JPMorgan analysts pointed out that despite Tata Power’s stock experiencing a decline of 19% over the past six months and 3% over the past year, it has seen substantial growth of 97% and 57% over the past two and three years, respectively.
The stock is currently trading at 2.6 times its forecasted FY27E Price to Book Value (P/BV), with average Return on Equity (RoE) around 12%. According to JPMorgan, this valuation suggests limited room for further upside, especially considering the stock’s recent price correction. The analysis provided by JPMorgan offers a comprehensive view of Tata Power’s financial health and market position, as well as the potential trajectory of its stock price.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.