Tata Power is one of India’s largest integrated power companies, with operations spanning the generation, transmission, and distribution of electricity. The company is a subsidiary of the Tata Group.
In this article, I will explore the factors that could affect Tata Power’s stock price in the coming years and the future price that you can target by 2025.
What is the Price Target of Tata Power Shares By 2025
Tata Power’s stock is trading at around Rs. 208 per share. According to current market analysis, the price target for Tata Power’s stock by 2025 is expected to be around Rs. 325-350 per share.
There is no surefire way to predict stock prices with complete accuracy. Price targets are based on a combination of fundamental, and technical analyses of a company’s performance. You should analyze these factors before making a decision.
Fundamental Analysis of Tata Power Stocks
Tata Power has been making steady progress in recent years. The company has been investing heavily in renewable energy with 6.6 billion USD in the year 2021-22 and has set a target of achieving 30-40% of its installed capacity from clean energy sources by 2025. In addition to this, Tata Power has been expanding its distribution network in various parts of India.
Source: Economic Times
The company has also been making efforts to improve its financial performance. For the financial year ended March 2022, Tata Power reported a consolidated net profit of Rs. 2,156 crores, up from Rs. 717 crores in the previous year.
There are a few challenges for Tata power that you must analyze to set future price targets. The company’s debt levels have been increasing in recent years, and it will need to manage this effectively to avoid any negative impact on its financials. Additionally, the power sector in India is highly regulated, which could limit the company’s ability to generate profits.
In the past five years, Tata Power’s revenue has grown at a CAGR of 9% with 9% annual profit growth.
You can also go through our article on top 10 FMCG companies in India if you are interested in investing in FMCG stocks.
Technical Analysis of the Tata Power Stocks
Tata Power’s stock price has been in a bullish trend since September 2020, with the stock price increasing from INR 30 to Rs 222 in just 18 months. Since June 2022, Tata Power’s stock is trading in a range-bound zone of Rs 200 to Rs 240. This means that the stock is likely to remain within a certain price range in the near term.
I believe that the stock could break out of this range in the coming months. If this happens, the stock could potentially reach the range of Rs 300.
The technical analysis of Tata Power’s stock price is positive, and the experts predict that the stock price will continue to be in an uptrend. You can learn more about technical analysis tools reading our list of the best technical analysis software in India.
Factors that Can Affect Tata Power’s Share Price By 2025
There are several factors that could affect Tata Power’s stock price in the coming years. Some of the key factors include
- Industry and market trends – The power sector in India is expected to grow at a rapid pace in the coming years. This could create new opportunities for Tata Power to expand its operations and generate higher profits.
- Government policies and regulations – Tata Power operates in a highly regulated industry and any changes in government policies or regulations could have a significant impact on the company’s operations and financial performance, which in turn could affect its stock price.
- Competition from other power companies – The power sector in India is highly competitive and Tata Power faces stiff competition from other established players as well as new entrants. Any increase in competition could impact the company’s market share and earnings potential, which could affect its stock price.
- Investments and acquisitions – Tata Power has been actively pursuing growth opportunities through investments and acquisitions in recent years. Any new investment or acquisition activity could have an impact on the company’s financial performance and future growth prospects, which could in turn affect its stock price.
- Technology and innovation – The power sector is undergoing rapid technological changes, with new innovations and advancements being made in renewable energy and other areas. Tata Power’s ability to adapt and innovate in this changing landscape could have an impact on its future performance and stock price.
- Environmental and social factors – With an increasing focus on sustainability and ESG (environmental, social, and governance) factors, any adverse impact of Tata Power’s operations on the environment or society could lead to negative investor sentiment towards the stock, potentially affecting its price.
Tata Power’s Financial Performance in Recent Years
Tata Power’s financial performance has been inconsistent in the past few years. In the fiscal year 2021-22, the company reported a revenue of INR 42,816 crores, a growth of 30.9% from the previous year. The company’s net profit declined to 15% as compared to 26% in the fiscal year 2020- 2021.
Last 5 Years sales growth & Profit
| Year | Sales Growth | Profit | EPS | Dividend Payout |
| 2021-22 | 30.92% | 49.83% | 5.45 | 32% |
| 2020-21 | 12.24% | 9.35% | 3.53 | 44% |
| 2019-20 | – 2.49% | -49.50% | 3.76 | 41% |
| 2018-19 | 11.33% | -0.19% | 8.71 | 15% |
| 2017-18 | -2.71% | 137.36% | 8.90 | 15% |
Tata Power has continued to invest in growth opportunities, with a focus on renewable energy and sustainable development. In FY 2022, the company added 707 MW of renewable capacity to its portfolio, taking its total renewable capacity to 4,655 MW.
Just like Tata power is shifting its focus to green energy, we have also researched about best electric vehicle stocks in India as EV stocks may also get uprise with more boom in the green energy sector.
Conclusion
In conclusion, Tata Power is a leading power company in India that has shown strong growth potential in recent years. Based on our analysis, we believe that Tata Power’s stock price could continue to grow in the coming years. However, investors should be mindful of the risks associated with investing in the stock market and do their own research before making any investment decisions.
Frequently Asked Questions
The decision to invest in a stock like Tata Power depends on various factors such as your investment horizon, risk appetite, and investment goals.
You should consult with your financial advisor before making any investment decisions.
Some potential risks associated with investing in Tata Power include changes in government policies and regulations, competition from other power companies, fluctuations in commodity prices, and macroeconomic factors such as inflation and interest rates.
Tata Power’s dividend yield is around 0.84%, which is lower than the industry average.
Tata Power is a leading integrated power company in India that generates, transmits, and distributes electricity. The company is a part of the Tata Group and operates in India, Singapore, and South Africa.
As of the date of writing this blog post, the current market price of Tata Power is Rs 208 per share.
Over the past five years, Tata Power’s stock price has shown an upward trend with occasional dips and corrections. However, past performance is not necessarily indicative of future results.
