Shares of Tata Power Company rose over 4% after the company reported its Q2 FY25 results, prompting several brokerages to reaffirm their ‘Buy’ ratings. Elara Securities upgraded its rating from ‘Accumulate’ to ‘Buy’ and raised its target price to ₹518 from ₹463, highlighting potential benefits from increased power transmission capital expenditure, distribution reforms, and green investments. Other brokerages, including Motilal Oswal Financial Services, JM Financial, and Nomura, also maintained ‘Buy’ ratings. Morgan Stanley remained optimistic as well, keeping an ‘Overweight’ rating and setting a higher target price of ₹577.
However, Nuvama adopted a more cautious stance due to high valuations, retaining its ‘Reduce’ rating, while Jefferies maintained an ‘Underperform’ rating with a reduced target price of ₹340.
As of 1:45 PM, Tata Power’s shares were trading 3.6% higher at ₹442, reflecting a robust year-to-date gain of 35%, significantly outpacing the Nifty 50’s 11% rise.
In its Q2 FY25 report, Tata Power announced a 6% year-on-year increase in consolidated net profit, reaching ₹926.5 crore, while revenue remained flat at ₹15,697.7 crore, primarily due to lower generation revenue during the monsoon season. This result marks the company’s 20th consecutive quarter of profit growth. The EBITDA for the quarter rose 23% year-on-year to ₹3,808 crore.
Tata Power also exceeded 15 GW of installed generation capacity, with its clean energy portfolio now totaling over 12.9 GW, including 6.4 GW operational and 6.5 GW under construction. The company incurred approximately ₹5,200 crore in capital expenditure during Q2 FY25, bringing its total for the first half of the fiscal year to ₹9,100 crore, against a full-year target of around ₹20,000 crore.
Despite a decline in revenue from the Generation and Renewables segments—down 13% and 11% year-on-year, respectively—Transmission and Distribution revenue grew by 8% to ₹10,207 crore, benefiting from reduced distribution losses in Odisha.
Overall, Tata Power’s strong performance and strategic focus on renewable energy have generated a mixed sentiment among investors, reflecting both optimism and caution in the market.
Disclaimer: This response is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a certified financial advisor before making any investment decisions.
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