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Tata Power projecting a 33% downside, says CLSA. At the end of the September quarter, Tata Pow...

Posted: 05 Nov 2024

Tata Power projecting a 33% downside, says CLSA. At the end of the September quarter, Tata Power had 44.84 lakh retail shareholders, who now own 23.08% stake in the company. At the end of the September quarter last year, the company had 37 lakh retail shareholders, with a similar shareholding in percentage terms. For the September quarter, Tata Power's revenue remained flat at ?15,697.7 crore, while its net profit increased by 6% to ?926.5 crore, aided by higher other income. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) increased by 21.2% year-on-year, while margins expanded by over 400 basis points to 23.9%. CLSA believes that the only bright spot for Tata Power in the quarter gone by was the Renewable Energy EPC business, which did well due to the module import ban and a fall in cell prices. The brokerage has maintained its "underperform" recommendation on the stock as it has surged over 80% so far in 2024, without any significant change in profitability, thereby making its current valuations "expensive." CLSA has a price target of ?297 on the stock, which implies a potential downside of 33% for the stock from Friday's closing levels. On the flip side, Investec has a "hold" recommendation on the stock with a price target of ?467. A growing renewables business, falling Odisha AT&C losses and improving profitability in Mundra will help partially offset the steep fall in profit across the Indonesian coal business, Investec said. Out of the 23 analysts that have coverage on Tata Power, 14 of them still have a "buy" rating on the stock, one has a "hold" recommendation, while the other eight have a "sell" rating. Shares of Tata Power are currently trading 3.7% lower on Monday at ?429.2. The stock is still up 30% so far in 2024 but has risen 72% over the last 12 months. Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!