Tata Power shares run out of steam; time to buy, sell or hold?

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Shares of Tata Power are trading under pressure shedding their multibagger tag during the last one year and 2022. Earlier, the Tata group’s power sector stock had given 218% returns during two years. The stock moved from December 2020 level of Rs 71.65 to Rs 228 today. Similarly, Tata Power shares rallied 328% in three years, making it one of the top performing scrips in the power sector during this period. However, the rally has slowed in a year, as the stock has pared most of its gains. The dividend is increased by 3.67% in one year and 3.67% in 2022.

In comparison, Adani Power’s stock has gained 228 per cent in one year and 222 per cent since the beginning of this year. During the three-year period, the Adani Group stock has jumped 445%.

Meanwhile, Tata Power has a one-year beta of 1.2%, indicating high volatility over the period. It is currently trading above the 5-day, 20-day, 50-day and 100-day moving averages but below the 200-day moving average. Tata Power has a high PE ratio of 28.17 as against industry PE of 10.46.

In the second quarter of the current financial year, Tata Power reported an 85 per cent increase in its consolidated net profit at Rs 935.18 crore on the back of higher revenue. The company’s net profit for the quarter ended September 30, 2021 stood at Rs 505.66 crore.

The company’s total income in the second quarter rose to Rs 14,181.07 crore from Rs 10,187.33 crore a year ago. In the current trading session, the stock touched an intraday high of Rs 230.25, up 2.72% on the BSE. They opened at Rs 224 as against previous close of Rs 224.15 on BSE. A total of 5.89 lakh shares of the firm saw a turnover of Rs 13.42 crore in the afternoon session. The market cap of the firm rose to Rs 72,949 crore on BSE.

The stock touched a 52-week high of Rs 298 on Apr 7, 2022 and a 52-week low of Rs 190 on Jun 20, 2022 on BSE.

Read also: Tata Power is evolving as a power solutions provider. What exactly does that mean?

Here’s a look at what analysts had to say amid the stock’s flat returns over the past one year.

Manoj DalmiyaTata Power, Founder and Director, Proficient Equities, said, “Tata Power saw some upside on speculation of fluctuating coal prices. It reported an annual growth of 85 per cent over the previous year’s consolidated profit of Rs 506 crore. Declared a consolidated profit of Rs 935 crore.The stock is in a consolidation phase and may see some momentum above Rs 300 with a target of Rs 350-400 in the longer term.

Abhijeet Tips2trade said, “Despite steady growth in terms of revenue and profitability, the ever-increasing debt in Tata Power’s balance sheet amid a rising interest rate scenario has ensured a slowdown in 2022 in terms of stock price returns. Currently, this stock 210-235. Investors can buy near Rs 210 or wait for a daily close above Rs 335 to buy for a target of Rs 270-295 in coming weeks.

Jitendra UpadhyaySenior Equity Research Analyst at Bonanza Portfolio, said, “It is believed that the long-term potential of the company’s businesses is high as it is best positioned to participate in the Indian government’s renewable energy capacity addition program and any privatisation. If we talk about the role of Tata Power in the electric vehicle sector, the company is continuously setting up power stations at various locations and has already added more than 1000 charging stations and plans to multiply them by 5 times in the next 5 years. The target is. Though the company’s future prospects look strong, yet the company has already peaked for a time in the recent past. From a long-term perspective, it is a good time to buy Tata Power at every dip It is possible

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