Tata Power shares surge as Q3 net profit nearly doubles: Buy/hold?

New Delhi, Feb. 6 -- Shares of Tata Power surged more than 2% to Rs.209 apiece on the BSE in Monday's early deals after its Q3 net profit nearly doubled to Rs.1,052 crore while its total income rose to Rs.14,402 crore in the quarter from Rs.11,018.7 crore in the same quarter a year ago.

Brokerages on Tata Power shares post Q3 results -

"Tata Power Company (TPWR) reported strong results. Note, in 3QFY23, share of profits from associates was INR 10 bn, up 52% YoY, led by coal windfall gains. Consolidated revenue for the quarter was up 30% YoY on account of strong PAF in Mundra, higher sales across DISCOMs, and capacity addition in RE space. We retain BUY recommendation for the stock with a target price of Rs.272," said Antique Stock Broking.

"The management seeks to: 1) scale up RE capacity to 15.0GW by FY25 from the current 3.9GW, 2) increase focus on the power distribution business, and 3) seize opportunity in the solar EPC business. We roll over to FY25E, while maintaining FY23E/24E estimates. We raise our target price from Rs.258 to Rs.272 on SOTP (FY25E). We upgrade to Buy given a 20% fall in the stock price since the peak in Sep-22," recommended Elara Capital.

"TPWR outperformed on PAT by 32% led by all business segments and the CERC order impact. While we remain structurally positive on Tata Power, watch out for deterioration in some key items. TPCL is likely to receive Rs.20 bn from RE monetisation soon, providing equity support that should help it accelerate RE manufacturing and generation business. EPC margin is the key variable to keep an eye out for. This coupled with the stock's rich valuation forces our hand to maintain 'HOLD/SN' with a TP of Rs.217," said Nuvama Research.

Tata Power is among a leading integrated power companies with a managed capacity of 14,101 MW. The company has its presence in generation of renewable as well as conventional power including hydro and thermal energy, transmission & distribution and trading.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. Published by HT Digital Content Services with permission from MINT. For any query with respect to this article or any other content requirement, please contact Editor at contentservices@htlive.com