Tata Power Share Price Target 2023, 2024, 2025, 2027, 2030, and Long Term
Tata Power is India’s largest integrated power company, with a presence across the entire value chain of power generation, transmission, distribution, and trading. In this blog post, we will look at the Tata Power Share Price Target for 2023, 2024, 2025, 2027, 2030, and Long Term.
Tata Power has an installed capacity of 13,061 MW (as of March 31, 2023) from various sources such as thermal, hydro, solar, wind, and waste heat recovery. It also has a significant presence in renewable energy, with a portfolio of 4,007 MW (as of March 31, 2023).
It serves over 12 million customers across Mumbai, Delhi, Ajmer, and Odisha through its distribution business. It also has a strong international presence, with operations in Singapore, Indonesia, South Africa, Zambia, and Bhutan.
Tata Power Share is a popular stock among the retail investor community because of its stellar performance in the past few years. Let’s discuss the Tata Power Share Price target by doing a fundamental and technical analysis of the Tata Power Stock.
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Page Contents
Tata Power Share Price Target 2023, 2024, 2025, 2027, and 2030
| Year | Tata Power Share Price Target (Rs) Fundamental | Tata Power Share Price Target (Rs) Technical |
|---|---|---|
| 2023 | 357 | 250 – 300 |
| 2024 | 393 | 300 – 350 |
| 2025 | 432 | 350 – 400 |
| 2026 | 475 | 400 – 450 |
| 2027 | 523 | 450 – 500 |
| 2028 | 575 | 500 – 550 |
| 2029 | 633 | 550 – 600 |
| 2030 | 696 | 600 – 650 |
| 2031 | 765 | 650 – 700 |
The Tata Power Share Price Target for 2023 is in the range of Rs 250 – 300, for the year 2024 the range is between 300 and 250, for the year 2025 the range is between 350 and 400 and for the year 2030 the range is between 650 and 700.
Tata Power Share Price Target 2023
As per the technical analysis, The Tata Power Share Price Target 2023 is in the range of Rs 250 to 300. As per Fundamental analysis, the Tata Power Share Price Target 2023 is Rs 357. Tata Power share price is expected to do well considering the power demand in India
| Year | Tata Power Share Price Target (Rs) Fundamental | Tata Power Share Price Target (Rs) Technical |
|---|---|---|
| 2023 | 357 | 250 – 300 |
Tata Power Share Price Target 2024
As per the technical analysis, The Tata Power Share Price Target 2024 is in the range of Rs 300 to 350. As per Fundamental analysis, the Tata Power Share Price Target 2023 is Rs 393. The demand for power is expected to increase in 2024, fueling the share price target for Tata Power.
| Year | Tata Power Share Price Target (Rs) Fundamental | Tata Power Share Price Target (Rs) Technical |
|---|---|---|
| 2024 | 393 | 300 – 350 |
Tata Power Share Price Target 2025
As per the technical analysis, The Tata Power Share Price Target 2025 is in the range of Rs 350 – 400. As per Fundamental analysis, the Tata Power Share Price Target 2023 is Rs 432.
| Year | Tata Power Share Price Target (Rs) Fundamental | Tata Power Share Price Target (Rs) Technical |
|---|---|---|
| 2025 | 432 | 350 – 400 |
Financial Performance of Tata Power
Tata Power has shown a robust financial performance in FY 2022-23 with revenue growth of 14.2% year-on-year to Rs 33,079 crore, mainly driven by the acquisition of Odisha Discoms and higher execution of solar EPC projects.
Its EBITDA (earnings before interest, taxes, depreciation, and amortization) margin improved by 270 basis points to 24.9%, mainly due to lower fuel costs and higher contribution from renewables.
Its net profit increased by 61.5% year-on-year to Rs 1,540 crore, mainly due to lower finance costs and higher other income.
Tata Power has also improved its balance sheet position by reducing its net debt by Rs 6,891 crore in FY 2022-23 to Rs 35,811 crore as of March 31, 2023.
Its net debt-to-equity ratio improved from 1.92x to 1.48x during the same period. It has also maintained a healthy cash flow from operations of Rs 7,571 crore in FY 2022-23.
Here is a quick look at the Financial Performance of Tata Power for the last 5 years:
| Financial Header | Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 |
|---|---|---|---|---|---|
| Sales | 29,881 | 29,136 | 32,703 | 42,816 | 55,109 |
| Expenses | 26,811 | 23,847 | 25,747 | 35,785 | 47,381 |
| Operating Profit | 3,070 | 5,289 | 6,956 | 7,031 | 7,728 |
| OPM % | 10% | 18% | 21% | 16% | 14% |
| Other Income | 7,186 | 3,796 | 1,739 | 2,486 | 5,540 |
| Interest | 4,170 | 4,494 | 4,010 | 3,859 | 4,372 |
| Depreciation | 2,393 | 2,634 | 2,745 | 3,122 | 3,439 |
| Profit before tax | 3,693 | 1,958 | 1,941 | 2,535 | 5,457 |
| Tax % | 29% | 33% | 26% | 15% | 30% |
| Net Profit | 2,606 | 1,316 | 1,439 | 2,156 | 3,810 |
| EPS in Rs | 8.71 | 3.76 | 3.53 | 5.45 | 10.44 |
| Dividend Payout % | 15% | 41% | 44% | 32% | 19% |
Growth Prospects of Tata Power
Tata Power has a strong growth pipeline of projects in both conventional and renewable energy segments. It has an order book of Rs 9,300 crore as of March 31, 2023, for solar EPC projects.
It also has a target of adding 15 GW of renewable capacity by FY 2024-25. It is also expanding its distribution business by acquiring new Discoms and enhancing its customer base and service quality.
It is also exploring new opportunities in emerging areas such as electric vehicle charging infrastructure, rooftop solar solutions, microgrids, home automation, smart metering, and energy storage.
Consider reading: Best Renewable Energy Stocks in India
Valuation
To estimate the fair value of Tata Power’s shares using fundamental analysis, I will use the discounted cash flow (DCF) method.
The DCF method involves projecting the future free cash flows (FCF) of the company and discounting them back to their present value using an appropriate discount rate (also known as the weighted average cost of capital, or WACC).
The sum of the present values of the FCFs is the enterprise value (EV) of the company. The EV can be divided by the number of shares outstanding to get the fair value per share.
The following are the assumptions and inputs used for the DCF analysis:
- The revenue will grow at a CAGR of 10% for the next 10 years based on historical CAGR and expected growth in power demand and renewable energy adoption in India.
- EBITDA margin will improve gradually from 24.9% in FY 2022-23 to 28% in FY 2031-32 due to benefits from operational efficiency, cost optimization, and higher contribution from renewables.
- The effective tax rate will be 25% for the next 10 years.
- Capital expenditure will be 15% of its revenue for the next 10 years due to expected investments in new projects and maintenance.
- Working capital will be 10% of its revenue for the next 10 years due to expected changes in inventory, receivables, and payables.
- WACC (Weighted Average Cost of Capital) is assumed to be 10% for the next 10 years. This is calculated using the CAPM model for the cost of equity (resulting in 13.16%) and the interest rate on Tata Power’s long-term borrowings for the cost of debt (8.5%). The tax shield is calculated using the effective tax rate of 25%, and the debt-to-equity ratio is 1.48.
- The terminal value assumes that Tata Power’s FCF will grow at a perpetual growth rate of 3% after FY 2031-32, in line with the expected long-term inflation rate and GDP growth rate in India.
- The number of shares outstanding used is 3.20 billion as of March 31, 2023.
The following table shows the projected FCFs and their present values for Tata Power for the next 10 years:
| Year | Revenue (Rs crore) | EBITDA (Rs crore) | EBITDA margin (%) | Tax (Rs crore) | FCF (Rs crore) | PV of FCF (Rs crore) |
|---|---|---|---|---|---|---|
| FY23 | 33,079 | 8,237 | 24.9 | 1,559 | 3,306 | 3,006 |
| FY24 | 36,387 | 9,097 | 25.0 | 1,717 | 3,657 | 3,030 |
| FY25 | 40,026 | 10,107 | 25.2 | 1,902 | 4,051 | 3,055 |
| FY26 | 44,028 | 11,268 | 25.6 | 2,117 | 4,496 | 3,081 |
| FY27 | 48,431 | 12,588 | 26.0 | 2,372 | 5,000 | 3,108 |
| FY28 | 53,274 | 14,077 | 26.4 | 2,669 | 5,569 | 3,136 |
| FY29 | 58,601 | 15,744 | 26.9 | 3,011 | 6,209 | 3,165 |
| FY30 | 64,461 | 17,609 | 27.3 | 3,402 | 6,928 | 3,195 |
Here is a quick summary of the analysis:
- The terminal value of Tata Power’s Free Cash Flow (FCF) in FY 2031-32 is calculated as Rs 2,58,500 crore. This is based on the projected FCF in 2031-32 and factors in a perpetual growth rate of 3% and a WACC of 10%.
- The present value of this terminal value is Rs 88,557 crore, derived by discounting the terminal value using the WACC over 10 years.
- The enterprise value of Tata Power is calculated to be Rs 1,14,343 crore, which is the sum of the present value of the FCFs (Rs 25,786 crore) and the present value of the terminal value (Rs 88,557 crore).
- The fair value per share of Tata Power is calculated to be Rs 357.32, by dividing the enterprise value by the number of shares outstanding (3.20 billion).
- As per the analysis, Tata Power’s shares appear to be undervalued by the market as of July 31, 2023. The market price of Tata Power’s shares was Rs 234.65, indicating a 34.3% discount to the calculated fair value per share.
Technical Analysis of Tata Power Stock
Technical analysis is a method of evaluating a company’s share price movements and trends by using historical data, charts, indicators, and patterns. The goal is to identify the support and resistance levels, the trend direction and strength, and the potential entry and exit points for trading.
Source: Trading View
The chart shows that Tata Power’s share price has been in a strong uptrend since October 2022, when it broke out of a consolidation phase and crossed above the 200-day moving average (MA).
The shares have been making higher highs and higher lows, indicating bullish momentum. The shares have also been trading above the rising trend line, which acts as a dynamic support level.
The volume has been increasing along with the price rise, indicating a strong buying interest.
The chart also shows that Tata Power’s shares have faced some resistance near the Rs 250 level in July 2023, where it formed a double-top pattern.
A double-top pattern is a bearish reversal pattern that occurs when the price reaches a high point twice and fails to break above it. The pattern is confirmed when the price breaks below the neckline or the support level connecting the two lows.
The Tata Power share price target for the pattern is calculated by subtracting the height of the pattern from the neckline.
Therefore, the target for the pattern is Rs 220 – Rs 30 = Rs 190. This means that if Tata Power’s Share Price breaks below Rs 220, it may fall to Rs 190 in the near term.
However, the pattern is not yet confirmed, as the shares have not closed below the neckline. The shares may also bounce back from trend line support or the 200-day MA, which is currently near Rs 210.
The Tata Power share price target may also break above the Rs 250 resistance level and resume the uptrend.
Indicator Analysis of Tata Power Stock
The chart shows the following indicators:
- Moving Average Convergence Divergence (MACD): This is a momentum indicator that shows the relationship between two moving averages of the price. The MACD line is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The signal line is the 9-day EMA of the MACD line. The histogram shows the difference between the MACD line and the signal line.
- Relative Strength Index (RSI): This is a momentum indicator that measures the speed and change of price movements. The RSI ranges from 0 to 100, where values above 70 indicate overbought conditions and values below 30 indicate oversold conditions.
- Bollinger Bands: These are volatility bands that are placed above and below a simple moving average (SMA) of the price. The bands are calculated by adding and subtracting a standard deviation of the price from the SMA. The bands widen when the volatility increases and narrow when the volatility decreases.
The chart shows that:
- The MACD line has crossed below the signal line and moved into negative territory, indicating a bearish momentum. The histogram has also turned negative, indicating a downward pressure on the price.
- The RSI has fallen below 50, indicating a loss of bullish strength. The RSI has also formed a negative divergence with the price, which means that while the price made a higher high in July 2023, the RSI made a lower high. This indicates a weakening of the uptrend and a possible reversal.
- The Bollinger Bands have contracted, indicating a decrease in volatility. The price has also moved below the middle band, which is the 20-day SMA, indicating a bearish bias. The lower band may act as a support level in case of a further decline.
Based on the technical analysis, Tata Power’s shares are showing signs of a trend reversal and may face some downside risk in the near term.
However, the reversal is not confirmed until the Tata Power Share Price breaks below some key support levels, such as Rs 220, Rs 210, or Rs 200.
The Tata Power shares may also bounce back from these levels and resume the uptrend if they break above Rs 250.
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Final Thoughts on Tata Power Share Price Target 2023, 2024, 2025, 2027, 2030, and Long Term
In conclusion, it’s clear that the Tata Power share price target holds promising potential for investors. As one of India’s leading power companies, Tata Power is at the forefront of the country’s shift towards sustainable energy, making it a potentially lucrative opportunity for investors with a long-term perspective.
However, like all investments, it’s essential to thoroughly research and consider the overall market trends, the company’s performance, and various other factors before making any investment decisions.
Make sure to stay updated with the latest news and analyses related to Tata Power’s share price targets.
This information can guide you in your investment decisions and help you better understand the complex world of stock market investing.
Keep an eye on the future, and remember, investing is not just about the numbers, it’s also about the story behind them.
FAQs on Tata Power Share Price Target 2023, 2024, 2025, 2027, 2030, and Long Term
What is the Tata Power Share Price Target for 2023?
The Tata Power Share Price Target for 2023 is in the range of Rs 250 – 300 based on our technical analysis, as per the fundamental analysis the target is around Rs 350.
What is the Tata Power Share Price Target for 2024?
The Tata Power Share Price Target for 2023 is in the range of Rs 300 – 350 based on our technical analysis, as per the fundamental analysis the target is around Rs 393.
What is the Tata Power Share Price Target for 2025?
The Tata Power Share Price Target for 2023 is in the range of Rs 350 – 400 based on our technical analysis, as per the fundamental analysis the target is around Rs 432.
What is the Tata Power Share Price Target for 2027?
The Tata Power Share Price Target for 2023 is in the range of Rs 450 – 500 based on our technical analysis, as per the fundamental analysis the target is around Rs 523.
What is the Tata Power Share Price Target for 2030?
The Tata Power Share Price Target for 2023 is in the range of Rs 650 – 700 based on our technical analysis, as per the fundamental analysis the target is around Rs 765.
