Tata Power Limited (TPL) is one of the largest integrated power companies in India. The company has a diversified portfolio of thermal, hydro, renewable and clean energy assets. TPL is also a leading player in the Indian transmission and distribution segment. Over the past three years, Tata Power’s stock price has soared by over 300%, making it one of the most rewarding investments for shareholders. Read this article to know why you can consider investing in this stock.
Weekly Chart of Tata Power on NSE
Over the past three years, the company’s stock has seen an astounding surge, rising from nearly ₹55 per share in 2020 to crossing the ₹250 mark in 2023, signifying a growth of over 300%.
There are several reasons for TPL’s success. The company has a strong track record of execution and a diversified project portfolio. TPL is also well-positioned to benefit from the Indian government’s focus on renewable energy.
In addition, TPL has a strong balance sheet and a healthy cash flow. The company is also expanding its business overseas.
Vision for a Sustainable Future
Tata Power is committed to a sustainable energy future. The company envisions achieving a clean and green portfolio, with 80% clean energy by 2030 and aiming for 100% by 2045. Tata Power aims to grow through low carbon businesses, including distribution and new ventures, further solidifying its commitment to a greener world.
India’s Shift towards Green Energy
India is making significant strides in adopting green energy practices. With increasing concerns about climate change and environmental sustainability, the country is gradually transitioning to cleaner and more eco-friendly energy sources. The government’s support for renewable energy initiatives has played a pivotal role in this shift, providing incentives and policies to promote clean energy adoption.
Q1 FY2023-24 Highlights – Why makes this stock tick?
- Tata Power’s subsidiary, TPREL, has been granted a Letter of Award (LoA) to establish a 966 MW Group Captive RTC Hybrid Renewable Power Project for Tata Steel, demonstrating the company’s commitment to expanding its renewable energy footprint.
- Tata Power’s commitment to excellence has not gone unnoticed. In 2023, Fortune India recognized Tata Power as the “Employer of the Future” for the second consecutive time, underlining the company’s focus on nurturing talent.
- Tata Power has partnered with the Ayodhya Development Authority to install electric vehicle (EV) charging stations in various public parking areas, contributing to the growth of the EV ecosystem.
- Tata Power’s smart meter installations have crossed an impressive 6,50,000+ across Tata Power DISCOMs in Odisha, Delhi, and Mumbai, marking a substantial step towards grid modernization.
- The company’s engineering, procurement, and construction (EPC) business have an impressive order book of ~4,200 MW, valued at ₹17,600+ Crore, with third-party EPC accounting for 57% of the total.
Strong Financial Performance in Q1 FY23-24
Tata Power’s financial performance in Q1 FY23-24 reflects its position as one of India’s largest integrated power companies. The company reported a remarkable 29% growth in net profit, reaching ₹1,141 crore. This achievement marks the 15th consecutive quarter of year-on-year net profit growth.
The consolidated revenue for the reporting quarter stood at ₹15,003 crore, and EBITDA rose by an impressive 43% to ₹3,005 crore. Tata Power’s robust financial performance is attributed to sustained business growth across all clusters, showcasing its resilience and ability to thrive in a dynamic market.
For investors seeking opportunities in the power sector of the Indian economy, Tata Power’s remarkable growth and the factors underpinning its success position it as a compelling choice. However, due diligence and individual financial goals should guide investment decisions.
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