टाटा पावर खरीदें; 490 रुपये का लक्ष्य: आईसीआईसीआई सिक्योरिटीज

Buy Tata Power; target of Rs 490: ICICI Securities

ICICI Securities recently released a comprehensive research report on Tata Power, highlighting the company's significant strides in the renewable energy (RE) sector and its strategic positioning in various segments of the market. With a keen focus on both asset-light and asset-heavy businesses, Tata Power has emerged as a formidable player in the RE space, boasting a diverse portfolio of renewable assets, solar manufacturing capabilities, rooftop solar solutions, and ventures into electric vehicle charging infrastructure.

Key highlights of Tata Power's RE platform include:

1. Renewable Assets: The company has successfully developed renewable assets totaling 10 gigawatts (GW), demonstrating a strong commitment to clean energy generation.

2. Solar Manufacturing: Tata Power has established solar manufacturing facilities with a capacity of 4 GW, reinforcing its vertical integration strategy in the solar energy value chain.

3. Solar EPC Arm: Through its solar engineering, procurement, and construction (EPC) arm, Tata Power has positioned itself as a leader in delivering end-to-end solar solutions.

4. Rooftop Solar: Recognizing the potential of distributed solar generation, the company has ventured into rooftop solar installations, catering to both residential and commercial segments.

5. Pumped Storage Systems: Tata Power is currently engaged in the development of two pumped storage systems, indicating its commitment to exploring innovative energy storage solutions.

6. Electric Vehicle Charging Market: Leveraging its first-mover advantage, Tata Power has established a significant presence in the electric vehicle charging market, aligning with the global shift towards sustainable transportation.

Additionally, Tata Power's stature as one of the largest private Discoms (distribution companies) in the country further solidifies its position in the energy sector. The company's ambitions extend beyond generation and distribution, with strategic initiatives aimed at expanding its transmission business evident through recent successful bids in transmission projects. In terms of financial performance, Tata Power reported adjusted profits of Rs. 8 billion in the fourth quarter of FY24, reflecting a modest 5% year-on-year (yoy) growth. Similarly, for the entire fiscal year FY24, the company achieved adjusted profits of Rs. 32 billion, marking a 3% yoy increase. The subdued profit growth can be attributed to the impact of low international coal prices, underscoring the inherent volatility associated with energy markets.

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