Tata Power‘s share price has been having a hard time at the bourses recently, the stock is down around 30% in the last year. Since the start of the year, shares of the company have slumped around 10% and the stock even touched its 52-week low in March.
However, the Tata Group company has given great returns in the long term. Just in the last three years, Tata Power’s share price has gone up 397%. The stock has jumped from ₹40 levels in March 2020 to the level of around ₹190 in mid-April. With the recent slump, should you focus your attention on the energy stock? We do a deep dive in this article.
Tata Power Company History
Tata Power is one of the oldest companies of the Tata Group. Tata Power was formerly a part of the three entities jointly known as Tata Electric Companies. The company in its current being came into the 2000s when three different Tata Group companies, Tata Hydro-Electric Co. Ltd., The Andhra Valley Power Supply
Co. Ltd., and Tata Power Co. Ltd., were amalgamated into one entity — The Tata Power Company Limited.
The energy company that has been operational for over a century now has a generation capacity of 14,076 MW. The company currently distributes to over 12 million customers. The company has also been increasing its focus on renewable energy. Currently, 37% of its power generation output comes from clean energy sources.
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Tata Power Shareholding Pattern
As of December 2022, promoter holdings in the stock stood at 46.86%. Foreign Institutional Investors held a 9.63% stake in the company. Public shareholding stood at around 39%. Mutual Funds held around 4.04% shares of the company. However, monthly mutual-fund shareholding data shows that funds have been cutting stakes in the company. Until February 2023, mutual funds had cut their holdings in the company by 22%. It seems that the funds are not really buying the dip in the Tata Power share price.
Tata Power Fundamentals
The company’s numbers have been on an uptick for the last three years. The company’s consolidated revenue from operations in FY21 stood at ₹32,468.1 crore around an 11.8% YoY increase. The number climbed up 31.87% YoY in FY22 when the company posted revenue of ₹43,735.6. In FY23 the company posted revenues of ₹42,655.3 Crore as of the end of the December quarter.
Talking about the company’s net profits, the energy giant net profits stood at ₹1,127.4 Crore in FY21, up around 11% YoY. Net profits saw a massive 54% YoY jump in FY22 to ₹1,741.5 Crore. In FY23, the company has already booked profits of ₹2,558 Crore by the end of the third quarter. The company’s basic earnings per share (EPS) stood at ₹5.4 at the end of FY22.
Tata Power Analyst Ratings
Most domestic brokerages remain positive on the stock. ICICI Securities and BOB Capital Markets have a ‘buy’ rating and see the Tata Power share price going up to ₹262 and ₹271, respectively, with a 12-month timeline in mind.
HDFC Securities has an ‘add’ rating for the stock with a price target of ₹243. However, global analyst firm Jefferies has an ‘underperform’ rating for the stock with a price target of ₹175.
This compares with the Tata Power Company Limited’s market price of ₹195.85 as of April 17.
Tata Power Dividend History
The power company has been pretty consistent with dividends. The company has paid dividends each year for the past 12 years. Since 2010, the company has given out a total dividend of ₹29.3. The company is yet to announce a final dividend for FY23.
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