Tata Power vs Adani Power: Which Stock Gave Better Returns In The Past 3 Years?

Two of India’s biggest players in the energy sector are Adani Power and Tata Power. Both companies are part of India’s biggest conglomerates and are widely covered in the Indian markets. The stocks had a lacklustre start to the year, with both stock reaching record lows earlier in the year.

However, recently both stocks have recovered quite a bit. In the past month, Adani Power’s share price has gone up over 15%, while Tata Power shares are up close to 4%.

The Investment: A ₹10,000 investment in Adani Power three years back on Aug 11, 2020, would have bought you around 279 shares of the company as the company traded around ₹35-₹40 levels. Today, as the stock trade around ₹270 levels, those shares would have been worth around ₹75,000.

A ₹10,000 investment in Tata Power on Aug 11, 2020, when the stock traded around ₹55-₹60 levels, would have bought around 180 shares of the company. Today, as the stock is near ₹240 levels, the value of those 180 shares would have surged to ₹41,000.

In absolute terms, an investor would have made more money from the Adani Group stock in the past three years.

The Financials: Over the past three years, the companies, just like their stock price has seen exponential growth. Here is a look at the two company’s financials over the last three financial years.

RevenueTata Power56,547.1043,735.6032,907.30
Adani Power43,040.5031,686.5028,149.70
ProfitTata Power3,336.401,741.501,127.40
Adani Power10,726.604,911.601,270
All figures are in ₹ crore.

For the past three years, Tata Power has seen revenue grew at a compound annual growth rate of 23.9%. Adani Power’s revenue has grown at a compound annual growth rate (CAGR) of 15.6%. Tata Power’s net profit grew at a CAGR of 48.6%. Adani Power’s profit growth has been exponential with a three-year CAGR of 571.5%.

Key Factors: Apart from the financials there are many key metrics that an investor should look at before investing. One such metric is EPS (earnings per share). Adani Power’s EPS for FY23 was at ₹24.6. Tata Power’s EPS for the same period was ₹10.4.

Adani Power currently trades at a P/E ratio (price to earnings) of 7.3x, whereas Tata Power trades at a P/E ratio of 22x.

Promoter holding in Adani Power at the end of the June quarter stood at around 75%. Promoted holding Tata Power stood at 46.9%. Promoter’s pledged shares stood at 25% for Adani Power, while the number was 1.40% for Tata Power.

These are some of the things one should consider when evaluating an investment. However, apart from these are several other factors that can impact a stock’s performance. For example, the Adani Power share price was heavily affected by the Hindenburg Report that was published earlier this year.

Read Next: Paytm Shares Have Surged Over 50% YTD, But Analyst Still Sees Over 20% Upside

Disclaimer: Benzinga India doesn’t give financial advice. The above article is for educational purposes alone.

Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.

Posted In: EquitiesEducationMarketsGeneralAdani GroupAdani PowerTata GroupTata Power