Tata Power’s shares surged sharply on Thursday to hit a new all-time high after the stock received a thumbs-up from a global brokerage firm

What Happened: JM Financial upgraded the stock from a “hold” to a “buy” rating and raised its price target by 40% to ₹350, up from the earlier ₹220. The revised target suggests a potential 24% rally over the next 12 months.

In its recent report, JM Financial highlighted four key elements of Tata Power’s strategic recalibration plan. These include capitalising on the lucrative group captive renewables opportunity, divesting from low-value businesses, entering the brownfield hydro storage sector and extending the transmission business beyond distribution.

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Analysts at JM Financial project a 15% compound annual growth rate (CAGR) for revenue, a 23% growth in EBITDA and a 32% increase in net profit from the financial year 2023 to 2026.

They anticipate that Tata Power’s earnings will be bolstered by an expanding asset base and an enhanced margin profile.

Tata Power recently secured the Bikaner-Neemrana transmission project, aimed at improving the evacuation of renewable energy in India. The company also has a robust order book and stands to gain from anticipated government focus on the power infrastructure sector in the upcoming years.

Price Action: Tata Power’s shares climbed 9.99% higher to reach ₹323.55 in late afternoon trade on Thursday.

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