Nomura initiated coverage on Tata Power and JSW Energy with a bullish call.

What The Brokerage Said: Global brokerage firm Nomura sees significant opportunities in the energy value chain. The research firm expects India's energy demand to register a 7% CAGR  over FY24-30, which is higher than the historical demand CAGR of 5%. According to Nomura, the upside to estimates will be dependent on developments in data centres and EV penetration. 

Nomura gave a "buy" call for Tata Power with a target price of ₹560, indicating an upside of 27% from the previous closing price. The brokerage expects Tata Power to deliver a 16% EBITDA CAGR over FY24-27. 

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This EBITDA CAGR will be driven by two times growth in renewable energy capacity. Robust delivery on ₹15,700 crore solar EPC order book and jump in Odisha profitability, Nomura added. 

For JSW Energy, the research gave a "buy" call with a target price of ₹885, indicating an upside of 31% from the previous closing price. Nomura sees the company having a 38% EBITDA CAGR over FY24-27. 

The EBITDA CAGR will be dependent on the company growing its operational capacity by twice, the research firm added.

Tata Power is scheduled to announce its Q2 results on October 30. 

Price Action: Shares of Tata Power rose 0.52% to ₹443.60 on Tuesday.

Shares of JSW Energy rose 0.33% to ₹676.45.

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