THIS Tata Group Stock May Jump 21%, Says Motilal Oswal; Bullish On Robust Growth Outlook; Should You Buy?

Tata Power Share Price Today: The Government's focus on liberalisation of the power distribution sector, finalisation of multiple projects, capex expansion, and other factors are likely to boost Tata Power Company's growth outlook in the long term. The Tata Group stock is likely to see a strong upside of 21% in the coming months, noted Motilal Oswal in its report on Monday, October 27.

Tata Power shares were trading 0.65% higher at Rs 400 per share on BSE with a market capitalisation of Rs 1,27,813.58 crore. The stock had touched an intraday high mark of Rs 401.25 per share and an intraday low mark of Rs 395.25 per share.

Tata Power Share Price Outlook

The government is focusing on liberalising the distribution sector. Additionally, the recent proposal will also pave the way for enhanced competition, cost reduction and improved service quality. Tata Power is attempting to diversify its profile by bidding for a distribution tender in more districts, including Uttar Pradesh

As per Motilal Oswal, "finalisation of a supplementary power purchase agreement (SPPA) for the Mundra plant and progress in the installed capacity across the renewable independent power producer (IPP) and pumped storage businesses," would help Tata Power in strengthening its business.

Tata Power Share Price Recommendation

"We reiterate our BUY rating on Tata Power (TPWR) and highlight it as a key beneficiary of the government's focus on liberalising the distribution sector," noted the brokerage in its report.

"The regulated business is valued using a 2.5x multiple on regulated equity. The coal segment is valued based on equity with a 1.5x multiple of FY24 book value. The renewable segment is valued at a 14x multiple of projected FY27 EBITDA. The pumped storage segment is valued at 1x PB, while other segments are valued at 1.5x PB. Cash and investments add INR60/share," read MOFSL report.

"The sum of these contributions results in a TP of INR480/share, reflecting the comprehensive valuation of TPWR's diverse business segments," it added.

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