4 Power Stocks To Buy That Can Give Superlative Returns Of Upto 40%

Power stocks have seen their share price dropping and there is a potential for some of these stocks to rally. In fact, firms like Emkay Global have set substantially higher target price on stocks like CESC, which can give up to 40% returns.

Buy Power Grid and CESC stocks

Emkay has placed a target price of Rs 101 on the stock of CESC, which means an upside potential of nearly 40% from the current levels of Rs 72.65. On PowerGrid the brokerage has a buy with a price target of Rs 250, implying an upside of 15% from the current levels.

"CESC has seen strong generation growth for the month - 12.4% YoY, leading to 8.3% YoY growth for 10M. In case of CESC, performance of DFs and tariff revision at the standalone entity remain key concerns. Rajasthan DFs, despite having completed 4/5 years, have not been able to see breakeven because of the Kota circle; such DFs made H1FY23 loss of Rs180mn vs. Rs 210 mn loss YoY. Malegaon losses widened to Rs 480 mn during H1FY23 vs. loss of Rs290 mn YoY. Power Grid remains a low earnings-growth (3- 5%) story in the medium term, with 6/7% dividend yield," the brokerage has said.

Buy NHPC stocks and NTPC

Two other stocks where the brokerage has a "buy" include stocks like NTPC and NHPC. On NTPC the brokerage believes that the RE monetization is expected in Q4FY23. "NTPC intends to tender 5/6GW of coal plants over the next 2years. Given the huge under-utilized coal capacity (current PLF in the 75-80% range, while NTPC units have achieved 92-93% PLF earlier, on annual basis), we believe any strong uptick in demand in the medium term stands to benefit NTPC. We maintain our Dec-23 target price of Rs 200 per share for NTPC, which currently trades at 1x with 12% RoE on FY25E," the brokerage has said.

How the prices of these 4-stocks have moved?

Company name	Current market price	52-week high	52-week low
NTPC	166.35	188	123.7
NHPC	41.25	46.9	27.05
CESC	72.45	88	68
PowerdGrid	216.9	248.25	186.35

As can be seen from the above table, the shares of CESC are very close to the 52-week low and the target price on this stock by Emkay Global is significantly higher,

Disclaimer

Please note, this article is picked from the brokerage report of Emkay Global Financial Services with certain value additions. This is not a "buy" call from Greynium Information or the author. Neither the author, nor the brokerage house, nor Greynium Information Technologies should be held responsible for losses incurred based on the above article.