Shares of Tata Power continued its losing streak for the fifth straight session on Thursday even after the Tata Group company posted strong earnings in the March quarter of FY24. The power heavyweight has fallen over 8% in the past five sessions as investors booked profit at higher levels. Tata Power shares touched its fresh all-time high of ₹464.30 in intraday trade on May 3, 2024, with its stock price more than doubling from its 52-week low of ₹201.75 on May 19, 2023.

Early today, Tata Power shares belled the day at ₹428, down 1.7% against the previous closing price of ₹435.45 on the BSE. Extending opening losses, the Tata Group stock tumbled as much as 3.65% to ₹419, while its market capitalisation slipped by more than ₹4,000 crore to ₹1.35 lakh crore.

The weakness in Tata Power shares was in sync with broader market, with both BSE Sensex and NSE Nifty falling up to 0.8% in the first hours of trade so far.

In the last one year, Tata Power shares have delivered 109% returns to its shareholders, while it registered a growth of 72% in its share price in the past six months. In the calendar year 2024, the counter added 29%, while it corrected nearly 1% in a month.

Tata Power released its earnings report post-market hours on Wednesday, which showed that its consolidated profit after tax (PAT) grew for the 18th consecutive quarter to ₹1,046 crore in Q4 FY24, up 11% compared to ₹939 crore in the same period last year. The revenue grew 27% YoY to ₹16,256 crore, while EBITDA rose 8% YoY to ₹3,358 crore. The board of the company has recommended a dividend of ₹2 per equity share, subject to shareholders’ approval.

For the full financial year 2024, the Mumbai-headquartered company clocked consolidated PAT of ₹4,280 crore in FY24, a growth of 12% as compared to ₹3,810 crore in the previous fiscal. The revenue rose 10% to ₹61,542 crore from ₹56,033 crore in FY23, driven by higher availability and plant load factor (PLF) in Mundra and higher execution of projects in Tata Power Solar Systems Ltd (TPSSL). On the operating front, EBITDA stood at ₹12,701, up 26% from ₹10,068 crore in the previous fiscal.

Post Q4, JM Financial has maintained a ‘Buy’ call on the stock with an upgraded target price of ₹490 per share from ₹440 earlier, a potential upside of 12.5% from the current market price.

The domestic brokerage house in its report says that the company continues to benefit from quick turnaround of Odisha discoms, expansion of RE portfolio and operationalisation of Mundra.

As of March 31, 2024, the company has 4.5 GW of renewable capacity operational and another 5.5 GW of projects under implementation, taking the total green energy portfolio to over 10 GW. Tata Power Renewable Energy’s utility scale EPC order book stands at 2.6 GW worth ₹13,400 crore, while Rooftop solar and Group Captive EPC order book was at ₹2,900 crore.

“We continue to believe in it’s growth story involving venturing into brownfield pumped hydro storage, expanding transmission business beyond distribution, emergence of rooftop solar, and visible resolution of the Mundra issue,” the report notes.

On demand outlook, the brokerage says that power demand continues to surge and witnessed a 8% YoY growth in FY24. “The Tata Power’s management believes this trend to continue at least for the next 2-3 years. The coal prices remain stable for the last 6-8 months and are likely to remain stable going forward.”

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