Tata Group’s Explosive Growth: 34% Gain in Only Four Months Shakes Markets!

Shares of Tata Power Company continued their impressive streak, surging for the third straight session on Tuesday, despite a weak broader market. The share price rose by 3% to touch a 10-month high of ₹243.90 in intraday trade on the Bombay Stock Exchange (BSE). The Tata Group stock witnessed a surge in buying activities, with trading volume more than doubling to nearly 21 lakh crore as compared to the two-week average of 9.14 lakh stocks. Investors rushed to buy the power stock ahead of its first-quarter earnings report, slated to be released on August 9.

Over the last three sessions, Tata Power shares have soared by 10%, marking a substantial rebound of nearly 34% in the past four months from its 52-week low of ₹182.45 on March 28, 2023. The recent rally in the share price can be attributed to positive credit ratings and a stable outlook for the power sector.

Extending its uptrend, Tata Power shares opened marginally higher at ₹237.05 against the previous closing price of ₹236.70 on the BSE. During the session, the stock jumped as much as 3.04% to ₹243.90, propelling the market capitalization to ₹77,552 crore. Currently, the stock trades nearly 3% lower than its 52-week high of ₹251 touched on September 7, 2022.

Tata Power has outperformed the S&P BSE Power index in terms of returns over the last 12 months. The index heavyweight has delivered impressive returns of 9.3% in the last year and 16.8% in the calendar year 2023. In contrast, the BSE Power index has recorded negative returns of 4.2% and 0.4% in one year and the current calendar year, respectively.

The last three months have been favorable for Tata Power’s share price, which has risen by 20.6%, with a notable 9.3% increase in just a month. In comparison, the Power index registered growth of 16.6% and 8.8%, respectively, during the same periods.

Tata Power closed the financial year 2022-23 with robust growth in its top and bottom lines, aided by better performance across all business clusters. The consolidated revenue rose by 32% to ₹56,033 crore compared to ₹42,576 crore in FY22. Additionally, the consolidated PAT increased by a staggering 77% to ₹3,810 crore compared to ₹2,156 crore in FY22. Furthermore, the Consolidated EBITDA grew by 23% to ₹10,068 crore compared to ₹8,192 crore in FY22.

Tata Power’s strong performance has been acknowledged by credit rating agencies. ICRA reaffirmed its positive rating on Tata Power and revised the outlook to ‘positive’ from ‘stable.’ The agency assigned a ‘[ICRA]AA (Positive)’ rating to the company’s non-convertible debentures (NCDs) worth ₹118 crore. CARE Ratings also revised the outlook for Tata Power’s NCDs to ‘positive’ from ‘stable,’ taking into account the improvement in the company’s overall leverage profile. CRISIL Ratings reaffirmed its ‘CRISIL AA/Stable’ rating to Tata Power’s non-convertible debentures and retained its ‘CRISIL AA/Stable/CRISIL A1+’ ratings on the bank facilities and existing debt instruments. India Ratings also affirmed the rating with a stable outlook for the company’s debt securities.

Tata Power’s impressive performance, positive credit ratings, and growth in the power sector have all contributed to the recent surge in share price. As the company continues to deliver strong results and maintain its position as a leader in the power industry, investors are likely to remain confident in its potential. Tata Power Company’s recent rally is a testament to its robust business fundamentals and promising future prospects. The company’s ability to outperform the market despite challenging conditions showcases its resilience and potential for growth.