Tata Power shares clock flat returns in 2022; here’s the new target price

Shares of Tata Power have delivered flat returns during 2022 and traded in consolidation zone. It has fallen 2.11% this year and risen 2.03% in a year. However, Tata Power stock clocked stellar returns for investors in the last two and three years. The power sector stock delivered 201% returns in the last two years. The stock rose from Rs 71.65 level to Rs 216 today since December 2020. Similarly, Tata Power shares zoomed 290% in three years, making them among the top performing scrips in the power sector during the period. 

However, the rising interest rate scenario along with highly volatile markets has kept investors on the sidelines of the Tata Power counter this year. Tata Power stock traded between Rs 230 (December 13, 2021) to Rs 216 (today) signaling that the stock has struggled to break out from the narrow range during the period. In 2022 too, the stock has remained in the consolidation mode.

It stood at Rs 220.90 on December 31, 2021 against today’s level of Rs 216 on BSE, trading in a narrow range this year.  

Also Read: Tata Power shares trading in consolidation zone; can they hit Rs 400 mark?

The Tata Power stock has a one-year beta of 1.24%, indicating very high volatility during the period. It is currently trading lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. Tata Power has a high PE ratio of 27.37 against the industry PE of 10.46.

In the current trading session, the Tata Power stock was trading at Rs 216 on BSE. Total 3.09 lakh shares changed hands amounting to a turnover of Rs 6.71 crore on BSE. Market cap of the firm fell to Rs 69,099 crore on BSE.

In the second quarter of the current fiscal, the Tata Group firm logged a 85 per cent rally in its consolidated net profit to Rs 935.18 crore on the back of higher revenue. Net profit of the company stood at Rs 505.66 crore in the quarter ended September 30, 2021.

Total income climbed to Rs 14,181.07 crore in Q2 from Rs 10,187.33 crore a year ago. The stock hit a 52-week high of Rs 298 on April 7, 2022 and a 52-week low of Rs 190 on June 20, 2022 on BSE. 

After a flat show in 2022,  here’s a look at what analysts said on the prospects of the stock in 2023.

Abhijeet from Tips2trade said, “After a phenomenal rally in 2020-21, where majority of the power sector stocks including Tata Power more than doubled in terms of stock price returns, 2022 has been comparatively subdued due to rising interest rate scenario leading to a much-needed consolidation in terms of the stock price movement. A weekly close above 253 should lead us back to 295 & even a new high of 395 in the long run. 203 remains a strong weekly support. A weekly close below 203 could lead to 155 as well.”

Also Read: Tata Power is evolving into a power solutions provider. What exactly does that mean?

Manoj Dalmia, Founder & Director at Proficient Equities said, “Tata Power is currently trading at a price-to-book ratio of 3.4 and a price-to-earnings multiple of 27.14. A higher P/E ratio indicates that investors are prepared to pay more for each rupee of profits provided by the stock due to superior prospects for future growth. For the quarter that ended on September 30, 2022, the company recorded consolidated net sales of Rs 14181.07 crore, a 3.13 per cent decrease from the previous quarter’s Rs 14,638.78 crore. Long-term view is bullish and investors can accumulate at current levels as it can gain some momentum in the coming months.”