Shares of Tata Power have been consolidating in the last one year. The Tata Group stock has kept investors guessing whether they should continue to hold the stock or exit the counter. Tata Power stock traded between Rs 230 (December 13, 2021) to Rs 219 (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 219 on BSE, trading in a narrow range this year.
However, the stock did see a spectacular rally in the last three years. It zoomed 305% since December 2019. In the last two years too, the stock has rallied 200% from Rs 72.8 on BSE.
The Tata Power stock has a one-year beta of 1.2%, indicating high volatility during the period. It is currently trading higher than the 5-day, 20-day, 50-day and 100-day moving averages but lower than 200-day moving averages. Tata Power has a high PE ratio of 28.17 against the industry PE of 10.46.
In the current trading session, the Tata Power stock was trading at Rs 219 on BSE. The Tata Group stock has gained after four days of consecutive fall. Tata Power stock is trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Total 6.35 lakh shares changed hands amounting to a turnover of Rs 13.91 crore on BSE. Market cap of the firm rose to Rs 69,850 crore.
In the second quarter of the current fiscal, Tata Power logged a 85 per cent rise 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. In the current trading session, the stock touched an intraday high of Rs 230.25 rising 2.72% on BSE. They opened at Rs 224 against the previous close of Rs 224.15 on BSE. Total 5.89 lakh shares of the firm changed hands amounting to a turnover of Rs 13.42 crore in the afternoon session. Market cap of the firm rose to Rs 72,949 crore on BSE.
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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.
Analysts have a mixed stance on the future prospects of the Tata Power stock. Here’s what they said.
Osho Krishan, senior analyst – Technical & Derivative Research, Angel One said, “Tata Power has been in a consolidation zone for over a year and is hovering in a broad range of Rs 30- Rs 40 odd points. On the technical parameters, the support of Rs 210-200 augurs well for the buyers, while on the higher end, the zone of 240-245 is a sturdy hurdle in the counter. The stock is expected to hover in the mentioned range, and a decisive breakthrough on either side could only dictate the next leg of rally in the counter.”
Abhijeet from Tips2trade expects the stock to hit Rs 395 in the long run but he is equally pessimistic on the stock if it closes below Rs 190 level.
“After a phenomenal rally in 2020-21, where a majority of the power sector stocks including Tata Power more than doubled in terms of stock price returns, 2022 has been comparatively subdued for majority of the power stocks, Adani Power being the exception. Rs 205-210 remains a strong support zone for Tata Power. A weekly close above Rs 250 should lead us back to Rs 295 & even a new high of Rs 395 in the long run. But a strict long-term stop loss of Rs 190 needs to be maintained as weekly close below Rs 190 could lead to Rs 155 as well,” he said.
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Amol Athawale, Deputy Vice-President – Technical Research at Kotak Securities said, “Post short-term correction, the stock has formed reversal formation on daily and intraday charts. Currently, it is witnessing non-directional activity, perhaps, traders are waiting for either side breakout. For the bulls, Rs 230 or 200-day SMA would be the important breakout level to watch. And, if it manages to close above the same, we can expect a quick uptrend rally towards Rs 250-260. On the flip side, trading below Rs 222 or 50-day SMA may increase further weakness up to Rs 215-210.”
Manoj Dalmia, founder and director, Proficient Equities said, “Tata Power has been range bound in the last few weeks. Investors won’t see much movement in the short-term. A target of Rs 247 from current levels can be expected, where it can face some resistance. A mid-term target of Rs 297 can be expected.”
