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Anand Rathi
Tata Power (Buy)
Target: ₹223
CMP: ₹175.9
Tata Power Company has a presence across the power value chain viz. generation of renewable as well as conventional power including hydro and thermal energy; transmission and distribution; and trading.
In line with the company’s view on sustainable and clean energy development, Tata Power is steering the transformation of traditional utilities to providers of integrated solutions by initiating new business models in EV charging, solar pumps and rooftops, microgrids, home automation and smart meters.
As on March 31, the Tata Power group of companies has a generation capacity of 12,808 MW based on various fuel sources — thermal (coal, gas and oil), hydroelectric power, renewable energy (wind and solar PV) and waste heat recovery. The company is the leader in rooftop solar installations and solar water pumps, and has a dominant position in the growing EV charging stations market in India.
The net debt of the company saw a steady decline. Working capital management has helped keep net debt in check. Also, continued de-leveraging of the balance sheet through the sale of non-core assets are key near-term triggers for the company. Therefore, we initiate our coverage with Buy rating with a target price of ₹223.
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