Comments
Morgan Stanley
Tata Power (OW)
Target: ₹62
CMP: ₹49.40
Tata Power's asset monetisation strategy is on track. Since April 2020, TPWR has sold its stake in Cennergiand shipping business for ₹2,300 crore. Incrementally, promoters would infuse equity of ₹2,600 crore. Board has approved formation of Invit for renewables business, likely in H2, which should lead to equity release and debt de-consolidation.
Further, Tata Power targets ₹2,100 crore in sales of other non-core assets in FY21.
Tata Power has simultaneously embarked upon its new growth strategy, which includes distribution, customer-centric businesses and renewables. The over-arching theme is being asset-light incrementally.
Tata Power plans to increase share of renewables in EBITDA to 50-60 per cent by FY25 (F20:30%). In distribution, Tata Power targets increasing its consumer footprint to one crore customers in next 5 years (about 35 lakh now). Customer-centric businesses like home automation, EV charging, solar pumps, solar rooftops and microgrids are in focus.
Balance sheet repair is underway with non-core assets being monetised, promoter infusing equity and now working on a new vehicle to recycle capital, 'Renewable Invit'. Tata Power has been a complex story, but Tata Power 2.0 has a focused strategy for growth.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.