Shares of Tata group firm Tata Power Company Ltd will be in focus in Wednesday's (November 8) trade as the company will post its second-quarter results later today. The scrip settled 0.18% higher at ₹250 apiece on the NSE on Tuesday.

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Domestic brokerage house Kotak Institutional Equities expects Tata Power's adjusted profit after tax to rise 35.80% year-on-year (YoY) at ₹1,112.40 crore for the July to September quarter. Kotak said sales for the quarter under review may increase 6.6% YoY to ₹15,100 crore.

According to JM Financial, net profit is expected to improve 13% YoY to ₹928.30 crore on the back of reduction in AT&C losses in Odisha circle and lower losses from Mundra plant.

Net sales for the second quarter may improve 15% to ₹16,096.80 crore on account of the Mundra plant being operational under Section-11, as well as higher generation from renewables portfolio, the brokerage said.

Tata Power shares in focus

The Tata Group stock has clocked decent gains of 23% in the last six months. However, Tata Power shares have seen limited gains of 8% in the last one year.

In terms of technicals, the 14-day relative strength index (RSI) of the stock stood at 52.9, signaling the stock is neither overbought nor oversold. Tata Power shares have a one-year beta of 1.1, indicating high volatility during the same period.

Shares of Tata Power are trading higher than the 5 day, 10 day, 20 day, 100 day, 150 day, 200 day but lower than the 30 day and 50 day moving averages.

The Tata Group stock is among the top picks of IDBI Capital with a target price of ₹339, indicating a further upside of 35.6% from the current market levels.

IDBI Capital cited strong power demand behind its bullish stance. The likely upside is also supported by CGPL Mundra plant of the company turning profitable, as per the brokerage. "In Mundra, losses are restricted due to cost pass-through benefits under Section-11 and thus need to watch for signing of long-term power purchase agreement. And this will resolve long pending concern for Tata Power."

First Published:Nov 8, 2023 9:10 AM IST