Buy Tata Power; target of Rs 509: Motilal Oswal

Motilal Oswal's research report on Tata Power

We attended Tata Power’s analyst meet, where the company showcased its 4.3GW cell and module manufacturing facility at Tirunelveli in Tamil Nadu. The event was also attended by senior management from the company. Our key takeaways: 1) management showcased its vision to double EBITDA and PAT (before minority) to INR300b and INR100b by FY30, respectively; 2) by FY30, TPWR expects the share of renewables in PAT to rise to ~50% (FY24: 21%), while the share of conventional generation and coal, which now account for ~44% of PAT, will decline to ~11%; 3) capex is estimated to rise to INR1,460b in the next five years, ~3x the capex over the last five years.

Outlook

We reiterate our BUY rating on the stock with an SoTP-based TP of INR509.

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