Tata Power’s rich valuations call for a reality check
The steep rally in the stock warrants caution. Investors are baking in significantly higher valuation for the renewable energy subsidiary and continuing benefits from high coal prices
November 25, 2021 / 08:57 AM IST
The year 2021 is proving to be a very exciting one for Tata Power Co’s investors. The stock has gained 214 percent or 3 times in the year so far. The company has realigned its portfolio to focus on green energy, initiated steps to monetise its renewable energy assets, and the spurt in coal prices is offsetting losses at its Mundra power plant. But the question is whether its valuations have discounted all this and more.
Tata Power has plans to monetise its renewable energy assets by the end of the current fiscal year (Q4 FY22), although no firm timelines have been given. Recently, the Economic Times reported that a large asset management company is looking...