Buy Tata Power Company; target of Rs 223: Anand Rathi

Trading Calls - Equity F&O

Anand Rathi is bullish on Tata Power Company has recommended buy rating on the stock with a target price of Rs 223 in its research report dated October 06, 2021.

Broker Research

October 06, 2021 / 04:42 PM IST

HDFC Securities research report's outlook and valuations: 500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar.”” title=”HDFC Securities research report’s outlook and valuations:  “The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar.”” width=”100%” height=”auto” >

HDFC Securities research report’s outlook and valuations:  “The YTD EPS upgrades (consensus) have been led by mid-tiers such as Tata Elxis, Mindtree, Mastek, and Persistent Systems, ranging from 20-40 percent and, within tier 1, by Wipro (~15%). We expect the sector (coverage universe) to post 13 percent and 14.5 percent USD revenue/APAT CAGR over FY21-24E compared to 6.5/7.5 percent over the past five years. The mid-tier valuation premium relative to tier 1s may sustain, based on its relative outperformance (>500bps growth outperformance over FY21-24E as compared to 250bps earlier). We roll over valuations to Sepemtember-23E and increase target multiples for most of the companies in our coverage universe. We remain broadly constructive across the sector and ahead of consensus on growth/EPS; our preferred picks are Infosys, HCLT, Mphasis and Zensar.”

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Anand Rathi’s research report on Tata Power Company

The Tata Power Company Limited (Tata Power), India’s largest integrated 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.

Outlook

Also, continued de-leveraging of the Balance Sheet through sale of non-core assets are key near-term triggers for the company. Therefore, we initiate our coverage with BUY rating on the stock with a target price of Rs.223.

For all recommendations report, click here

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