HSBC’s upgrade pushes Tata Power shares up by 4%

Tata Power Company Limited shares saw a strong rise in early trade on February 20, 2025, climbing nearly 4% after HSBC Limited upgraded its rating. The upgrade reflects improved execution despite tough market conditions. HSBC shifted its stance from 'reduce' to 'hold' and bumped up its price target to ₹345 per share from ₹300.

Strong market reaction

The Tata Power stock had been struggling, falling 30% from its 52-week high due to weak power demand, delays in power agreements, and slow project execution. However, this recent rally shows that investor confidence is returning.

What's driving the growth?

HSBC pointed out that Tata Power has made solid progress in module and cell manufacturing, as well as turning around its EPC (engineering, procurement, and construction) business. However, the pace of renewable energy projects still needs to pick up. The brokerage also bumped up its FY25-26 earnings per share estimates by 9-13%, which could attract investors looking to buy shares online.

Impressive financial performance

Tata Power's latest earnings report brought more good news. The company reported a 10% year-on-year rise in consolidated net profit to ₹1,188 crores for the third quarter of FY24-25, exceeding expectations. Revenue went up 3% to ₹15,793 crores, while EBITDA rose 7% to ₹3,481 crores. Strong performances in generation, transmission, distribution, and renewables powered this growth.

The company's leadership highlighted its steady profit growth over 21 quarters, crediting operational efficiencies and smart business strategies. Investors looking to buy shares online have responded positively to these strong numbers.

Future outlook

Despite this positive momentum, HSBC cautioned about challenges such as government approvals, competition, and coal supply issues. The brokerage also mentioned that there are no big positive triggers expected in the short term.

On February 20, 2025, at 12:10 PM, Tata Power's stock was trading at ₹357.25 per share. Tata Power's improving execution and financial stability make it a stock worth watching. For those looking to buy shares online, this could be a good opportunity to tap into the company's long-term potential.