Are you considering investing in Tata Power? This company is crucial in India’s energy market known for its diverse power generation and renewable energy operations. Tata Power is involved in developing new technology and preserving existing ones to improve its green energy potential, and investors want to see the company’s performance and prospects.
In this article, we will do an analysis of Tata Power to help you make an informed investment decision.
Financial Performance Overview
In FY24, the company’s revenues increased by 10% to ₹61,542 crore. In fiscal year 2024, the profit after tax (PAT) reached a record high of ₹4,280 crore. The company’s primary operations, including electricity and renewables, have grown steadily over the last 18 quarters because the corporation keeps making money.
Tata Power reported a notable improvement in key measures in 2024, indicating strong financial success. The company’s net sales increased 11.21% year over year to ₹5,774.12 crore.
Nonetheless, a decline in the dividend payment ratio would worry some investors. All things considered, Tata Power is still a suitable option to invest in the power industry, with a market valuation of over ₹133,549 crore and a steady emphasis on expansion and green energy projects.
Current Market Position of Tata Power Stock
Tata Power stock prices closed at ₹408+ in August. It has a 52-week low and 52-week high range of ₹228 and ₹471. The stock is trading near its 52-week high.
Over the years, the stock price has increased significantly as shown in the below Tata power share price chart from TradingView.
The P/E ratio of the company is approximately 62 because the P/E ratio compares prices to income. A high price-to-earnings ratio indicates investors predict rapid growth, which utilizes price-to-earnings rates to predict stock performance.
Should You Invest in Tata Power?
Let’s see if investing in Tata Power is a suitable option.
Return on Equity (ROE)
The Return on Equity (ROE) for Tata Power as of August 2024 is 11.3%. This figure means that for every ₹100 in stock that shareholders have contributed, the company has made a profit of ₹11.30. The ROE has demonstrated a stable trend over the last three years, demonstrating the company’s capacity to efficiently use shareholders’ capital to produce profits.
Return on Assets (ROA)
Tata Power’s return on assets (ROA) is 4.41%, which demonstrates how well the company uses its assets to generate profits. In the capital-intensive power generating sector, the company’s superior operational efficiency and asset management are highlighted by this steady statistic.
Current Ratio
The TataPower Current Ratio increased by 0.462 percent in comparison to the previous financial year. At 0.876, the current ratio reached its highest point on March 24 in the previous five years. In the previous five years, the current ratio’s lowest value was recorded on March 20th, at 0.436.
Growth Potential
Tata Power stock is working hard to add additional green energy sources to its portfolio to attain its 2027 fiscal year objective of 15 gigawatts (GW) of clean energy. The company promises to boost green energy production, which might keep it ahead in the market or attract green investors.
Before investing, you should also consider the impact of severe regulations and norms governing the energy industry. Government policies, environmental regulations, or taxation might affect Tata Power’s operations and revenues, worrying investors.
Conclusion
Tata Power company has consistently generated consistent revenue, increased its usage of renewable energy, and boosted its sales in recent years. Before investing in Tata Power, investors should examine their risk tolerance and financial goals because investors must consider their investing goals. Comprehensive economic and financial measure research is needed to track the company’s progress and industry developments.
