Home / Business and Economy / Tata Power's Rs 455 Target: Key Gujarat Deal Drives Upside
Tata Power's Rs 455 Target: Key Gujarat Deal Drives Upside
24 Mar
Summary
- Motilal Oswal maintains BUY rating with a Rs 455 target price.
- Gujarat supplemental power pact addresses Mundra plant viability.
- Mundra plant losses could decrease by up to 75 percent.
Motilal Oswal Financial Services (MOSF) has reaffirmed its positive outlook on Tata Power, maintaining a BUY recommendation with a target price of Rs 455. This target suggests an anticipated upside of 17.6 percent for the company's stock.
A crucial development highlighted by MOSF is the finalization of a Supplemental Power Purchase Agreement (SPPA) with Gujarat. This agreement is viewed as a major positive, directly addressing and resolving long-standing viability challenges associated with Tata Power's Mundra plant.
If similar agreements are successfully implemented across other states, the financial impact on the Mundra plant could be substantial. The brokerage estimates that losses at the Mundra facility could be reduced by as much as 75 percent from their current annual figure of Rs 17-18 billion.
