On July 7, all-India peak power demand crossed the milestone of 200GW as lockdowns eased, the weather became hotter, agricultural demand rose and state discoms made more power available due to low cost of electricity on the power exchanges.
Projections showed the thirst for power is likely to grow as aspirations of the new India soar. And a Tata venture, already in a dominant position in this business, is waiting to ride that boom and reap the rewards.
Tata Power is among the largest players in high-growth areas of power distribution, solar EPC and solar rooftops. The company is also engaged in power generation with some 12,808 MW capacity and has plans to expand its renewable portfolio.
Analysts say the company’s future growth will largely be driven by clean energy initiatives like renewable energy and power distribution, which can also improve its ESG score. Besides venturing into emerging green technologies can also aid the growth.
“The company’s growth focus is rooted in solar/wind generation capacity, regulated power transmission/distribution and new ESG-positive businesses such as charging of electric vehicles, solar micro grids, rooftop solar and solar EPC. Regulated businesses in particular provide steady earnings and cash flow,” said Deepika Mundra of JPMorgan.
All these factors have helped turn the company’s stock into a multibagger, having generated over four-fold returns in 14 months by taking a leap of faith to Rs 123 from Rs 28 in May last year.