Why Tata Power Share Price is Rising

The Indian power sector has witnessed a remarkable surge in recent month, driven primarily by the country's increasing energy demands and the impact of unprecedented summer temperatures.

As India grappled with soaring temperatures, sectors like air conditioning, and power generation experienced significant growth. The demand for cold beverages, or refreshment products, skyrocketed as people sought relief from the heat.

Other sectors like agriculture, construction, tourism, and retail were also impacted, each with its own set of challenges and opportunities. Amid this dynamic landscape, the power sector emerged as a strong performer, benefiting from the rising consumption of electricity.

Among the power sector giants, Tata Power is particularly noteworthy. In the last six months it is up 10.3%. With a strong reputation and a track record of delivering consistent performance, the company is in the spotlight again.

Over the past five days, Tata Power share price has exhibited growth, rallying by 3.8%.

Let's delve into the recent developments that have contributed to this upward trajectory.

Solar Cell Production

Tata Power share price rose after it began production of solar cells at its new 4.3 GW facility in Tirunelveli, Tamil Nadu, India's largest single-location solar cell and module manufacturing plant.

This strategic move strengthens Tata Power's position in the renewable energy sector, as the advanced TOPCon and Mono Perc technology used in the plant is expected to boost solar cell efficiency.

With an initial 2 GW capacity, the facility will double production within a few weeks, enhancing the supply of high-quality, domestically-produced solar components. Tata Power's Rs 43 billion (bn) investment in this facility not only supports India's net-zero goals but also reduces reliance on imports, boosting investor confidence.

The company's long-standing presence in the solar market, including its existing world-class manufacturing facility in Bengaluru, adds to its capacity to scale up production. The solar cells and modules produced will first cater to Tata Power's ongoing projects, ensuring a steady internal supply chain.

It's gaining market share in both utility-scale and rooftop solar segments. There is also the likelihood of its solar products being included in the government's approved list of models and manufacturers (ALMM).

What Next?

Tata Power's future looks promising as it continues to focus on expanding its renewable energy portfolio. The company is aiming to increase its clean energy capacity to 70% by 2030, a strategic move in line with India's growing focus on sustainable energy solutions.

The company's latest milestone is its 4.3 GW solar cell and module plant in Tamil Nadu, the largest of its kind in India.

With an additional 2 GW of capacity set to be commissioned in the coming months, Tata Power is well-positioned to meet the rising demand for solar energy and domestically produced components.

Tata Power's investments are not limited to solar energy alone. The company has also secured a 600 MW hydroelectric project in Bhutan, where power generated will be sold to India during summer months.

This diversification into hydroelectric power enhances Tata Power's portfolio and supports its strategy of building a balanced mix of renewable energy sources. The Rs 6.9 bn investment in the Bhutan project reflects the company's long-term vision for international expansion and partnerships in the renewable sector.

In terms of its financial strategy, Tata Power is executing a capex plan of Rs 200 bn for this financial year, with the majority of it focused on renewable energy projects.

This includes investments in rooftop solar systems, utility-scale projects, and third-party engineering, procurement, and construction (EPC) ventures.

Tata Power is also expanding its transmission and distribution network, with multiple projects set to come online by FY26. The company's acquisition and turnaround of stressed transmission assets demonstrate its ability to execute complex projects while maintaining financial discipline.

The company is also exploring new avenues such as pumped hydro storage and modular reactors, both of which will play a crucial role in stabilising renewable energy generation as India scales up its solar and wind capacities.

How Tata Power Share Price has Performed Recently

In the past five days, Tata Power share price has rallied 3.6%. In the last month, it is up 4.4%.

In 2024, so far its share price has rallied 32.1% and has surged 60.5% in the last year.

The stock touched its 52-week high of Rs 470.9 on 2 August 2024 and a 52-week low of Rs 230.8 on 23 October 2023.

About Tata Power

Tata Power is primarily involved in the business of power generation, transmission and distribution.

In the first half of the financial year 2024, the company generated 54% of revenue from distribution, 32% from thermal, coal and hydro segment, 14% from transmission.

For more details about the company, you can have a look at the Tata Power fact sheet and quarterly results on our website.

You can also compare the company with its peers.

Tata Power vs Adani Power

Tata Power vs NTPC

Tata Power vs Power Grid

Tata Power vs Reliance Power

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Happy investing!

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