Tata Power vs. Adani Power: Outlook 2024, technicals, share price objectives, Which Should You Pick?

Tata Power vs. Adani Power: Outlook, technicals, share price objectives for 2024.

Comparing the movement of Tata Power stock against Adani Power shares over a one-year period reveals that both companies have significant volatility, with beta values of 1.5 and 1.6, respectively.

Over a span of two to ten years, investors in the power companies Tata Power Company and Adani Power have seen multibagger returns on their investment. In the last three, five, and 10 years, the stock of Adani Power has increased by 527%, 922%, and 1,393%, respectively. In contrast, the Tata Power stock’s gain has been muted. Over the course of two, three, five, and 10 years, Tata Power’s shares increased by 112%, 140%, 654%, and 456%, respectively.

With betas of 1.5 and 1.6, respectively, Tata Power and Adani Power shares are both highly volatile equities when it comes to one-year fluctuation.

TATA POWER: Tata Power’s share price decreased 1.01% during the current session to Rs 460.80 from the previous close of Rs 465.50. On the BSE, Tata Power’s market capitalization dropped to Rs 1.47 lakh crore. 3.91 lakh of the company’s shares were exchanged, for a total turnover of Rs 18.07 crore. On October 26, 2023, shares of Tata Power stock dropped to a 52-week low of Rs 230.75.

The stock of the power industry increased 82% in a year and 39.51% in 2024.

Technically speaking, the Tata Power stock’s relative strength index (RSI) is 56.2, indicating that it is not trading in the overbought nor oversold range. In comparison to the 5 day, 20 day, 50 day, 100 day, and 200 day moving averages, Tata Power shares are now trading higher..

Price Goals and Prospects

Tata Power has a target price of Rs 560, according to brokerage Nomura India. The Tata Group company’s outlook is still positive as it strives to generate a sizable EBITDA CAGR between FY24 and FY27.

According to the brokerage, Tata Power’s EPC division is expected to perform strongly due to an expanding order book. The order book is currently valued at Rs 15,700 crore. The power industry company may also be seen expanding its newly operational 4.3GW cell-to-module plant. According to Nomura India, Tata Power can experience a significant increase in profitability from the Odisha DISCOM business.

Global brokerage Morgan Stanley increased its position on the Tata Group company to overweight at the end of September. Additionally, the price objective was increased by 23%, from Rs 337 to Rs 577.

According to Morgan Stanley, Tata Power’s substantial merchant capacity, consistent growth in its core business, acceleration of development in renewable energy, and lean balance sheet make it a unique player in the present cycle. “The renewable energy platform could see growth surprises, driven by rising distribution of RPO obligations and an evolving C&I market,” it stated.

The firm was first covered by Motilal Oswal, which ranked it as a top choice in the Indian power industry. The firm assigned a ‘buy’ rating and a target price of Rs 530.

Tata Power’s scalability and diverse businesses were emphasized by the brokerage as important development drivers. As part of a multi-year business transition, the firm intends to invest 45% of its capital expenditures in renewable energy projects between the fiscal years 2023 and 2027.

The paper projects that throughout the same period, this strategic adjustment will raise the percentage of core earnings from 40% to 90%.

Motilal Oswal estimated that there would be an investment opportunity of Rs 40 lakh crore over the next ten years in the Indian electricity sector, and it also covered larger trends in the sector in its research. This potential entails firm capital expenditure of Rs 34 lakh crore and optionality expenditure of Rs 8 lakh crore, whereby 86%, 10%, and 4% of the investment will go toward generation, transmission, and smart metering, respectively.

ADANI POWER: The Adani Group stock was trading flat during the current session at Rs 642, down from the previous close on the BSE of Rs 645. Adani Power’s market value dropped to Rs 2.47 lakh crore. A total of 0.62 lakh of the company’s shares were traded, generating a BSE turnover of Rs 4.01 crore.

Technically speaking, the Adani Group stock is not trading in either an overbought or an oversold area, which is shown by Adani Power’s relative strength index (RSI), which is 46.7.

The Adani Power stock is in a downtrend as it is trading below the 10 day, 20 day, 30 day, 50 day, 100 day, and 150 day moving averages, but above the 5 and 200 day moving averages. The stock of Adani Power has increased by 82.52% in a year and by 21.58% in 2024.

Prospects and Price Objectives

Ameya Ranadive, CMT CFTe, Senior Technical Analyst at StoxBox, stated: “Adani Power is a ‘buy on dips’ option as it has demonstrated resilience in the Rs 620-600 support level. The stock is still above its 200-day moving average (EMA), a critical support level, even if it is below its important moving averages, which include the 20, 50, and 100 DEMAs. Technical signs point to the possibility of a rise by Adani Power towards Rs 700–725 should the current support levels hold. The stock presents an appealing risk-reward configuration for traders, with a stop-loss put just below Rs 615 to mitigate downside risk. Adani Power appears to be well-positioned for an upward move whenever market sentiment improves, based on the technical environment.”

“Recently, Adani Power broke through a key bearish trendline on the daily chart, suggesting a potential reversal in momentum from its previous downtrend,” stated Jigar S. Patel of Anand Rathi. The stock had established a double bottom pattern, a bullish reversal structure that suggests solid support and a possible change in price direction, prior to this breakout. Alongside this double bottom, there was a positive divergence in the Relative Strength Index (RSI), indicating a likely upward advance and a softening of selling pressure as the RSI rose higher while the price stayed low.

The fact that this bullish divergence happened close to a notable demand zone and prior breakout range adds to the optimism surrounding the stock. Based on these technical aspects, Adani Power appears to be well-positioned for a significant upswing. Consequently, it is advised to take a long position with an upside objective of Rs 755 in the price range of Rs 655–675. A stop-loss should be set around Rs 620 in order to minimize risk. Pay special attention to a daily closure below this level in order to exit the trade.

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Disclaimer: The above article is for educational and news purposes, this is not a buying or selling recommendation. TraderPulse recommends that users to check with certified experts before making any investment decisions.