Citigroup 'Neutral' on Tata Power

Citigroup recommend ‘Neutral’ rating on Tata Power with a target price of Rs 111. Tata Power has declared CoD of unit 1 800MW on March 9, 2012.

However, the unit has taken a scheduled outage for 10-15 days, due to which impact on 4QFY12 numbers will be marginal. Current tariff is Rs 2.35/kwh given high coal prices and plant needs Rs 2.93/kWh to break even at the PBT level.

The target price is based on Tata Power's various investments such as a 51% stake in NDPL, Powerlinks, holdings in Tata Teleservices (Maha) and VSNL.