Edelweiss raises Tata Power target to Rs 1508
Edelweiss has revised Tata Power’s target price upwards after the company indicated that the deal with Olympus Capital to sell 15 per cent stake in the coal mine holding companies for $300 million has been terminated.
By ET Bureau |
MUMBAI: Edelweiss has revised Tata Power’s target price upwards after the company indicated that the deal with Olympus Capital to sell 15 per cent stake in the coal mine holding companies for $300 million has been terminated.
“Based on our long term average price of USD 70/ton of coal for Bumi’s coal and restating Tata Power’s stake to 30% from 25.5% we revise our SOTP at Rs 1508 / share (from Rs 1461 earlier).
We believe the stock could re-rated over the next 12-18 months due to the high international coal prices, upwards restatement of coal reserves, earnings growth due to ~5 GW of projects being commissioned, and greater clarity on the pipeline ~6GW as the management is expected to achieve financial closure for sizeable portion of the capacity,” the report said.
“Based on our long term average price of USD 70/ton of coal for Bumi’s coal and restating Tata Power’s stake to 30% from 25.5% we revise our SOTP at Rs 1508 / share (from Rs 1461 earlier).
We believe the stock could re-rated over the next 12-18 months due to the high international coal prices, upwards restatement of coal reserves, earnings growth due to ~5 GW of projects being commissioned, and greater clarity on the pipeline ~6GW as the management is expected to achieve financial closure for sizeable portion of the capacity,” the report said.
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