ICICI Securities maintains buy on Tata Power Company, target price Rs 87

ICICI Securities has maintained buy rating on Tata Power Company in the long term with a target price of Rs 87. The stock ended up 3.6% at Rs 67 on Friday while the Sensex closed 1921.15 points up at 38,014.62.

Company Financials

For the quarter ended 30-06-2019, the company has reported consolidated sales of Rs 7766.72 crore, up 7.42% from last quarter sales of Rs 7230.24 crore and up 6.20% from last year same quarter sales of Rs 7313.41 crore. The company has reported net profit after tax of Rs -9.90 crore in the latest quarter.


Investment Rationale

Tata Power, through its whollyowned subsidiary Khopoli Investments Ltd, announced divestment of its entire 50% stake in Cennergi (Pty), a South African JV. The brokerage expects this along with other anticipated divestments, to aid in partial repayment of non-core debt resulting in an earnings CAGR of 29% over FY20-FY21 with EBITDA of ?99 billion growing at 5% CAGR.