Big Crash coming in Tata Power stock? Analysts on support, stop loss and price targets
Big Crash coming in Tata Power stock? Analysts on support, stop loss and price targets
Shares of Tata Power Company have come under pressure after the Tata Group firm reported its March quarter and FY24 earnings on May 8. The multibagger stock has lost 7.43% in two sessions after March quarter earnings. Tata Power shares picked pace since October end in 2023. With bulls riding the stock, it breached the record high of Rs 298 reached on April 7, 2022 last year. The stock touched a fresh record high of Rs 298.60 on December 6, 2023.
Tata Power shares clocked a series of record highs in December 2023, clocking gain of 24% during the month. In fact, the stellar gains in December are reflected in the six-month return of 64.14% generated by the Tata Group stock. The large cap stock crossed the Rs 300 mark for the first time in December.
Continuing its momentum, the stock touched a record high of Rs 464.30 on May 3 this year. However, weak sentiment in the stock has dragged the stock below the Rs 425 level after Q4 earnings.
Tata Power clocked a 15% year-on-year (YoY) rise in its consolidated net profit to Rs 895 crore in the fourth quarter compared with Rs 778 crore in the last year quarter. Revenue from operations climbed 27% YoY to Rs 15,846 crore.
CLSA and Kotak Equities have retained ‘sell’ calls on the power sector stock.
CLSA said that the weak Q4 earnings were led by weak profitability on the renewable energy front. CLSA has a price target of Rs 297 per share, a downside of around 32 percent.
Kotak has assigned a lower price target of Rs 265 implied that the fair value of the stock was around 40 percent lower from current levels.
International brokerage Goldman Sachs sees a downside of 45% in the Tata Power stock assigning a price target of Rs 240 on the stock.
The negative stance by brokerages shows the stock might be in for a major correction in the future.
Here’s a look at what analysts said on the prospects of the Tata Power stock.
Vaishali Parekh, VP – Technical Research, Prabhudas Lilladher said, “Tata Power is presently finding support at its 50-day moving averages. A breach of the Rs 400 mark could catalyze a deeper decline towards the Rs 380 level. Therefore, considering Rs 380 as a robust support level presents a favorable opportunity for purchase.”
Gaurav Bissa, VP, InCred Equities said, “Tata Power has been in a strong uptrend on the daily as well as the weekly charts with consistent formation of higher highs and higher lows. It is trading in a rising channel support on the daily charts. However, the RSI has been trading in a falling channel pattern during this while. This resulted in a meaningful correction in the stock from Rs 460 levels. Going forward, Rs 400 level is likely to act as support area which if sustained can push the prices back above Rs 460 levels.”
Abhijeet from Tips2trades said, “Tata Power stock price is bearish on the daily charts with strong resistance at Rs 431.25. A daily close below support of Rs 408 could lead to a fall till Rs 384 in the near term.”
Riyank Arora Technical Analyst at Mehta Equities said, “The stock has broken down below its immediate support level of Rs 417.00 on its daily timeframe charts. With the RSI (14) around 42, the overall momentum appears weak, and with negative price action, the stock might head towards even lower levels of Rs 400 and Rs 380. A strict stop-loss should be placed at Rs 435 to manage risk effectively on short positions. Overall, the technical structure looks weak for the stock.”
Watch Live TV in English
Watch Live TV in Hindi