Our 44th company in the Series of Best Stocks to Buy in India for Short term 2023 is Tata Power Company Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
The Tata Power Company Limited is an integrated power company engaged in generation, transmission, distribution and trading of electricity. It is also engaged in mining and trading of coal.
Now Let’s check the important fundamental figures of this company. This is a large cap company with Market Cap ₹64,657cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 37.13
Sector PE Ratio: 23.11
PE Ratio of this company is high than Sector’s PE. So it’s a Average PE than the peers of this company.
PB Ratio : 2.48
Sector PB Ratio : 3.04
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0.87%
Sector Dividend Yield : 1.83%
Dividend Yield of this company is low than Sector. Dividend of this is Below Average than the peers of this company.
ROE: 25.57%
ROCE: 10.44%
ROE (Return on equity) and ROCE (Return on capital equity) is Average.
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2022 | 46,099.00 | 1,741.46 |
| 2021 | 34,970.45 | 1,127.38 |
| 2020 | 31,438.35 | 1,017.38 |
| 2019 | 33,735.48 | 2,356.19 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2022 | 2021 | 2020 | 2019 |
| 86,521.53 | 73,405.28 | 67,775.85 | 63,601.27 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2022 ,Company have 86,521.53 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2022 | 2021 | 2020 | 2019 |
| -575.13 | 5,009.33 | 5,149.51 | 997.57 |
Debt Level: Tata Power’s net debt to equity ratio (133.5%) is considered high.
Reducing Debt: Tata Power’s debt to equity ratio has reduced from 232.6% to 160.2% over the past 5 years.
Debt Coverage: Tata Power’s debt is not well covered by operating cash flow (13%).
Interest Coverage: Tata Power’s interest payments on its debt are not well covered by EBIT (1.1x coverage).
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2022 | 46.86% | 9.64% | 4.04% | 10.59% | 28.86% |
| Mar 2022 | 46.86% | 10.29% | 4.30% | 10.21% | 28.34% |
| Dec 2021 | 46.86% | 10.10% | 3.83% | 10.87% | 28.34% |
| Sep 2021 | 46.86% | 10.82% | 4.83% | 11.05% | 28.54% |
Above table showing there is no big change in Promotor Holding which is 46.86% in June 2022. FIIs invested in June 2022 with 9.64% and retail investor is 28.86% .
Investment Checklist for Tata Power Company Ltd.
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The company is currently profitable
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Interest payments are not well covered by earnings
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Dividend of 0.86% is not well covered
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Earnings are forecast to grow by an average of 13.5% per year for the next 3 years
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Share price has been stable over the past 3 months
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The company’s earnings are high quality
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Profit margins improved or Tata Power became profitable
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They have sufficient analyst coverage
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Shareholders have not been meaningfully diluted in the past year or recently listed
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Revenue is meaningful (₹514B)
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Market cap is meaningful (₹647B)
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Tata Power does not have negative shareholders equity.
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 190 to 210
Target: 270 (40% Upside)
Time Horizon: 6-8 Months
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
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Hope you liked Our 44th company in the Series of Best stocks to buy in India for short term 2023. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
Disclaimer: This is an Educational Initiative and is NOT registered under any SEBI regulations. All the information that we provide is just for Educational purposes and you should consult your financial adviser before taking any investment decision. Also we do NOT provide any form of Stock Tips or Advise on stocks or portfolios. My All Trades Only Education Purpose. All trades will be at your risk. You have the responsibility of any trade or any benefit or loss.