Tata Power: Solar Power Play with Short-Term Headwinds

May 12

Government Tailwinds for Solar

The Indian government's PM Surya Ghar Yojana scheme presents a significant opportunity for Tata Power.

This ambitious plan aims to install rooftop solar panels in 1 crore homes, creating a massive demand for solar modules (25-30 GW).

Tata Power's Strategy to Capture the Opportunity

The company plans to capture a significant portion (5-6 GW) of this demand, translating to a potential business opportunity worth Rs. 8,350 - 10,000 crore over the next 3 years.

To achieve this, they aim to increase their market share from 13% to 20%.

They're building a solar cell and module manufacturing unit in Tamil Nadu to meet the expected surge in demand.

Leveraging their existing network, Tata Power also plans to double its channel partners to ensure wider distribution.

Short-Term Headwinds

Despite the long-term opportunity, Tata Power's recent Q4 results missed analyst expectations.
This might lead to a temporary dip in the stock price.

Potential Buying Opportunity

A "buy on dip" strategy with a 2-3 year holding period could be considered.

The current support level is around Rs. 395-400. A break below this could see the next entry point at Rs. 380.

Important Disclaimer

This is not financial advice. Please do your own research before making any investment decisions. Consider consulting a financial advisor for personalized recommendations.