InvestorQ : What is your outlook for the Tata Power stock over next one year?
diksha shah made post

What is your outlook for the Tata Power stock over next one year?

Moii Chavate answered.
12 months ago

There is not much in it for the short term but a lot of structural changes are happening Tata Power in the long run. You may be aware that Tata Power, the power unit of the Tata Group, has been facing value implosion for a long time now the traditional power generation business franchise of the Tata group has come under a severe cloud.

However, the structure could be changing drastically as Chandrasekharan is driving the massive change in the group strategy. In the new business model approved by the Tata Group, Tata Power will focus on renewable energy and distribution of power and reduce its focus on power production, the old thermal way.

Thermal power has been bad business for a number of reasons. Apart from erratic supply of coal, traditional power companies are also suffering due to volatile PPAs signed by state governments. Going ahead, Tata Power will also focus on deleveraging its balance sheet substantially to reduce the financial risk. This will be the key to value creation. Don’t expect great fireworks in the short run. It could be a good stock over the next 1-2 years.