Tata Power gains as arm signs MoU with Gujarat for renewable energy projects

Shares of Tata Power gained a percent in the early trade on January 12 after subsidiary Tata Power Renewable Energy signed a memorandum of  understanding with the Gujarat government to develop 10,000 MW of renewable energy power projects.

“The signing ceremony took place at the Vibrant Gujarat event earlier today in the presence of key representatives from both, the Government of Gujarat and TPREL,” Tata Power said in an exchange filing on January 11. The projects will be developed across multiple sites in the state.

At of 9.18 am, Tata Power was trading at Rs 358.15 on the National Stock Exchange, up 0.24 percent from the previous close.

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The 10,000 MW renewable energy power projects comprising solar, wind, hybrid, RTC, peak, and Firm and Dispatchable Renewable Energy (FDRE), covering an extensive 50,000 acres of encumbrance-free Government land.

This collaboration will support achieving the ambitious goal of generating 50 percent of power from renewable sources by 2030. The projects have a total investment potential of Rs 70,000 crore, potentially generating employment for over 3,000 people, the company said

Analysts at Antique Broking maintained the “buy” call on the counter, raising the target price to Rs 450 from Rs 422, implying an upside of 29 percent. Analysts believe that Tata Power will outperform the sector and its consolidated return on equity (RE) can deliver Rs 10,000 crore EBITDA by FY27.

“Tata Power houses 4.3 gigawatt (GW) of operational solar, wind, and hybrid assets. The company plans to add 10 GW before FY27. This will entail a capex of Rs 60,000 crore. Note, 14 GW can contribute Rs 8,400 crore in EBITDA. Add solar EPC, rooftop, and EV charging stations, the consolidated RE can easily march past Rs 10,000 crore,” an analyst said.

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