Rs 60,000 crore capex by FY27: Heavy buying in this multibagger power stock with Rs 18,700 crore order book; do you own it?

he stock gave multibagger returns of over 300 per cent in just 3 years whereas BSE Sensex Index is up by 50 per cent.

Indian stock markets closed higher today, November 28, 2023. The BSE Sensex Index rose 0.31% to 66,174.2, while the NSE Nifty-50 Index gained 0.48% to 19,889.7. Out of the total shares traded on the BSE, 1,982 advanced, 1,811 declined, and 179 remained unchanged.

Mirroring the positive market sentiment, a multibagger power stock witnessed significant buying interest today, driven by the company's recent announcement of its capital expenditure (capex) plan. This news led to an abrupt surge in the stock price.

The stock name is TATA POWER COMPANY LIMITED.

Today, one of the Top Gainers on BSE, shares of Tata Power Company Ltd gained 5.07 per cent to an intraday high of Rs 271.25 per share from its previous closing of Rs 258.15. At the closing bell, shares of the company were trading at Rs 270.75 per share, up 4.88 per cent with a spurt in volume by more than 7.30 times on BSE. The stock gave multibagger returns of over 300 per cent in just 3 years whereas BSE Sensex Index is up by 50 per cent.

Capex Plan: The company plans to invest an estimated Rs 60,000 crore in capital expenditure (capex) till FY27. This capex will be allocated towards various areas, including conventional generation, pumped hydro, renewable energy, transmission and distribution (T&D), and other projects. Approximately 45 per cent of the capex will be spent on renewable energy projects between FY24 and FY27. Additionally, out of the total capex, the company has an optional capex of Rs 12,000 crore, which is subject to TBCB wins in transmission and DISCOM circles. This investment will help the company expand its capacity and meet the growing demand for electricity.

The company is planning to start production of its first cell in Q4FY24 with a total capital expenditure (capex) of around Rs 4,000 crore. This is a significant step towards India's goal of achieving 500 GW of renewable energy (RE) capacity by 2030. The Ministry of Power has outlined a systematic plan for the development of the transmission system, which will create huge inter-transmission opportunities till 2030. Most of these projects will be bid through the TBCB route, presenting a major opportunity for private players. The company has already invested Rs 7,600 crore in capex till FY23.

Order Book: The company order book as of September 30, 2023, stands at Rs 18,200 crore and the total capacity as of June 30, 2023, stands at 4,391 MW. Out of the total order book, the Utility Scale Solar EPC order book stands at Rs 15,870 crore and the Rooftop EPC order book stands at Rs 2,872 crore.

Tata Power Company Ltd is primarily involved in the business of the generation, transmission and distribution of electricity. The company has market cap of Rs 86,500 crore.

According to the Quarterly Results, the net sales increased by 12.17 per cent to Rs 15,738.03 crore in Q2FY24 compared to Q2FY23. The company reported a turnaround in Q2FY24 with a net profit of Rs 765.89 crore compared to a net loss of Rs 284.22 crore in Q2FY23. In its annual results, the net sales increased by 28.7 per cent to Rs 55,109.08 crore and net profit skyrocketed by 186.8 per cent to Rs 610.21 crore in FY23 compared to FY22. The company has delivered good profit growth of 44.9 per cent CAGR over the last 5 years and has been maintaining a healthy dividend payout of 31.7 per cent. The company's overall performance can be attributed to its effective management strategies.

Do you own this Tata Group stock in your portfolio? Do let us know in the comments below

Disclaimer: The article is for informational purposes only and not investment advice.