Tata Power To Voltas: 3 Tata Group Stocks Recommended To Buy, Hold; Up To 19% Upside Seen

Three Tata Group-backed stocks from diverse segments is recommended to buy or hold by Antique Stock Broking. These are Tata Power, Voltas, and Rallis India. Tata Power is recommended to buy for fetching potential gains of at least 19% ahead. While Voltas and Rallis are recommended to hold for single-digit gains. All the three companies have declared their Q3 results.

While Tata Power is Tatas power generating giant, Rallis is an agro-chemical player, and that of Voltas is an electric stock engaged in home appliances products.

Tata Power: (TP: Rs 450, CMP: Rs 378.30: Potential Upside: 18.95%)

Antique's note said, "We maintain our TP to INR 450 and reiterate BUY. We have not factored in the growth of regulated equity, where the company is exploring all possibilities. We have added the scope for potential windfall gains from spot market sales from CGPL, assuming PPA negotiations fail or the company signs a supplementary PPA with Maharashtra and Gujarat to sell the residual 30% exposed to Punjab, Haryana, and Rajasthan. Risks: Sharp slowdown in RE addition, continuation of section 11 at FC of INR 0.9/unit and company's unwillingness to explore spot market."

Tata Power, together with its subsidiaries & joint entities, has a generation capacity of 14,294 MW of which 38% comes from clean energy sources. The company has the distinction of being among the top private players in each sector of the value chain, including solar rooftop and value-added services

Tata Power is aiming for 30 GW RTC power through PSP projects. There is a rising trend of RE hybrid with storage tenders. PSPs are established or proven models, costing less than Liion batteries.

Rallis India: (TP: Rs 260, CMP: Rs 244.10, Potential Upside: 6.51%)

Considering the decent traction received by new product launches, coupled with the expected steady scale-up of the CSM business, Antique'e note said, "we raise our target multiple from 15x to 18x. However, the recent run-up in stock price provides limited upside, thus, we maintain HOLD with a TP of INR 260 as we base the valuation on a PE of 18x FY26E EPS."

Rallis India (RALI), a Tata Group company, is an established agrochemical player in India. The company is well placed to capture emerging opportunities in the domestic agrochemical market on the back of healthy distribution network, branded farm solutions, and launch of new products.

The current market share of Rallis is 5% and is looking to take it up to high single-digit in the next five years through product innovation and distribution network.

Voltas: (TP: Rs 1,112, CMP: Rs 1,095.10, Potential Upside: 1.54%)

Further, in its note, Antique said, "We believe earnings for Voltas would remain volatile in the near term given the uncertainty around additional losses arising from the international EMP project business. We like the RAC under penetration theme from a long-term view and believe that Voltas would be one of the key beneficiaries of the same. However, given premium valuations, we maintain HOLD rating with a SoTP TP of INR 1,112."

Voltas is engaged in the business of air conditioning, refrigeration, electro-mechanical projects as an EPC contractor both in the domestic and international geographies (Middle East and Singapore); engineering product services for mining, water management and treatment, construction equipment for the textile industry.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.