2 Power Sector Stocks That Can Rally After Budget 2023, Brokerages Recommend Buy For Gain

2 leading power sector stocks are expected to offer higher returns to shareholders after key announcements made in budget 2023 as the focus is expected to shift to growth in renewables and energy transition. More clarity can be expected on incentives for coal gasification and hydrogen missions.

The stocks are NTPC Ltd and Tata Power Company Ltd. Bob Capital has assigned buy call to NTPC Ltd and ICICI Securities has given buy rating to Tata Power. Check key takeaways below:

1. Buy NTPC Ltd

The maharatna status company declared strong standalone Q3FY23 revenue growth of 43% YoY to Rs 414bn (Rs 397bn including regulated income). Leading brokerage firm, Bob Capital, in its January 30, 2023 report, assigned buy call to NTPC Ltd with a target price of Rs 210 apiece.

If you buy NTPC Ltd now, you will get potential return of 27%. The current market price of the stock is Rs 166.25 apiece with an intraday dip of 2.21%. The stock's 52-week high is Rs 182.80 apiece and 52-week low is Rs 123.70 apiece, respectively.

The large cap power sector stock offered 4% return in last 6-months, 17% in last 1-year, and 51% in last 3-years.

According to Bob Capital, "NTPC remains our top pick in the utility space as the best transition play from the regulated (bulk thermal power) business to the green energy business. The stock is currently trading at 1x FY25E P/B. We maintain BUY with an unchanged SOTP-based TP of Rs 210, implying an FY25E P/B of 1.25x, based on improving ROE and transition to cleaner energy. 60."

2. Buy Tata Power Company Ltd

The current market price of Tata Power Company Ltd is Rs 206.30 apiece with an intraday gain of 0.22%. ICICI Securities, in its October 31, 2022, has assigned buy rating to Tata Power with a target price of Rs 262 apiece. If you buy Tata Power Company Ltd stock now, you will get a likely return of 27%.

The stock's 52-week high is Rs 298.00 apiece and 52-week low is Rs 190.00 apiece. The company has a market capitalisation of Rs 65,839.97 crore.

The stock declined 17% in last 1-year and offered a return of 272% in last 3-years. In last 5-year, the stock witnessed a surge in value of its shares at 142%. In last 1-week, the stock rallied over 2%.

According to ICICI Securities, "We revise our estimates for FY23 and FY24 factoring-in the higher coal prices and earnings on sale of power from Mundra plant under section-11 of the Electricity Act."

 

Disclaimer

The stocks have been picked from the brokerage report of ICICI Securities and Bob Capital. Greynium Information Technologies, the Author, and the respective Brokerage Houses are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.