INSUBCONTINENT EXCLUSIVE:
Tthe government has undertaken initiatives to curb the generation of coal-based energy.India is the third-largest producer of electricity in
The country boasts of an installed power capacity of 382.7 GW (gigawatt), as of April 2021.However, despite significant increase in the
generated in India, comes from the use of coal i.e., thermal-based energy
This means that thermal-based power plants command a large share of power generation.Thermal energy is coal-based, i.e., dirty energy
undertaken initiatives to curb the generation of coal-based energy and ramp up the production of clean energy via renewable sources such as
solar energy, wind energy etc.With India transitioning to green energy, capacity addition from clean energy sources is likely to outstrip
energy sources, Tata Power is equipping itself every step of the way
Procurement, and Construction) segmentTata Power's mix on the power generation side is 60% thermal and 30% renewable
It generates renewable as well as conventional power including hydro and thermal energy
generation capacity from solar, wind, hydro, and waste heat recovery accounting for 32% of the overall portfolio, the company is committed
the revenue and 34% of the operating profits (EBITDA-earnings before interest, tax and depreciation), whereas clean energy while only 9% of
9% of the total revenues and 3% of the company's operating profit come from this segment.The company has been proactively growing its
With the regulatory push towards cleaner energy in every sector, anyone looking to develop Solar parks will prefer working with Tata Power
It also has a healthy order book.With the solar EPC, sector projected to grow by 10x over the next 5 years, this segment can become a large
source of revenue for the company.Another big push for the solar EPC business can come from oil companies looking to diversify into clean
And so, cash-rich oil tycoons looking to maintain their wealth want to diversify into clean energy
A well-established player with a strong brand name, Tata Power stands to benefit from this opportunity.Moreover, its presence across the
energy value chain can help it achieve operational efficiency, making Tata Power a truly well-diversified power company.The Indian EV market
is set to soar.Tata Power leads the pack with 1299 charging stations under its umbrella
Despite the first-mover advantage, they can leverage the trusted Tata brand name
Considering EV is a relatively new concept when it comes to after-sales service, users will prefer the trusted TATA brand name
With a lineage of impeccable service across all its brands, a business or household knows a company from the house of Tatas will not
But is that possible? Let's find out.India's vehicle population is all set for a dramatic surge, poised to rise from the existing 160 m
units to over 550 m by 2030
This increased dependency on oil raises environmental concerns, steering us towards cleaner transportation and electrification.Battery and
road-passenger-based energy demand and 37% of carbon emissions in 2030 with a shared and electric mobility future.The Indian government has
also announced some incentives
country by 2026.Now that is a big number
Much like our fuel stations, you need to place them at strategic locations, like retail malls, business hubs, highways, and
company has tied up with Macrotech Developers (Lodha), Apollo Tyres, TVS Motor Company, Tata Motors, and MG Motors India.It also has
Other than the trusted brand name, the company can benefit from a synergy with other group companies such as Tata Motors and Tata
Chemicals.Why has the stock shot up?Trading at a price-to-book value (P/BV) of 3.4x, a number higher than the past five years average P/BV
of 1.2x, the stock of Tata Power has doubled in the past year
While some short-term factors contributed to this steep rise, there were other important developments:Along with the other power utilities,
couldn't get their hands on imported coal, forcing them to shut plants
days, giving them a leg up.Another short-term reason was the inclusion of Tata Power in the MSCI Index
Signifying that the company is a potentially good investment, the stock's inclusion in the MSCI index put it on the radar of international
investors.The Road AheadWhile these events were short-lived, there was one positive long-term event
The company bagged a large contract to build a 100 MW solar project for the government
This increases its chances of procuring potentially large government orders.Moreover, the expansive EV infrastructure opportunity and the
growth has been stable over the past few yars
However, the profits have been affected due to large interest payments over the same period.Nevertheless, the company has been reducing debt
The debt-equity ratio fell from 1.9x in 2017 to 1.4 in 2021
This should continue as the company continues to generate a positive cash flow.A positive cash flow means the company has money for funding
investment opportunities, prepaying debt, or paying dividends to its shareholders.If Tata Power can monetize all these opportunities, then
there is no doubt the company can become the frontrunner of the clean energy revolution.For more details on Tata Power, check out the
company's fact sheet on our website.Disclaimer: This article is for information purposes only
been edited by TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)
