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Tata Power is on the cusp of mega transformation, says Edelweiss Equities Swarnim Maheshwari

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Tata Power is on the cusp of mega transformation, says Edelweiss Equities Swarnim Maheshwari

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Tata Power is on the cusp of a mega transformation, said Swarnim Maheshwari, Edelweiss Institutional Equities on Thursday, while adding the company is getting rid of legacy issue of debt and others.

Tata Power is on the cusp of a mega transformation, said Swarnim Maheshwari, Edelweiss Institutional Equities on Thursday, while adding the company is getting rid of legacy issue of debt and others.
“We believe that it is on the cusp of a mega transformation. It is getting rid of its legacy issues with deleveraging and the restructuring and the on the other hand it is realigning its business model to the new environmental, social, governance (ESG) focussed areas which are both niche and scalable,” he said in an interview with CNBC-TV18.
Tata Power is entering into sunrise businesses which are high on ROCEs (ROCE is return on capital employed), Maheshwari said.
“We label these new businesses of Tata Power as ‘sunrise’ business. They are high on ROCE so it should contribute incrementally towards the Tata Power’s ROCE also and it should also start contributing meaningfully towards their profit after tax (PAT) also.”
The mega transformation of the power industry towards the renewables, he said.
“We are trying to convey in our latest report is the mega transformation of the power industry towards the renewables, which is not only gravitating towards the utility scale renewable projects but also towards these smaller size products. There is a change in the external factor. There is lower interest rate regime, technological advancement because of which the economics of the renewable power is getting much more attention and adoption. Then on top of this we have the government’s special focus on this sector. All these factors are leading to faster acceleration towards the renewable energy as against earlier than expected.”
“The companies are realigning their business model towards the renewable energy and which should help towards improving your ESG rating,” he said.
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