Investec has initiated a coverage on five power utilities stocks. According to the firm, there is a generation shift happening which will lead to a multi-year upcycle.
Of the five stocks, they have a 'buy' rating on four of them – Tata Power, NTPC, Power Grid and CESC; and Torrent Power is a sell.
According to Investec, India is going to witness a peak deficit by FY24. While renewables will add to the capacity, however there will be a big mismatch as far as demand/supply on power is concerned.
The brokerage house also anticipates some PPAs to get signed in the coming months, and some technology and policy intervention; Discom losses will be narrowed as well.
The firm has a target price of Rs 215 on Tata Power, Rs 200 on NTPC, Rs 220 on Power Grid, Rs 115 on CESC and Rs 412 on Torrent Power (which is the only sell recommendation).
Watch the accompanying video of CNBC-TV18’s Nimesh Shah for more details.
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(Edited by : Dipikka Ghosh)