Buzzing Stocks Analysis: Motilal Oswal's Buy Ratings for Power Grid and Tata Power

Investment Landscape in Power Stocks

Motilal Oswal initiated coverage on the Indian power sector, issuing 'buy' ratings for Power Grid, JSW Energy, and Tata Power, with target prices of Rs 425, Rs 917, and Rs 530 per share, respectively.

Analysts project a substantial investment opportunity of over Rs 40 lakh crore in the sector, driven by rising demand, modernization of outdated infrastructure, and transition to cleaner energy sources. This aligns with India’s ambitious goal of achieving 500 GW of renewable energy capacity by 2030.

Market Insights on Lesser-rated Stocks

In contrast, Motilal Oswal assigned 'neutral' ratings to IEX and NTPC, with target prices of Rs 226 and Rs 450, respectively. Analysts note limited upside potential for NTPC, as its green energy subsidiary, NTPC Green Energy, is preparing for a Rs 10,000 crore initial public offering.

Growth in Power Consumption Trends

While India’s power consumption trends mirror China's growth trajectory from the early 2000s, the country’s power consumption is expected to compound at over 7 percent annually in the coming decade, supported by robust GDP growth and new demand drivers like electric vehicles (EVs) and data centers, said Motilal Oswal.

• By 2035, analysts estimate that one-third of power demand growth could stem from sectors like data centers, which are projected to grow at 30% annually.
• Power Grid could tap into an estimated Rs 2 lakh crore capex potential, enhancing its growth prospects.
• JSW Energy is set to grow its capacity 2.4x over the next 2.5 years, achieving a guided 20 GW in installed capacity before 2030.

Meanwhile, Tata Power is undergoing a multi-year business transformation with 45 percent of capex over FY23-27 allocated to renewable energy projects, increasing the share of core earnings from 40 percent to 90 percent.