Shares of Tata Power and JSW Energy rose by as much as 2% on Monday after global brokerage firm Nomura initiated coverage on both companies with a ‘Buy’ recommendation. 

Nomura set a price target of Rs 560 for Tata Power, implying a potential upside of over 27% from Monday’s closing levels. For JSW Energy, the firm assigned a price target of Rs 885, signaling a substantial growth potential.

Strong Growth Expectations for Tata Power

Nomura anticipates Tata Power to achieve a strong 16% compound annual growth rate (CAGR) in EBITDA between FY24 and FY27. This growth will largely be fueled by a doubling of the company’s renewable energy capacity, reflecting Tata Power’s commitment to expanding its clean energy portfolio. 

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Additionally, strong performance in its solar EPC (Engineering, Procurement, and Construction) orderbook will further contribute to its earnings growth during this period. Tata Power’s aggressive focus on clean energy aligns with broader trends in India’s power sector, which is increasingly shifting towards renewable sources. 

JSW Energy’s Solid Growth Outlook

Similarly, Nomura forecasts a solid 38% EBITDA CAGR for JSW Energy over FY24 to FY27, supported by a more than twofold increase in operational capacity. 

The brokerage highlighted significant opportunities for the company across the entire energy value chain as India shifts towards cleaner energy sources.

India’s Growing Energy Demand

In a note, Nomura emphasized that it expects India’s energy demand to grow at a 7% CAGR from FY24 to FY30, surpassing the historical average of 5%. 

This surge in demand will be driven by developments such as the rise of data centers and the increasing adoption of electric vehicles, creating upward potential for companies in the sector.

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