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Tata Power Share Price Prediction: The Bears Have Their Way

The sentiment around Tata Power share price seems to have turned bearish, as the stock extended its losing streak to the sixth session in a row on Friday. TATAPOWER traded at 412.00 at the time of writing, having lost 0.36 percent as of this writing.  The extended decline is telling, considering that the energy company only released its earnings results two days ago. The share price is down by 5.6 percent since that release.

The current Tata Power share price prediction is influenced by the recent earnings figures. The share price is experiencing a somewhat anticlimactic run in May, considering that the bearish sentiment has set in less than a week after it recorded new all-time highs of Rs 464.20. The company reported on May 8 consolidated net profit of Rs 1,045.59 crore for the 2023-24 financial year. The figure represented a growth of 11.37 percent year-over-year. The current share price decline, despite the impressive returns, is informed by a forecast decline in its coal-powered thermal generation income. The latest earnings were mainly driven by the thermal coal generated power. Therefore, reduced headroom in the 2024-25 fiscal year is likely to impact earnings negatively.

In addition, the 2023-24 earnings were impacted by a 76 percent decline in income from coal mines. Also, the renewable energy portfolio reported weak growth- something that doesn’t sit well for Tata as the Indian government pushes for a transition to clean power sources. However, Tata Power expects improved earnings from a projected rise in power demand in the next 2-3 years.

Technical analysis

The sellers are currently in control, as signaled by the RSI indicator. Tata Power share price pivots at 414.10, and the downside is likely to continue if resistance remains at that level. The resulting momentum could break the support at 403.85, and potentially go on to test 394.60 if the sellers extend their control. Alternatively, a move above 414.10 will signal a shift in control in favour of the buyers. They will likely encounter the next resistance at 422.30. A continuation of their control at that point will break the resistance while invalidating the downside narrative. In addition, the momentum could boost the price further to test 431.20.