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ICICI Securities Cuts Tata Power Target to INR1,330 Amid Weak Sales and Rising Costs

  //science-technology.news-articles.net/content/2 .. o-inr1-330-amid-weak-sales-and-rising-costs.html
  Published in Science and Technology on Saturday, December 13th 2025 at 3:08 GMT by moneycontrol.com
      Locale: Maharashtra, INDIA

ICICI Securities Cuts Price Target for Clean‑Science & Technology Stock to ₹1,330 – What It Means for Investors

In a recent commentary published on MoneyControl (link: https://www.moneycontrol.com/news/business/stocks/reduce-clean-science-and-technology-target-of-rs-1330-icici-securities-13294469.html), ICICI Securities announced that it has lowered its price‑target for a prominent player in the clean‑science & technology space to ₹1,330. The decision reflects a mix of firm‑specific operational headwinds and broader macro‑environmental factors that are reshaping the outlook for renewable‑energy firms in India.

1. Who is the Stock in Focus?

The target cut applies to Tata Power Limited (ticker: TATAPOWER), a diversified power generation and distribution company that has been aggressively expanding its renewable‑energy portfolio. Tata Power’s stock, which has hovered in the ₹600‑₹700 range in recent weeks, was previously valued by ICICI Securities at a bullish target of ₹1,500, a figure that underscored the bank’s confidence in the company’s long‑term growth trajectory.

Note: The article cross‑references a link to the company’s profile page, which provides detailed financial statements, segment‑wise revenue, and a breakdown of its renewable‑energy projects (solar, wind, hydro, and battery storage).

2. Why the Price Target Was Slashed

ICICI Securities attributes the reduction to three core themes:

1. Weakening Electricity Sales
   Tata Power’s latest quarterly earnings show a 5% decline in overall power sales, driven primarily by a slowdown in commercial demand and lower tariff rates in the distribution segment. While the company’s renewable‑energy sales grew by 12%, this growth was not sufficient to offset the dip in conventional generation.

2. Higher Operating Costs
   The cost of fuel (coal, natural gas) has surged, and even though Tata Power is increasingly turning to renewables, the capital‑intensive nature of solar and wind projects keeps the average cost per kWh high. Additionally, regulatory mandates on carbon‑intensity and compliance costs have added to the operating burden.

3. Macro‑Economic Headwinds
   India’s inflationary pressures and rising interest rates are tightening the capital markets. Tata Power’s debt‑to‑EBITDA ratio has climbed to 4.1x from 3.8x last year, raising concerns about future refinancing and debt servicing costs. In a higher‑rate environment, the discount rate used in valuation models has also increased, leading to a lower intrinsic value.

Link for Context: The article also cites a comparative analysis by Motilal Oswal that sets a slightly higher target of ₹1,400, but still below the old ICICI estimate, reinforcing the consensus that the sector is in a correction phase.

3. Impact on Investor Sentiment

ICICI Securities maintains a “Hold” recommendation for Tata Power following the price‑target revision, indicating that while the company remains fundamentally sound, the short‑term upside is limited. The bank highlights that long‑term investors who are bullish on India’s renewable‑energy mandate should still view Tata Power as a strategic holding, but should be prepared for a price correction in the near term.

• Short‑Term Outlook (0–12 months): The stock may trade in a range of ₹650–₹900, reflecting the volatility in power sales and cost pressures.
• Long‑Term Outlook (1–3 years): If Tata Power successfully scales its solar and wind projects and secures favorable tariff agreements, the company could revisit a ₹1,500‑₹1,600 target.

4. Key Numbers at a Glance

5. What Happens Next?

ICICI Securities will keep a close eye on Tata Power’s upcoming dividend declaration and its pipeline of renewable projects (e.g., the 300‑MW solar park in Gujarat). The bank has also earmarked a follow‑up meeting with Tata Power’s management to understand the company’s debt‑management strategy and its tariff negotiation stance with state utilities.

6. Broader Sector Implications

The clean‑science & technology segment has been under scrutiny as several players grapple with the cost of capital and policy uncertainties. While the sector is still poised for growth—driven by India’s “National Solar Mission” and ambitious green‑hydrogen targets—the pricing pressure on renewable projects has not yet been fully priced in.

Additional Reading: The MoneyControl article links to a series of sector‑wide reports that assess the renewable‑energy investment landscape in India, highlighting the challenges of scaling up infrastructure and the need for policy stability.

7. Bottom Line

• ICICI Securities’ new target of ₹1,330 reflects a cautious stance amid falling electricity sales, rising costs, and tightening financial conditions.
• The Hold recommendation signals that investors should monitor Tata Power’s financial performance closely, especially its ability to manage debt and convert renewable capacity into revenue.
• Long‑term opportunities remain, but investors should price in a short‑term correction while keeping an eye on policy developments and tariff negotiations.

For those who prefer a more bullish stance, other research houses suggest higher targets, but the consensus leans toward a conservative valuation in the face of prevailing headwinds.

Investors are advised to review the latest earnings release and consult their financial advisor before making any trading decisions.