Tata Power - Win more, lose less - Kotak

We upgrade Tata Power (TPWR) to BUY (from ADD) with a target price of Rs104 (Rs108 previously), as a depreciating local currency and potential reversal of imported coal prices does less harm to Mundra UMPP, and is beneficial for the coal business in Indonesia.

The stock catalyst stems from (1) ramp-up of coal production and potential revival in prices of imported coal, (2) a favorable outcome for compensatory tariffs at Mundra UMPP and (3) a depreciating Rupee that augurs well for the coal business, without significantly denting prospects at Mundra (US Dollar-denominated fuel compensation).

Source : Equity Bulls

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