Recently, we have seen a huge buzz around Tata Power vs Adani Power. Reason? They are the most popular trading and investment bets in the power sector of the Indian economy! If you’re also an investor of these stocks, then you must have gained multi bagger returns in the last three years.
So how these returns are related to the comparison of Tata Power vs Adani Power? Look, the high returns indicate that the companies are doing a remarkable job in their respective segments and thereby making profits.
Well, that’s pretty much simple to understand right? In this comparative analysis of Tata Power vs Adani Power, we will consider various factors like stock performance, financial ratios, market conditions, and so on.
(A) Tata Power vs Adani Power: A Brief Overview
Tata Power and Adani Power are two major players in the power generation industry in India. Before diving deeper into the comparison analysis, let’s have a brief overview of both companies-
|Tata Power Company Limted
|Adani Power Limited
|Type of Company
|Energy & Renewable Energy
(MD & CEO)
(MD & CEO)
Natural Gas Exploration,
Production & Transportation
|Energy Sources of
Tata Power vs Adani Power signifies the battle between two dominant players in India’s electricity scene. Apart from their glorious history, they have appreciable finances too! We will discuss them in the next section.
(B) Financial Comparison of Tata Power vs Adani Power
Let’s compare the overall finances of Tata Power vs Adani Power-
|Financial Aspects (FY23)
|Rs.1.89 lakh crore
From the table, it is evident that both Tata Power and Adani Power are significant players in the power sector, with substantial market capitalizations of Rs.88,111.49 crore and Rs.1.89 lakh crore, respectively. In terms of revenue, Tata Power generated Rs.56,547.10 crore, surpassing Adani Power’s Rs.43,040 crore.
However, Adani Power outperforms Tata Power in net income, reporting Rs.10,726 crore compared to Tata Power’s Rs.3,336.40 crore. Adani Power’s higher net income could be attributed to its impressive operating income of Rs.12,044 crore, exceeding Tata Power’s Rs.7,706.30 crore.
Examining total assets, Tata Power holds a more substantial position with Rs.125,349 crore compared to Adani Power’s Rs.85,821 crore. Surprisingly, despite Tata Power’s lower net income, its total equity stands at Rs.28,787.40 crore, slightly less than Adani Power’s Rs.29.875 crore.
Promoter stakes reveal Tata Power at 46.9%, whereas Adani Power has a higher promoter stake at 69.6%. This suggests a stronger promoter influence in Adani Power.
In conclusion, while Tata Power leads in revenue and total assets, Adani Power demonstrates stronger net income and operating income. The decision regarding stronger financials depends on the specific metric under consideration.
(C) Stock Performance: Tata Power vs Adani Power
Now, here comes the most anticipated part of this write-up i.e. the stock performance of Tata Power vs Adani Power. How is that so important? You may wonder. Well, some of the folks already know that the stock performance represents who is leading the power space in the Indian market.
The better the overall stock performance, more dominant the position is…
So, let’s delve into it-
|Shares down 3.5%
|Shares up 2.84%
|Share Price (4 Dec,2023)
|Indian Promoters: 46.9%
Foreign Collaborators: N/A
|Indian Promoters: 46.6%
Foreign Collaborations: 22.9%
|Financial Growth (CAGR)
|EPS (Earnings Per Share)
|P/E Ratio (Price to Earnings)
|7.3x (lower P/E indicate potential value)
|Technical Analysis (Relative Strength Index)
|Short Term Returns(Recent)
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(D) Takeaways from the stock performance analysis of Tata Power vs Adani Power
As you delve into the comparison between Tata Power and Adani Power, several key insights emerge. Tata Power’s recent stock performance shows a 3.5% decline, whereas Adani Power sees a modest 2.84% increase, yet the share price for Adani Power stands higher at Rs.491.00 compared to Tata Power’s Rs.281.55.
Examining shareholding structures, both companies have Indian promoters, but Adani Power includes foreign collaborations, holding 22.9%, showcasing a more diversified ownership structure.
Financially, Tata Power boasts a higher revenue growth rate (CAGR) at 23.9%, while Adani Power excels in profit CAGR with an impressive 571.5%. Adani Power’s earnings per share (EPS) of Rs.24.6 surpasses Tata Power’s Rs.10.4, indicating stronger individual share profitability.
The lower price-to-earnings (P/E) ratio of Adani Power at 7.3x suggests potential value, whereas Tata Power has a P/E ratio of 22x.
Considering pledged shares, Adani Power has a higher percentage at 25%, raising concerns about financial stability compared to Tata Power’s 1.40%. In terms of short-term returns, Adani Power outperformed Tata Power with a recent gain of 24.33% compared to Tata Power’s 20.43%.
Looking at the 5-year compound annual growth rate (CAGR), Adani Power significantly outshines Tata Power at 55.69% compared to 28.38%.
In this comparison, Adani Power emerges as the stronger contender, showcasing better financial growth, share profitability, and higher short-term returns. Your decision should align with your specific investment goals and risk tolerance.
(E) Tata Power vs Adani Power: Who’s leading the power space?
Determining who is leading the power space between Tata Power and Adani Power depends on the specific criteria that matter most to you as an investor. Adani Power exhibits impressive share performance, substantial profit growth, and a diversified ownership structure, suggesting strength and potential value. Meanwhile, Tata Power boasts a more stable pledged shares scenario and higher revenue growth, emphasizing reliability.
Considering your investment goals and risk tolerance is crucial in making a decision. Adani Power’s recent performance positions it as a strong contender, but Tata Power’s market presence and financial stability also carry weight.
There isn’t a one-size-fits-all answer – the leader in the power space is subjective and aligns with your priorities as an investor. Evaluate these aspects carefully to make an informed decision based on your specific criteria.
(F) Final Words: Who is the winner in Tata Power vs Adani Power?
As you weigh the battle of Tata Power vs Adani Power, each presents compelling strengths. Adani Power with its higher share price, remarkable profit growth, and diverse ownership structure stands out, reflecting potential value with a lower P/E ratio. On the other hand, Tata Power showcases reliability, marked by higher revenue growth and a stable pledged shares scenario.
In this decision-making process, your choice depends on your investment goals and risk tolerance. Adani Power’s recent performance and robust growth rates make it a strong contender, yet Tata Power’s market presence and financial stability are equally noteworthy. It’s a nuanced competition where both have their merits.
Ultimately, the leader in the power space is contingent on the specific criteria that matter most to you as an investor. Consider these aspects carefully as you navigate the landscape of energy investments!