Shares of Tata Power Ltd will be in the spotlight on Thursday after Moody’s Ratings reaffirmed the Tata Group company’s corporate family rating (CFR) at Ba1 while upgrading its outlook from stable to positive.

Additionally, Tata Power has signed a Memorandum of Understanding (MoU) with the Assam government to develop up to 5,000 MW of renewable energy, including solar, wind, hydro, and energy storage. The initiative, backed by an investment of ₹30,000 crore, is expected to generate 3,000 direct jobs and accelerate clean energy adoption in the state.

In the previous trading session, Tata Power shares declined by 1.05%, closing at ₹351.05 on the BSE, bringing its market capitalization down to ₹1.12 lakh crore.

Technical indicators show that the stock is neither overbought nor oversold, with its Relative Strength Index (RSI) at 45.4. However, it is currently trading below its 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day moving averages.

So far in 2024, Tata Power shares have fallen by 10.54%. However, the stock has delivered a 73% return over the past two years and a staggering 579% gain over five years, making it a multibagger.

According to Moody’s Ratings Analyst Zi Zhu, the positive outlook reflects Tata Power’s strong financial performance and expectations of sustained improvement in credit metrics, driven by enhanced operational efficiencies in its regulated businesses and an expanding renewable energy portfolio. Under Moody’s base case projections, Tata Power’s CFO pre-WC/debt ratio is expected to range between 12%-15% over the next two to three fiscal years, meeting or surpassing the upgrade threshold of 13%. Over the next 12 to 18 months, Moody’s will monitor the company’s capital expenditure and financing strategies to evaluate their impact on projected financial metrics.