Tata Power Gains 6.17%: 3 Key Factors Driving the Weekly Move

27 January 2026: Open Interest Surge Signals Market Repositioning

On 27 January, Tata Power witnessed a significant 14.4% increase in open interest in its derivatives segment, rising to 1,03,363 contracts from 90,372 the previous day. This surge accompanied a futures volume of 56,368 contracts and a combined derivatives turnover of ₹1,38,665 lakhs, indicating robust market activity. Despite this, the stock price rose modestly by 0.80% to close at Rs.348.05, slightly underperforming the power sector and the broader market.

The elevated open interest alongside rising delivery volumes suggested active repositioning by investors, possibly reflecting cautious or bearish sentiment given the stock’s position below all key moving averages. The MarketsMOJO Mojo Score had recently deteriorated to 26.0 with a Strong Sell grade, underscoring the cautious stance prevailing among market participants.

29 January 2026: Intraday High and Continued Rally

Tata Power extended its gains on 29 January, surging 3.06% to an intraday high of Rs.365.8 and closing at Rs.366.40. This marked the third consecutive day of gains, with a cumulative 5.88% return over this period, outperforming both the power sector and the Sensex. The stock’s performance was supported by trading above its 5-day moving average, signalling short-term strength, although it remained below longer-term averages.

The broader market environment was cautiously positive, with the Sensex rising 0.23% on the day. Tata Power’s outperformance highlighted its relative strength amid a stable market backdrop. Despite this momentum, the Mojo Score remained at 26.0 with a Strong Sell rating, reflecting ongoing concerns about the company’s fundamentals and valuation.

29 January 2026: Valuation Shift Reflects Market Reassessment

On the same day, Tata Power’s valuation parameters underwent a notable shift. The company’s price-to-earnings (P/E) ratio rose to 28.09, and the price-to-book value (P/BV) ratio increased to 3.01, signalling a move from an attractive to a fair valuation grade. This change was accompanied by a downgrade in the mojo grade from Sell to Strong Sell, reflecting concerns about the stock’s premium pricing relative to its operational returns.

Comparative analysis showed Tata Power’s valuation less compelling than peers such as NTPC, which trades at a P/E of 14.22 and holds an Attractive rating. Meanwhile, other sector players like Adani Power and Power Grid Corporation were classified as Very Expensive. Tata Power’s return on capital employed (ROCE) of 9.69% and return on equity (ROE) of 10.71% were modest, and the dividend yield remained low at 0.63%, limiting income appeal.

This valuation recalibration, combined with mixed recent returns and cautious mojo grading, suggests investors are reassessing the stock’s price justification amid evolving market conditions.

30 January 2026: Week Closes on a Positive Note

The week concluded on 30 January with Tata Power marginally up by 0.05% to Rs.366.60, maintaining the gains achieved earlier. The Sensex closed slightly lower by 0.22%, underscoring Tata Power’s relative resilience. Trading volume on the day was lower at 281,484 shares, reflecting a consolidation phase after the strong rally.

Overall, the stock outperformed the Sensex by nearly 4.5 percentage points over the week, highlighting its strong momentum despite mixed fundamental signals and cautious market sentiment.

Key Takeaways

Positive Signals: Tata Power’s 6.17% weekly gain significantly outpaced the Sensex’s 1.62%, driven by strong derivatives market activity and a three-day rally culminating in an intraday high of Rs.365.8. The stock’s ability to trade above its 5-day moving average indicates short-term buying interest and momentum.

Cautionary Signals: Despite the rally, the stock remains below longer-term moving averages, and the MarketsMOJO Mojo Score of 26.0 with a Strong Sell grade reflects ongoing fundamental concerns. The shift in valuation from attractive to fair, with elevated P/E and PEG ratios, suggests the market may be pricing in optimistic growth expectations that warrant scrutiny.

Market Context: The power sector’s mixed performance and Tata Power’s relative underperformance earlier in the week highlight sector-specific challenges. The stock’s modest dividend yield and moderate returns on capital employed and equity further temper enthusiasm.

Conclusion

Tata Power Company Ltd’s week was marked by a robust 6.17% price appreciation, supported by heightened derivatives activity and a strong intraday performance. While the stock demonstrated clear short-term momentum and outperformed the broader market, valuation shifts and a cautious mojo rating underscore the need for careful monitoring. Investors should weigh the recent rally against the company’s fundamental metrics and sector dynamics, recognising that the current momentum may be part of a consolidation phase amid mixed signals. Continued attention to price action, volume trends, and upcoming financial disclosures will be essential to assess the sustainability of this positive trend.

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