 "Credit Suisse downgrades Tata Power; shares fall")
Credit Suisse downgraded Tata Power to “underperform” from “neutral” and cut its target price to Rs 83 from Rs 104 .
The investment bank says Tata’s power plant being built in Mundra should be operational in fiscal 2014, and that the company could post losses of Rs 15-1600 crore per annum in the initial years.
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Tata Power shares fell 2.9 percent to Rs 98.20..AFP[/caption]
The project, which runs on coal imported from Indonesia, has been suffering from mounting losses after the Southeast Asian nation last year raised levies on coal exports.
Tata Power has asked the regulator to allow it to raise Mundra tariffs to recover the higher coal costs, but Credit Suisse notes that an early resolution is unlikely.
The investment bank also cited valuations as a reason for its downgrade, and recommended investors to switch to NHPC and KSK Energy Ventures
Tata Power shares fell 2.9 percent to Rs 98.20.
Reuters