Tata Power Delivers Strong Q4 Performance with 25% PAT Growth
Tata Power shares were in focus on Thursday, rising 2% in early trade before closing flat at ₹398 on the BSE, after hitting an intraday high of ₹404.55. The rally was fueled by a strong March quarter (Q4FY25) performance, with the company posting a consolidated net profit of ₹1,306.09 crore, marking a 25% year-on-year increase. This growth was led by solid results in its core verticals of generation, transmission, distribution, and renewables. Analysts attributed the Q4 surge in profitability to improved efficiencies and higher contributions from both traditional and green energy assets.
Tata Power also announced a capital expenditure plan of ₹25,000 crore for FY26, which includes aggressive bids for two distribution companies (discoms) in Uttar Pradesh. Additionally, the board recommended a final dividend of ₹2.25 per share, with June 20, 2025, set as the record date, further bolstering investor sentiment.
Highlights:
Q4FY25 PAT rose 25% YoY to ₹1,306.09 crore.
Strong performance across core verticals including renewables and distribution.
Capex guidance for FY26 stands at ₹25,000 crore; focus on UP discom bids.
Final dividend of ₹2.25/share declared; record date fixed as June 20, 2025.
Brokerage Views Split on Tata Power’s Long-Term Growth and Q4 Upside
Despite the upbeat earnings, brokerages offered mixed reactions on Tata Power’s prospects. Elara Capital maintained a ‘Buy’ rating, raising the target price from ₹488 to ₹504, citing solar module execution and ramp-up at its new cell facility as key drivers. Elara also pointed to anticipated benefits from sustained transmission capex, upcoming distribution reforms, and Tata Power’s deepening push into renewable energy.
Motilal Oswal echoed a similarly bullish outlook, reaffirming its ‘Buy’ call with a target price of ₹476. The brokerage emphasized that Q4 EBITDA growth was underpinned by improved operational performance across Odisha distribution, Mundra generation, coal and shipping businesses, and expanding renewable capacity.
On the other hand, Nuvama Institutional Equities maintained a ‘Reduce’ rating with a target of ₹374, expressing concerns about back-ended growth. While acknowledging Tata Power’s long-term energy transition strategy—targeting 70% renewable mix by FY30, 50% external solar manufacturing by FY27, and optionality in areas like solar rooftops and nuclear—the brokerage flagged execution risks and a delayed earnings uptick.
Global brokerage CLSA remained bearish, maintaining an ‘Underperform’ rating with a target price of ₹351. CLSA pointed to weaker contributions from Tata Power’s Indonesian coal mines, the renewable IPP segment, and the Tata Projects division as drags on profitability, despite headline PAT growth.
Highlights:
Elara Capital: Buy; TP raised from ₹488 to ₹504; bullish on solar and green energy capex.
Motilal Oswal: Buy; TP ₹476; positive on Odisha discoms, coal, and renewables.
Nuvama Equities: Reduce; TP ₹374; cautious due to delayed RE monetization.
CLSA: Underperform; TP ₹351; flags drag from coal, IPP, and project execution.
Investor Outlook Remains Mixed as Tata Power Juggles Growth and Risks
The divergence in analyst ratings reflects broader concerns about Tata Power’s ability to sustain momentum amid regulatory headwinds, geopolitical challenges in coal operations, and execution hurdles in its ambitious renewable energy expansion. While short-term earnings have shown notable improvement, investors remain split on the stock’s long-term risk-reward dynamics. The company’s aggressive capital allocation, ambitious renewable targets, and bids for fresh discom acquisitions will remain key triggers in FY26.
Highlights:
Diverging views reflect valuation concerns versus long-term green energy optimism.
Execution risks in RE and discom bids weigh on some brokerages’ outlook.
Upcoming quarters critical to validate capex efficiency and returns trajectory.
