Fundamental Report Tata Power Company Ltd.

Tata Power Company Ltd, a flagship entity of the Tata Group, is one of India’s largest integrated power companies with operations across the power value chain – generation, transmission, distribution, and renewable energy. The company has progressively diversified from conventional thermal power into clean energy, making significant investments in solar, wind, hydro, and green mobility infrastructure. With a total generation capacity of over 14 GW, nearly 40% from renewable sources, Tata Power is well-placed to benefit from India’s energy transition and government focus on sustainability. Its presence in rooftop solar, EV charging infrastructure, and solar EPC solutions further strengthens growth prospects.

Recommendation                          ACCUMULATE

Accumulation Price                                         Rs.  380-370

Target Price                                    Rs.  490

Time Horizon 12 Months

Business Model

1. RENEWABLES: – Tata Power’s Renewables business plays a vital role in addressing India’s growing energy demands, while playing a significant role in the nation’s clean energy transition. It’s Renewables cluster includes large-scale solar, wind, and hybrid projects, as well as the manufacturing of solar modules and cells, alongside solar engineering, procurement, and construction (EPC).

• Renewable Energy: With its utility-scale solar, wind, and hybrid assets, along with strong EPC capabilities, is well-positioned to contribute significantly to India’s growing energy requirements through sustainable solutions. It has a total renewable energy capacity of 10.9 GW, including 5.4 GW under construction, and maintains a robust solar utility-scale EPC order book of Rs 3,977 crore.
• Wind & Solar Energy: Harnessing two of the world’s fastest-growing renewable sources, the company converts wind and solar power into clean electricity, accelerating the transition to a sustainable future. It operates a total wind capacity of 1,034 MW and a solar capacity of 4,516 MW.
• Solar Manufacturing: It is pioneering solar manufacturing with cutting-edge technology, fostering indigenous production, and strengthening the complete solar value chain while ensuring seamless customer support. It operates an integrated solar cell and module manufacturing plant with a capacity of 9 GW.

2. THERMAL & HYDRO: Manage hydropower and conventional power facilities with a combined 10,183 MW of capacity in North, West, and East India. In order to provide customers with reliable and reasonably priced electricity while managing the changes in energy dynamics, it focuses on the safe and competitive management of these assets. The company is dedicated to producing energy in an efficient and sustainable manner, minimizing its negative effects on the environment while meeting India’s expanding energy demands.

• Thermal Energy & Waste Heat Recovery: It operates advanced conventional plants, ranging from supercritical technology to waste heat recovery systems, delivering stable and efficient energy. These initiatives not only optimize operating costs but also help reduce emissions. The portfolio includes 8.9 GW of thermal energy capacity and 443 MW of waste heat recovery capacity.
• Hydro Energy: It is at the forefront of harnessing water as a sustainable source of energy and has been a pioneer in hydro power development. It has an installed hydro capacity of 2,605 MW (including 1,725 MW under construction) and is also developing 2,800 MW of pumped storage projects (PSP), which will play a crucial role in balancing renewable integration and ensuring grid stability.

3. TRANSMISSION & DISTRIBUTION:- The company’s transmission and distribution business is designed to deliver reliable power seamlessly, even across difficult environment and long distances. It operates around 7,047 circuit kilo meters of transmission lines, including 2,414 ckm under construction, covering states such as Mumbai, Uttar Pradesh, West Bengal, Bihar, Rajasthan, and Haryana. On the distribution side, it serves more than 12.8 million customers in Mumbai, Delhi, Odisha, and Ajmer. To improve efficiency and transparency, it has also installed over 26 lakh smart meters, significantly improving customer experience.
4. NEW-AGE ENERGY SOLUTIONS:- At Tata Power, it transforming the consumer energy landscape with the new‑age and environment-friendly energy solutions across the rooftop solar, smart meters, battery energy storage systems (BESS), electric vehicles (EV), and home automation verticals.

• Rooftop Solar:- With a strong pan-India presence, the company accelerate solar adoption by offering end-to-end sales, service, and innovative solutions, powering a greener, more sustainable future for the consumers. 1.5+ lakh Rooftop solar installations (achieving 3 GW capacity till date).
• EZ Home – A smart living solution powered by advanced technology, enabling intelligent automation and control. It helps reduce energy consumption by 8.5% and lowers electricity bills by up to 20%. During the year, 14 new products were launched under this segment.
• EZ Charge – Powering India’s EV charging ecosystem and driving the nation’s e-mobility transition. The network comprises over 6,700 public EV and bus charging points and more than 1,35,000 home chargers installed.

BUSINESS HIGHLIGHTS

• Signed a PPA with SJVN Limited to set up a 460 MW Firm and Dispatchable Renewable Energy (FDRE) project.
• Signed PPA with NTPC for the development of a 200 MW FDRE project.
• Commissioned India’s first solar plant to incorporate a unique combination of single-axis trackers and bi-facial modules of 431 MWp DC (330 MW AC) in Neemuch, Madhya Pradesh.
• Secured H 455 crore contract to supply 300 MWp ALMM Modules to Maharashtra State Power Generation Company.
• Partnered with Tata Motors to co‑develop a 131 MW wind-solar hybrid project.
• Signed MoU with Asian Development Bank for $ 4.25 billion to finance clean and green energy projects.
• Crossed 1.5 lakh rooftop solar installations, achieving 3 GW capacity across 700+ cities till date and maintaining the No.1 rooftop solar rank for 10 years.
• Partnered with Noida International Airport to supply 10.8 MW wind power.
• Won two transmission projects for 377 ckm with a capex of ~H 2,500 crore and for 384 ckm on Build-OwnOperate-Transfer (BOOT) basis with a capex of ~H 2,300 crore.
• Partnered with Bhutan’s Druk Green Power Corporation to develop 5 GW clean and green energy projects, out of this for 600 MW Khorlochhu Hydro Project, executed definitive agreements and work has begun.
• The 1,000 MW Bhivpuri Pumped Hydro Project has secured key approvals, including from the Central Electricity Authority (CEA), and is set to begin construction in H1 FY26 with commissioning targeted by August 2028. Work on the 1,800 MW Shirawata project is expected to start in later part of the year and will get commissioned in 2030.

Indian Power Sector

In FY 2024-25, India’s power sector witnessed significant progress across energy generation, transmission, and distribution sectors. Per capita electricity consumption surged to 1,395 kWh in 2023-24, reflecting a 45.8% increase (438 kWh) from 957 kWh in 2013-14. The sector demonstrated resilience by being able to reduce both monthly energy and peak demand shortages to an average of 0.09% and 0.03% in FY 2024-25. Energy requirements, grew by 4.2%, reaching 1,695 billion units (BU).

In FY24-25, Indian’s installed generation capacity stood at 475 GW as of March 31, 2025 with a capacity addition of 33 GW. And share of thermal capacities in the total installed generation capacity declined from 62% in FY20 to 52% in FY205, the share of renewable capacities grew from 245 to 36%. Approx. 86% of total capacity additions of 33 GW came from renewable sources (Solar: 24 GW and other renewables: 5 GW) in FY25. And lastly 4 GW of coal – based plants were commissioned, constituting another 11% of the additions.

India’s power demand is projected to grow significantly, driven by its rapid economic expansion, electrification of transport and expansion of data centres. It is getting exacerbated by heatwaves pushing peak electricity demand higher. At the same time, the global shift towards clean and green energy has created a dynamic opportunity landscape. This calls for a strategic balance between conventional and renewable energy sources, accelerated expansion of energy storage, transmission and power distribution infrastructure, and the incubation of innovative, future-ready energy solutions.

There is increasing traction towards firm and dispatchable modes of generation, supported by the evolution of advanced energy storage solutions. At the same time, the deployment of smart grids, AI-driven energy management, and IoT-based solutions is enhancing overall system efficiency and reliability. With urban energy demand expected to rise steadily, the need for smart infrastructure and dependable power distribution is becoming more critical. In this context, grid resilience, sustainability, and affordability will continue to remain top priorities to ensure long-term energy security.

Management Commentary on the business & its future prospects:

1. Power consumption declined 1.3% this quarter due to an early monsoon. However, Tata Power expects demand to rebound in August–September with rising temperatures. Several capacity additions, initially planned for last year, have spilled over into this financial year.
2. Discussions on Section-11 concluded in June. Tata Power is finalizing a Supplementary PPA (SPPA) with procurer states, expected within August. The Mundra plant is currently under maintenance, with operations to resume post-SPPA, ensuring competitiveness and optimized cost recovery.
3. Operational improvements reduced AT&C losses to 17–18%, with a target of 10% in three years. Collection efficiency has improved, legacy issues are resolved, and 25 lakh smart meters installed. Strong execution supports higher profitability and predictable cash flows.

1. Renewable capacity, rooftop installations, and pumped hydro projects are expected to expand substantially in FY’26–27. Tata Power is committed to supplying 24×7 clean energy to C&I customers, improving EBITDA, PAT, and operational efficiency across its generation, transmission, distribution, and renewable portfolios.

5. From June 2026, all rooftop projects, including residential and C&I, will require domestic DCR-compliant cells and modules. Tata Power is already executing multiple projects under DCR guidelines, positioning itself as a leading domestic solar supplier and supporting government renewable initiatives.
6. Tata Power’s cell plants were not on the initial ALMM-II approved list due to pending inspections. Once plant inspections are completed, the company will be added, ensuring compliance with government programs and continued eligibility for domestic rooftop and utility projects.

Q1FY26 Result Analysis

1. Revenue from Operations: Tata Power reported revenue from operations of Rs 18,035.07 crore in Q1 FY26, representing a QoQ growth of 5.49% from Rs 17,095.88 crore in Q4 FY25 and a YoY increase of 4.3% from Rs 17,293.62 crore in Q1 FY25. The relatively muted growth was primarily due to lower power scheduling caused by an early monsoon.
2. Profit After Tax: Tata power has reported a PAT of Rs 1,262.32 crore in Q1 FY26, reflecting a 3.35% decline from Rs 1,306.09 crore in Q4 FY25 on a QoQ basis, primarily due to the net movement in regulatory deferral balances. On a YoY basis, PAT increased by 6.2% compared to Rs 1,188.63 crore in Q1 FY25.
3. EBITDA: TPCL has reported an EBITDA of Rs 3,565.17 crore in Q1 FY26, reflecting a YoY growth of 16.4% compared to Rs 3,061.75 crore in Q1 FY25, and a QoQ growth of 16.2% from Rs 3,068.26 crore in Q4 FY25. The EBITDA margin for Q1 FY26 improved to 19.77%, up from 17.70% YoY and 17.95% QoQ.
4. Segment-wise Revenue: In Q1 FY26, Tata Power reported segment-wise revenues of Rs 4,844.19 crore from Thermal & Hydro, Rs 10,077.83 crore from Transmission and Distribution, Rs 3,625.85 crore from Renewables, and Rs 109.05 crore from other businesses.

Outlook:

TPCL, is one of India’s largest integrated power companies with operations across the power value chain – generation, transmission, distribution, and renewable energy. Operational momentum remained strong with a record 652 MW capacity addition. The company further strengthened its renewable portfolio by acquiring a 40% stake in KHPL. Reinforcing its clean mobility leadership, Tata Power inaugurated India’s largest TATA.ev MegaCharger Hub. With sustained capex, diversified operations, and a growing renewable pipeline, the company remains well positioned to support India’s energy transition and deliver long-term value. The company will commissioned two projects in this quarter, and more within 3–4 quarters, ensuring reliable infrastructure and supporting long-term performance growth.

On a TTM basis, the company has reported an EPS of Rs 12.93 and is trading at a P/E of 30.54x at the current market price of Rs 395 per share. Thus, we recommend an Accumulate rating on the stock, with a price range of Rs 380–Rs 370, and a target price of Rs 490 within an investment horizon of 12 months.

Profit and Loss Statement:

Particulars	Q1FY26	Q1FY25	Q4FY25	YoY%	QoQ%	FY25	FY24	YoY%
Net Sales	18035.1	17293.6	17095.9	4.3	5.5	65478.2	61448.9	6.6
Other Income	494.4	577.7	860.9	-14.4	-42.6	2307.3	3367.8	-31.5
Total Income	18529.5	17871.3	17956.8	3.7	3.2	67785.5	64816.7	4.6
Total Expenditure	14469.9	14231.9	14027.6	1.7	3.2	52646.6	50665.1	3.9
EBIDT	4059.6	3639.5	3929.2	11.5	3.3	15138.9	14151.6	7.0
Interest	1279.2	1176.2	1213.2	8.8	5.4	4702.4	4633.2	1.5
EBDT	2780.4	2463.2	2716.0	12.9	2.4	10436.5	9518.4	9.6
Depreciation	1160.9	972.9	1116.3	19.3	4.0	4116.9	3786.4	8.7
EBT	1619.5	1490.3	1599.7	8.7	1.2	6319.6	5732.0	10.3
Tax	144.8	181.5	189.5	-20.2	-23.6	972.1	808.8	20.2
Deferred Tax	212.3	120.3	104.1	76.5	103.9	572.1	643.1	-11.0
PAT	1262.3	1188.6	1306.1	6.2	-3.4	4775.4	4280.1	11.6

Balance Sheet:

Particulars	202503	202403	202303
SOURCES  OF  FUNDS :
Share Capital	319.6	319.6	319.6
Reserves Total	35521.1	32035.7	28467.9
Total Shareholders Funds	35840.7	32355.3	28787.4
Minority Interest	6765.4	5977.5	5416.7
Secured Loans	34435.2	27848.4	28224.9
Unsecured Loans	28430.6	25841.1	24698.1
Total Debt	62865.8	53689.5	52923.0
Other Liabilities	16292.1	15101.4	13913.6
Total Liabilities	121764.0	107123.7	101040.7
APPLICATION OF FUNDS :
Gross Block	113685.7	98780.6	89897.1
Less: Accumulated Depreciation	35205.3	31470.2	28150.4
Less: Impairment of Assets	106.0	100.9	0.0
Net Block	78374.4	67209.6	61746.7
Capital Work in Progress	12678.9	11561.3	5376.4
Investments	16316.4	16316.0	16669.7
Current Assets, Loans & Advances
Inventories	4571.8	4419.6	3942.9
Sundry Debtors	5709.8	7401.7	6952.2
Cash and Bank	11751.0	9151.9	11206.5
Loans and Advances	6566.9	6014.3	7840.4
Total Current Assets	28599.4	26987.5	29942.0
Less: Current Liabilities and Provisions
Current Liabilities	30197.5	29071.6	24859.9
Provisions	645.8	585.9	529.0
Total Current Liabilities	30843.2	29657.5	25389.0
Net Current Assets	-2243.8	-2670.0	4553.0
Deferred Tax Assets	5102.0	5602.6	5508.7
Deferred Tax Liability	8688.1	7875.8	7175.2
Net Deferred Tax	-3586.1	-2273.2	-1666.5
Other Assets	20224.2	16980.1	14361.5
Total Assets	121764.0	107123.7	101040.7

Cash Flow Statement:

Particulars	202503	202403	202303
Cash Flow Summary
Cash and Cash Equivalents at Beginning of the year	3143.85	4072.28	2829.02
Net Cash from Operating Activities	12680.19	12504.37	7165.59
Net Cash Used in Investing Activities	-15436.29	-8935.37	-7263.1
Net Cash Used in Financing Activities	4292.39	-4497.43	1340.77
Net Inc/(Dec) in Cash and Cash Equivalent	1536.29	-928.43	1243.26
Cash and Cash Equivalents at End of the year	4680.14	3143.85	4072.28

Source: Company website, EWL Research

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