Tata Power shares in focus post Q4 results, brokerages remain divergent

BUSINESS

Tata Power shares in focus post Q4 results, brokerages remain divergent

AIMPWA

May 15, 2025

Table of Content

Tata Power is likely to spend ₹25,000 crore as capital expenditure in FY26 and is keen to bid for two discoms in Uttar Pradesh

Tata Power shares rose 2 per cent in early trade following strong performance across verticals in Q4FY25.

Its consolidated Q4 PAT increased 25 per cent to ₹1,306.09 crore driven by the performance of core businesses comprising generation, transmission and distribution and renewables.

The company is likely to spend ₹25,000 crore as capital expenditure in FY26 and is keen to bid for two discoms in Uttar Pradesh.

In addition, the board recommended final dividend of ₹2.25 per share and fixed record date as June 20, 2025.

However, brokerages are divergent. Analysts of Elara Capital expect Tata Power to benefit from power transmission capex, power distribution reforms and green investments. They have maintained buy rating at an increased target price from ₹488 to ₹504, due to solar module execution and ramp-up at the cell facility.

Motilal Oswal has reiterated buy at a target price of ₹476, stating that the Q4 EBITDA growth was backed by improvement in Orissa distribution business, performance in Mudra, coal and shipping businesses and higher contribution from traditional and renewable generation.

In contrast, Nuvama Institutional Equities has maintained reduce rating at a target price of ₹374. While the brokerage is optimistic on Tata Power’s s long-term RE transition (70 per cent mix by FY30), solar manufacturing (50 per cent external by FY27) and optionality in solar rooftops, nuclear endeavours and potential UP Discom acquisition, Nuvama stressed that the growth is back-ended.

CLSA has maintained underperform rating at ₹351 target price, citing that the Indonesian coal mines, renewable energy independent power producer (IPP) business and Tata Projects dragged the profit.

The stock traded flat on the BSE at ₹395.70 as at 12.12 pm, after hitting an intraday high of ₹404.55.

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Despite the company’s cautious response, investors reacted positively to the possibility of a major collaboration with the South Korean shipbuilding giant.

The company’s sales for the period under review was ₹5,562 crore, up 13.6 per cent from ₹4,895 crore in the same period last year.

Published on May 15, 2025

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