At a Glance
Tata Power lit up the scoreboard in Q1 FY26 with a PAT of ₹1,262 Cr, up 6% YoY, and revenue of ₹18,035 Cr (+4% YoY). Renewable capacity hit 5.6 GW, EV charging network keeps expanding, and dividends are flowing. But the stock is down 16% YoY, trading at ₹389, because investors are still waiting for the “green energy supernova” moment. With a P/E of 30, this isn’t dirt cheap, but neither is it outrageously priced. Tata Power remains the old warhorse trying to look like a unicorn.
Introduction
Tata Power is the OG of India’s electricity game – over a century old, yet trying to reinvent itself as a renewable energy hero. They generate, transmit, distribute, and even sell solar rooftops. They dream big: 100% renewable generation and 1 lakh EV charging stations. Investors? They’re half-excited, half-bored. The company’s stock has been oscillating like a ceiling fan on speed 2 – some movement, but not enough to cool your portfolio.
With FY26 Q1 numbers showing steady but unspectacular growth, the question is: will Tata Power finally ignite a rally or keep flickering like a dying bulb?
Business Model (WTF Do They Even Do?)
Tata Power is India’s largest vertically-integrated power utility. Translation: they do everything – generation, transmission, distribution, and renewables. The business mix:
- T&D (62% of revenue) – the steady cash cow.
- Renewables (growing) – solar, wind, hybrids – the ESG poster child.
- EV charging, solar rooftops – small now but scaling.
They earn regulated returns in distribution and play the market in generation. The risk? Legacy thermal plants drag margins, and capex needs are massive. Essentially, they’re juggling coal, solar panels, and investor expectations.
Financials Overview
Q1 FY26 Highlights:
- Revenue: ₹18,035 Cr (+4% YoY)
- PAT: ₹1,262 Cr (+6% YoY)
- EBITDA: ₹3,565 Cr (margin 20%)
- EPS: ₹3.32 (annualized ~₹13.3)
FY25 Recap:
- Revenue: ₹66,220 Cr (+1%)
- PAT: ₹4,849 Cr (+1.5%)
- ROE: 11%
- Dividend payout: 20%
Fresh P/E based on annualized EPS: ₹389 / ₹13.3 ≈ 29.2. Fair but not screaming buy.
Valuation
- P/E Method
- Industry avg: ~20
- Tata Power: 29
- Fair value: ₹300–₹340.
- EV/EBITDA
- FY25 EBITDA ~₹12,983 Cr, EV ~₹1.3 Lakh Cr
- EV/EBITDA ~10x
- Fair range: ₹350–₹420.
- DCF (Discounted Current Fantasy)
- With 8% growth, 10% discount, terminal 4% – fair value ~₹370–₹400.
Fair Value Range: ₹340–₹400. Stock is near upper edge; needs growth kick to sustain.
What’s Cooking – News, Triggers, Drama
- Renewables ramp-up: 5.6 GW operational, big pipeline.
- EV charging push: targeting 1 lakh stations by 2025.
- Arbitration drama: $490M award contested – could swing financials.
- Debt: still high but manageable with strong cash flows.
- Key trigger: Green transition success and debt reduction could re-rate the stock.
Balance Sheet
| (₹ Cr) | Mar 25 |
|---|---|
| Assets | 1,56,193 |
| Liabilities | 1,20,672 |
| Net Worth | 35,841 |
| Borrowings | 62,866 |
Auditor’s Roast:
Debt at ₹62K Cr is like that overweight relative who promises to diet every year. Net worth is rising, but slowly.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Operating Cash | 7,166 | 12,504 | 12,680 |
| Investing Cash | -7,263 | -8,935 | -15,436 |
| Financing Cash | 1,341 | -4,497 | 4,292 |
Comment:
Ops cash is great, but massive capex eats it up. Financing inflows/outflows show the juggling act of raising and repaying debt.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 11% |
| ROCE | 10.8% |
| P/E | 29.2 |
| PAT Margin | 7.3% |
| D/E | 1.75 |
Verdict:
These ratios are decent but not inspiring. D/E is still high.
P&L Breakdown – Show Me the Money
| (₹ Cr) | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | 55,109 | 61,449 | 65,478 |
| EBITDA | 7,728 | 10,735 | 12,983 |
| PAT | 3,810 | 4,280 | 4,849 |
Comment:
Growth is visible but slowing. PAT growth needs a booster shot.
Peer Comparison
| Company | Revenue (Cr) | PAT (Cr) | P/E |
|---|---|---|---|
| Adani Power | 55,357 | 12,142 | 18.0 |
| Tata Power | 66,220 | 4,849 | 29.2 |
| Torrent Power | 29,165 | 2,824 | 23.1 |
| CESC | 17,340 | 1,378 | 15.9 |
Comment:
Peers like Adani Power have much higher margins. Tata Power trades at a premium because of its green narrative.
Miscellaneous – Shareholding, Promoters
- Promoters: 46.86% – Tata group’s solid backing.
- FIIs: 10% – stable interest.
- DIIs: 16% – growing confidence.
- Public: 27% – retail still hopes for a power rally.
EduInvesting Verdict™
Tata Power is like that disciplined student who scores 70% every year – solid, dependable, but not a rank holder. The company is well-positioned for the renewable boom, EV charging push, and clean energy policies. However, high debt and modest ROE/ROCE drag its appeal.
SWOT Snapshot:
- Strengths: Brand, integrated model, renewables push.
- Weaknesses: High debt, low ROE, legacy thermal drag.
- Opportunities: Renewable energy scale-up, EV infra expansion.
- Threats: Regulatory risks, competition from Adani & NTPC, execution delays.
Final Take:
Tata Power is a long-term green energy play, but don’t expect fireworks soon. At ₹389, it’s fairly valued – a steady compounder if you have patience, but not the multi-bagger adrenaline rush some crave.
Written by EduInvesting Team | 01 August 2025
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