Tata Power Targets 15-17% Operating Income Growth Over Next Three Years

Tata Power will achieve a 15-17% Compound Annual Growth Rate in Ebitda over the next two to three years, according to Chief Executive Officer and Managing Director Praveer Sinha. The initiatives which the company has taken in the last two to three years, are now bearing results and there will be much better consistency in performance from now on, he said.

“CAGR EBITDA growth of 15% to 17% is absolutely possible. Out of the six transmission projects being established, four will be commissioned in FY26. Our focus is on improving returns and ensuring benchmark profitability for our projects,” he told NDTV Profit.

Tata Power’s core businesses, comprising generation, transmission, and distribution, remained the backbone of its Q4 performance. Its Ebitda rose 14% year-on-year to Rs 3,829 crore in Q4 FY25 from Rs 3,358 Q4 FY24.  

The company’s total operational and under-construction capacity stood at 25.7 GW, with 9.9 gigawatts of clean energy projects in progress. In the transmission segment, two-thirds of projects are slated for commissioning in 2025, with 2,414 circuit km of transmission lines under construction. The solar module manufacturing segment achieved 27% margin, aided by third-party sales.

Sinha emphasised the strength of Tata Power’s fundamentals. “Our generation has always been the cash cow, and transmission and distribution have done very well. The fundamentals of our core businesses are very strong,” the top executive underlined. 

Odisha Discoms emerged as a standout performer, with Q4 profit after tax surging three-fold year-on-year. This was driven by an improvement in aggregate technical and commercial losses and enhanced customer service reliability. 

He highlighted that legacy issues in Odisha have largely been resolved. “What you’ve seen in Q4 will be the trend for the whole year in Odisha,” Sinha said. 

The rooftop solar order book grew 25% YoY to Rs 1,036 crore. The company’s cell and module plants have stabilised, with production efficiencies improving after overcoming initial teething problems, he said. “I will say both solar cell and module will produce more than 3,700 megawatts,” he added.