Tata Power Sees Fresh Target Price Hike After Q4 Results; ICICI Securities Stays Bullish — Check Potential Upside

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ICICI Securities Report

The brokerage firm ICICI Securities has maintained Buy rating on Tata Power Company Ltd. with a revised target price of Rs 485 versus Rs 455 previously, implying a potential upside of 16% from the current market price, citing multitude of growth levers.

Tata Power registered revenue of Rs 16,000 crore, (-8% YoY), Ebitda of Rs 3,660 crore (+5% YoY) and profit (after MI) of Rs 1,000 crore (-4% YoY) in Q4, as the Mundra plant shutdown continued to be a drag on profits.

Ebitda growth was aided by incremental Ebitda from –

1. solar module and cell manufacturing (Rs 100 crore);
2. Odisha discoms (Rs 90 crore); and
3. solar rooftop (Rs 120 crore).

Its rooftop solar volumes were impressive in Q4, at 0.67GWp.

A multitude of growth levers

Tata Power has a diverse set of growth levers –

1. The company is looking to ramp up its RE capacity and plans to add 2.5GW each in FY27 and FY28.
2. Strong growth potential for rooftop solar business.
3. Under-construction transmission projects and PSP projects of 2.8GW.
4. Under-development hydro projects in Bhutan.
5. A 10GW solar wafer and ingot capacity is also in pipeline.

Key risks: Delay in execution of RE projects and delay in execution of pumped storage and hydro projects.

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