Tata Power share price: Citi sees 41% potential upside; here's why
Tata Power's capex remained on track to meet FY27 guidance, Citi said adding that the management provided anencouraging commentary on near-term capacity commissioning.
- Jul 29, 2026,
- Updated Jul 29, 2026 9:11 AM IST
Citi, in its latest note on Tata Power Company Ltd, said the Tata group firm's business has continued its deliberate, multi-year transition, with a rising share of lower-volatility businesses as capital expenditure remained focused on transmission and distribution (T&D) and renewables. The brokerage said the company's business diversification should continue to lend resilience. It maintained its 'Buy' rating and Rs 525 target price on the Tata Power stock, implying a 41.41 per cent potential upside from Tuesday's closing price of Rs 371.25.
Citi said Tata Power reported a steady start to FY27, with Q1 revenue (up 6 per cent at Rs 19,100 crore), Ebitda (up 8 per cent at Rs 3,900 crore) and PAT at (up 11 per cent YoY at Rs 1,200 crore), respectively, and broadly in line with Bloomberg consensus estimates.
Tata Power's capex remained on track to meet FY27 guidance, Citi said adding that the management provided anencouraging commentary on near-term capacity commissioning.
"The quarter saw broad-based PAT growth across business clusters. The balance sheet remains strong compared with sector peers, providing headroom for accelerating medium-term growth. Key near-term monitorables include improvement in collections at distribution companies, further SPPA signings at Mundra, and execution of the planned capacity commissioning schedule," Citi said.
Mundra plant The foreign brokerage noted that the Mundra plant is operating under Section 11, while procurers are being billed in accordance with the supplementary PPA framework. The arrangement is broadly cost-reflective, covering the actual cost of coal, operating parameters and fixed costs, Citi said.
While SPPA with Gujarat was executed earlier, the management expects approvals from three other procuring states during August, the brokerage said.
Capex Citi sai Tata Power incurred capex of Rs 5,400 crore in Q1, marking a healthy start against its Rs 25,000 crore full-year plan. The company had incurred Rs 13,000 crore capex in the entire FY26.
"FY27 capex is spread across pumped storage, renewables, hydro, transmission and distribution projects. Management expects 2Q capex to rise to Rs 6,000-6,500, driven by the planned commissioning of 800-900MW of capacity and accelerating transmission and pumped-storage construction," Citi said.
Odisha update
Citi said Odisha distribution performance was affected by temporary collection and billing issues despite healthy underlying demand, with units sold increasing 10.4 per cent YoY during the quarter. Collections were delayed due to pending government payments, restrictions on consumer disconnections during the heat wave, and the lag between summer consumption, billing and cash realization, it said.
The Tata Power management expects the deferred amounts to be substantially recovered in Q2 and emphasized that these are timing issues rather than operational deterioration, Citi said.
Rooftop solar update Citi said Tata Power's rooftop solar business sustained strong momentum, with Q1 revenue at about Rs 1,350 crore, up 64 per cent YoY. The management expects a further 60 per cent growth in FY27 and believes its FY30E Rs 30,000 crore cumulative revenue aspiration could be achieved by FY29E. Tata Power plans to increase its market share from around 12-13% to approximately 25 per cent, supported by its channel network, supply chain, and after-sales capabilities.
"The addition of battery storage to residential and industrial rooftop offerings should further expand the addressable opportunity," Citi said.
Citi, in its latest note on Tata Power Company Ltd, said the Tata group firm's business has continued its deliberate, multi-year transition, with a rising share of lower-volatility businesses as capital expenditure remained focused on transmission and distribution (T&D) and renewables. The brokerage said the company's business diversification should continue to lend resilience. It maintained its 'Buy' rating and Rs 525 target price on the Tata Power stock, implying a 41.41 per cent potential upside from Tuesday's closing price of Rs 371.25.
Citi said Tata Power reported a steady start to FY27, with Q1 revenue (up 6 per cent at Rs 19,100 crore), Ebitda (up 8 per cent at Rs 3,900 crore) and PAT at (up 11 per cent YoY at Rs 1,200 crore), respectively, and broadly in line with Bloomberg consensus estimates.
Tata Power's capex remained on track to meet FY27 guidance, Citi said adding that the management provided anencouraging commentary on near-term capacity commissioning.
"The quarter saw broad-based PAT growth across business clusters. The balance sheet remains strong compared with sector peers, providing headroom for accelerating medium-term growth. Key near-term monitorables include improvement in collections at distribution companies, further SPPA signings at Mundra, and execution of the planned capacity commissioning schedule," Citi said.
Mundra plant The foreign brokerage noted that the Mundra plant is operating under Section 11, while procurers are being billed in accordance with the supplementary PPA framework. The arrangement is broadly cost-reflective, covering the actual cost of coal, operating parameters and fixed costs, Citi said.
While SPPA with Gujarat was executed earlier, the management expects approvals from three other procuring states during August, the brokerage said.
Capex Citi sai Tata Power incurred capex of Rs 5,400 crore in Q1, marking a healthy start against its Rs 25,000 crore full-year plan. The company had incurred Rs 13,000 crore capex in the entire FY26.
"FY27 capex is spread across pumped storage, renewables, hydro, transmission and distribution projects. Management expects 2Q capex to rise to Rs 6,000-6,500, driven by the planned commissioning of 800-900MW of capacity and accelerating transmission and pumped-storage construction," Citi said.
Odisha update
Citi said Odisha distribution performance was affected by temporary collection and billing issues despite healthy underlying demand, with units sold increasing 10.4 per cent YoY during the quarter. Collections were delayed due to pending government payments, restrictions on consumer disconnections during the heat wave, and the lag between summer consumption, billing and cash realization, it said.
The Tata Power management expects the deferred amounts to be substantially recovered in Q2 and emphasized that these are timing issues rather than operational deterioration, Citi said.
Rooftop solar update Citi said Tata Power's rooftop solar business sustained strong momentum, with Q1 revenue at about Rs 1,350 crore, up 64 per cent YoY. The management expects a further 60 per cent growth in FY27 and believes its FY30E Rs 30,000 crore cumulative revenue aspiration could be achieved by FY29E. Tata Power plans to increase its market share from around 12-13% to approximately 25 per cent, supported by its channel network, supply chain, and after-sales capabilities.
"The addition of battery storage to residential and industrial rooftop offerings should further expand the addressable opportunity," Citi said.