Tata Power: Should you buy this retail favourite stock post Q1?

Tata Power Company Ltd, which had 44.47 lakh retail investors owning 22.91 per cent stake in the largest power company in India at the end of June quarter, reported a decent set of quarterly results. The Tata group firm beat the Street estimates on adjusted profit front by 4 per cent, thanks to a 2.5 times YoY profit jump in Odisha discoms and 19 per cent operating profit margin in solar manufacturing. A couple of brokearges retained their 'Buy' on Tata Power post Q1 results. 

MOFSL said Tata Power's Q1 Ebitda came in 25 per cent above its estimate, backed by robust improvement in the Odisha distribution business as its AT&C losses narrowed and collection efficiency improved. It was also aided by a strong performance in the solar EPC business, and a higher contribution from the cell and module business with the facility operating at over 90 per cent utilization now, MOFSL said.

This brokerage noted that Tata Power is targeting new renewable energy (RE) capacity installation of 2GW in FY26. Potential supplementary PPA for Mundra and progress on distribution business bids in UP remain key catalysts for the stock in the coming quarters, it said.

"We reiterate our Buy rating on the stock with a target of Rs 487," MOFSL said. Antique Stock Broking has cut its target on Tata Power to Rs 467 from Rs 477 but maintained 'Buy' rating on the stock. 

Tata Power has guided for FY26 capex of Rs 25,000 crore, including Rs 3,700 crore spent in Q1. The company has commenced work on pumped hydro projects and is expecting it to be commissioned in Calendar 2029.  

Nuvama said it remains positive on Tata Power's long-term story, baking in the CGPL resolution -- albeit with higher losses versus discontinued Sec-11. 

"While Tata Power targets Rs 10,000 crore in PAT by FY30E (2.4x FY24’s), we expect this to be back-ended—materialising over FY28–30E as RE capacities pick up. At CMP, we find most positives price in, while any delays in CGPL resolution and/or RE commissioning could impact growth, particularly given the rich valuations—23x FY27E PE and 2.8x FY27E P/BV," it said.