Tata Power Exceeds Expectations Despite Subdued Q1 Demand

Tata Power reported consolidated Q1-FY26 revenue of ₹18,000 crore, a 4% year-on-year increase, with EBITDA reaching ₹3,600 crore, up 15% y-o-y. The outperformance was driven by lower-than-expected fuel costs and other expenses. Adjusted PAT stood at ₹1,060 crore, surpassing estimates by 23%.

Standalone operations saw a 6% revenue decline to ₹5,200 crore due to early monsoon impacts on power demand. Utilization rates (PLF/CUF) dipped across generation assets, yet integrated operations buoyed results. Future growth hinges on rooftop solar expansion, new solar manufacturing capacity, and the 1,000 MW Bhivpuri pumped hydro project.

Analysts project an 8-13% CAGR for revenue and profits through FY28, maintaining a Buy rating with a revised target price of ₹436. The valuation reflects 13.3x EV/EBITDA on FY27 estimates.