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Tata Power Company Ltd, one of the leading companies in India’s power sector, has a remarkable cumulative generation capacity of over 2,785 MW. With a track record of evolution and continuity, Tata Power had a forerunner status within the industry. The company has electricity generation and distribution activities in practically all areas: thermoelectric, hydroelectric, solar and wind, and liquid fuel stations, as well as transmission and distribution.
Tata Power has many of its services such as Design & Development, Direct Marketing, Power projects & related services, and Transmission & Distribution which seems to fuel the development of the Company and its high customer service standards.
Tata power's share was priced at INR 439.95 on the NSE as of October 31, 2024. This figure represents a minor dip of 0.02% from last market’s closure. There is a market capital of INR 1.406 trillion and the stock has shown a beta of 0.80 for the last 5 years which suggests a mild level of risk associated with the stock. The company's P/E TTM (trailing twelve months) figure is 37.57 with an EPS of 11.71.
It earns forward dividend on every share of 0.45% on the most recent earnings release dated October 30, 2024 and ex-dividend date as of July 4, 2024. The performance of the company was not bad.
Tata Power Co Ltd reported notable growth in profitability and operational efficiency for Q2 2025, despite mixed results across some key metrics. Profit After Tax (PAT) before exceptional items surged by 51% year-over-year to INR 1,533 crore, indicating strong profit growth.
EBITDA also rose by 23% to INR 3,808 crore for the quarter while firsthalf EBITDA reached INR 7,158 crore, up 17% from the previous year. The company's PAT for the first half was up by 41% and amounting to INR 2,721 crore.
Despite an extended monsoon that softened power consumption, Tata Power achieved positive operational milestones:
Manufacturing Plant Capacity: The module plant operates at full capacity (4.3 GW), with the cell plant’s initial 2 GW starting production, boosting manufacturing efficiency.
Transmission Projects: Tata Power has four projects, out of which two will be commissioned by 2025 while two by 2026. The company also added a new 765 kV transmission line project in Odisha power system map.
Renewable and Hydro Projects: Currently Tata Power’s renewable plans to add 1,000 MW pump hydro project and 600 MW project in Bhutan with construction starting early January 2025.
Revenue and Profit Trends: Quarterly revenue saw a slight year-over-year decline of 0.26%, while profit increased by 5.83%. However, sequentially, revenue dropped 9.23%, with profit decreasing 4.57%.
EPS: The total EPS for the Q2 was ₹3.17, up by 15.7% YoY, which shows an enhanced overall profitability.
Operational Costs: Selling, General & Administrative expenses increased by 2.67% quarter-over-quarter and 4.61% year-over-year.
Analyst Sentiment: Same goes for the rating given by the analysts where 2 are recommending a ‘Strong Sell’, 6 suggesting ‘Sell’, 1 ‘Hold’, 7 ‘Buy’ and 4 ‘Strong Buy’ and so the overall rating comes out to be ‘Hold’.
However, there are still some important threats; including monsoon risks and regulation complications . But, strategic project expansion and increasing renewable energy portfolio show a good perspective for Tata Power.
As seen from the operating and financial performance of the Company, Tata Power currently portrays steady profitability along with some areas of leveraged growth. Below are the key highlights from the company’s latest financial metrics
Profit Margin: 5.90% reflecting the company’s ability to retain a portion of revenue as profit.
Return on Assets (ROA): 3.70% indicating moderate efficiency in asset utilization for generating earnings.
Return on Equity (ROE): 11.37% showing a reasonable return on shareholders’ investments.
Revenue (TTM): INR 634.89 billion, underlining the company’s significant revenue scale.
Net Income Available to Common (TTM): INR 37.46 billion, demonstrating strong earnings attributable to shareholders.
Diluted EPS (TTM): 11.71 suggesting steady earnings per share for the trailing twelve months.
Total Cash (MRQ): INR 96.56 billion, which offers strong liquid support for the current operation and investment.
Total Debt/Equity (MRQ): 144.12% a clear sign that the company has taken a very high level of leverage possibly to support expansion and growth.
Levered Free Cash Flow (TTM): Our results show that the company had a negative cash flow position post-debt service of INR 99.78 billion and could be due to capital expenditures or debt service requirements.
The following highlights of financial performance provide a picture of the profitability of the Tata Power and its investment plans which also depict the leverage and liquidity status of the firm. Although the free cash flow is negative, the strong ROE and the large revenue figures shows the firm's ability to remain strong and even grow.
Tata Power has outperformed the S&P BSE Sensex across various timeframes, as of October 31st 2024. This shows its strong returns and shareholder value creation. Here are the trailing total returns for Tata Power compared to the Sensex:
Year-to-Date (YTD) Return: Tata Power posted a return of +33.07%, significantly higher than the S&P BSE Sensex’s +9.90%.
1-Year Return: Tata Power achieved a return of +84.85%, outperforming the Sensex’s +23.83% return.
3-Year Return: Tata Power delivered a robust return of +109.83% while the Sensex returned +33.86%.
5-Year Return: Tata Power’s 5-year return soared to +701.96% compared to the Sensex’s +98.22%.
This consistent outperformance across multiple periods highlights Tata Power’s strong growth trajectory, making it an attractive investment relative to the broader market.
The price of Tata Power has found support this week at an ascending trendline, following resistance faced at the 494 high on September 27th, making it a bearish month of October. There is potential for a rebound from this support level, as the trendline has repeatedly proven to be a strong support, with price rejections at this level several times.
If the price rebounds from the current support, the next target will be the recent 494 high. However, if it breaks, though chances are minimal, it may drop to 400.
Tata Power has consistently demonstrated its leadership in the Indian power sector through robust financial performance, strategic project expansions, and a commitment to renewable energy. Despite facing short-term operational challenges, the company’s long-term outlook remains positive, supported by strong profit growth, efficient operations, and consistent market outperformance.
Technical analysis suggests that Tata Power’s stock could see further gains if the current support level holds, with potential targets reaching previous highs. With its diversified business model and forward-looking investments in sustainable energy, Tata Power continues to present a compelling opportunity for investors.
