Tata Power shares in focus after Q2 results. Why brokerages are bullish despite target price cuts

ETMarkets.com

The Tata Group's integrated power company’s revenue meanwhile grew 26% YoY to Rs 19,886 crore during the July-September quarter of the ongoing financial year 2027, from Rs 15,769 crore reported in the corresponding quarter of the previous financial year. Its EBITDA rose 5% YoY to Rs 4,245 crore during the quarter under review.

The quarterly performance was supported by broad-based growth across generation, renewables, transmission and distribution, and emerging consumer-focused green businesses. The company said regulated and long-term contracted businesses accounted for an increasing share of EBITDA, strengthening earnings resilience and providing greater predictability and visibility of cash flows and profitability.

Also read | Tata Power Q2 Results: PAT jumps 33% YoY to Rs 1,652 crore, revenue rises 26%

Nuvama on Tata Power share price

Nuvama Institutional Equities said Tata Power’s Q2 profit, post-minority and one-off gain, beat its estimate by 6%, driven by a 4x surge in coal profit of Rs 4 billion on higher realisation per tonne and 63% SA PAT (DSM and demand-led growth in traditional generation). This was however partially offset by large solar projects and group captive EPC EBITDA loss of Rs 130 million, as compared to a profit of Rs 1.8 billion in the same period of the previous financial year.

The brokerage sees limited downside as the current share price, which has dropped 15% since Q4 earnings announcement, factors full Kleros liability of around Rs 60 billion outgo and consequently higher debt for RE capex.

Nuvama remains constructive on the shares of Tata Power with a ‘Buy’ call, although it reduced its target price to Rs 416 apiece from Rs 421 apiece. The latest target price implies around 16% upside potential from the stock’s previous closing price of Rs 360 apiece.

Elara Capital also reiterated its ‘Buy’ rating on Tata Power shares but cut its share price target to Rs 485 apiece from Rs 504 apiece. The latest target price implies around 35% upside potential.

Also read | Tata Power says no provision needed for $650 million Kleros Award

Tata Power share price

Tata Power shares drop 1% in a week but gained 5% in a month. The stock has overall fallen nearly 6% in 2026 so far and 7% in one year.

In the longer term, the shares of the Tata Group company have delivered positive returns of more than 42% in three years and 50% in five years. The company has a market capitalisation of more than Rs 1.15 lakh crore.