Tata Power Company Ltd. delivered an in-line first quarter for fiscal 2027, with brokerage ICICI Securities holding firm on its Buy rating and an unchanged, sum-of-the-parts target of Rs 485 a share. The call, issued July 29, points to broad-based earnings momentum across the utility's generation, distribution and renewable-manufacturing arms, even as a long-running dispute over the coal-fired Mundra plant edges toward resolution.

Quarterly Numbers Land In Line With Estimates

The Mumbai-based conglomerate posted consolidated revenue of Rs 189 billion, up 8% from a year earlier, alongside EBITDA of Rs 38.6 billion, also an 8% year-on-year gain. Profit after minority interest rose more sharply, climbing 11% to Rs 11.8 billion, a result the brokerage's analysts — Mohit Kumar, Mahesh Patil, Abhinav Nalawade and Nidhi Shah — described as matching their forecast.

Mundra Overhang Begins to Lift

The quarter marked the end of a nine-month drag tied to the Mundra coal plant, whose 4.2-gigawatt capacity has struggled since import-coal costs made its original fixed-price contracts commercially unworkable. Tata Power has now secured a supplementary power-supply agreement covering roughly half the plant's capacity with the state of Gujarat, and expects to finalize arrangements with its remaining offtaker states within the next couple of months. Cabinet approvals from three additional states are anticipated in August, with a fourth expected in September.

Under interim Section 11 provisions, the plant has been compensated on a cost-reflective, no-profit basis. Management told analysts on the earnings call it is confident Mundra can run continuously through 2038 provided full offtake and a favorable merit order are secured — a markedly more constructive tone than the plant's near-total idling after its earlier regulatory extension lapsed.

Renewable Buildout: Slow Start, Steady Target

Tata Power added just 226 megawatts of renewable capacity in the quarter, bringing its installed base to 6.7 gigawatts — a muted pace the brokerage attributes partly to roughly 5% industry-wide curtailment in Rajasthan and Gujarat, along with a delayed monsoon that weighed on wind output. An additional 500 megawatts is complete and awaiting only transmission-line hookup, expected within one to two weeks. Management reiterated its guidance of 2.5 gigawatts of renewable capacity addition for the full fiscal year, with a stronger second quarter anticipated.

Solar Manufacturing and Rooftop Business Outperform

Two segments stood out on the earnings call. Solar cell and module manufacturing posted a record 1,001 megawatts of module production in the quarter, with segment EBITDA and profit surging 113% and 287% year-on-year, respectively, to Rs 6.3 billion and Rs 3.7 billion. Module output is described as having largely peaked, while cell production still has room to scale, with yields running at 96.3% for modules and 87% for cells.

Rooftop solar delivered what the company called a record quarter, installing 371 megawatts-peak — up 37% year-on-year — with revenue climbing 64% to Rs 13.5 billion. Management is targeting 60–70% revenue growth in the segment for the full year and aims to lift market share from roughly 13% toward 25% over the next three to four years, with a longer-term goal of Rs 300 billion in rooftop revenue by fiscal 2030.

Pipeline: Hydro, Storage and a Nuclear Option

Beyond the immediate quarter, Tata Power's growth pipeline spans several under-construction assets:

• Bhivpuri pumped-storage project — 1,000 megawatts under construction in Maharashtra, with phased commissioning from early calendar 2029; the company has secured a letter of award from India's Solar Energy Corporation for 324 megawatts of the plant's capacity.
• Bhutan hydro expansion — a power-purchase agreement for the 600-megawatt Khorlochhu project has been signed at a tariff of Rs 6.75 per kilowatt-hour, targeting commissioning by calendar 2030; financial closure on the World Bank-funded, 1,125-megawatt Dorjilung project is expected within three months.
• Solar wafer and ingot manufacturing — a planned 10-gigawatt backward-integration project, layered atop the company's existing 4.3-gigawatt cell and module plant.
• Nuclear power — still at a preliminary stage, with land, geotechnical and water-availability studies underway ahead of formal government rules.

Capital expenditure came in at Rs 53 billion for the quarter, with guidance of Rs 60–65 billion for the second quarter and full-year fiscal 2027 capex of Rs 250 billion, roughly half of it earmarked for renewables.

Valuation and Levels for Investors

ICICI Securities arrives at its Rs 485 target through a sum-of-the-parts framework, valuing the distribution, generation, transmission, coal-mining, storage and renewables businesses separately before consolidating them into a per-share figure.

Key Risks

ICICI Securities flags two principal risks to its thesis: delays in executing renewable-energy projects, and delays in commissioning pumped-storage and hydro assets — both central to the company's medium-term earnings trajectory.