ICICI Securities has issued a BUY recommendation on Tata Power (TPWR), maintaining a target price of Rs 465 from the current market price of Rs 382, as detailed in their 16 December 2025 company update. This assessment underscores Tata Power's strategic pivot toward renewables, transmission expansion, and distribution efficiencies amid challenges like the Mundra plant shutdown. Key highlights include anticipated Mundra resolution by year-end, a Rs 65bn solar manufacturing push, robust Odisha discom turnaround with ATC losses plummeting, and ambitious 30GW clean energy capacity by FY30. Financials project revenue escalation to Rs 811bn by FY27E, with EBITDA margins expanding to 21%, positioning TPWR as an end-to-end power solutions behemoth. Investors eye near-term catalysts like PPA finalization and capex deployment of Rs 1.25trn through FY30.

Resolving Mundra Impasse: Catalyst Ahead

Tata Power's 4GW Mundra ultra-mega power project, reliant on imported coal, has idled since Q1FY26 post-expiry of Section 11 emergency provisions, previously sustaining cost-plus tariffs. Management exudes optimism, citing active negotiations with Gujarat procurers for a supplementary Power Purchase Agreement (PPA), bolstered by high-powered committee approvals and state cabinet nods. Restart looms by end-December 2025, potentially unlocking sustained cash flows despite fixed-price legacy constraints exacerbated by Indonesian coal duties. This resolution remains pivotal, with FY26 estimates prudently factoring lower availability.

Key Monitorables: Final PPA contours, plant ramp-up velocity, and tariff viability amid volatile coal dynamics.​

Solar Manufacturing Ascendancy

TPWR fortifies its photovoltaic value chain, having stabilized a 4.3GW cell-module facility in FY25, now scouting sites for a Rs 65bn 10GW ingot-wafer plant with 18-24 month gestation. Synergies with EPC and utility-scale projects promise margin accretion, while rooftop solar surges—H1FY26 revenues hit Rs 19bn (EBITDA Rs 2.9bn), targeting Rs 40bn FY26, Rs 70bn FY27, and Rs 110bn FY28. Booked 907MWp orders signal 38% CAGR through FY30.

This vertical integration mitigates supply risks, enhances competitiveness in India's solar boom, and aligns with RE ambitions: 1.5GW FY26 addition, phasing out third-party EPC.​

Odisha Discom Triumph: Tech-Driven Revival

Tata Power's Odisha foray—TPCODL, TPSODL, TPNODL, TPWODL—exemplifies operational alchemy, slashing Aggregate Technical & Commercial (ATC) losses via SCADA, ADMS, infrastructure capex, and smart metering (0.6mn installed, 100% by 2032). Site visits unveiled a digitized nerve center managing 1.1GW demand across 93,900 transformers, 250 automated substations, and cyclone-resilient networks fueling 13-15% CAGR. Regulated equity surges 62% FY25-30E to Rs 30.9bn.

Analyst Meet Blueprint: Ambitious Horizons

Management unveiled a Rs 1.25trn FY26-30 capex odyssey—89% non-regulated—targeting 30GW operational clean energy (20GW RE, 9GW PSP, hydro). Highlights: Bhivpuri 1GW PSP COD Aug28 (Rs 56.7bn); Shirwata 1.8GW 2029; Bhutan hydro 1.7GW (NTPC PPA, World Bank aid); HVDC transmission bids; parallel licensing in Pune, eyeing UP/Rajasthan RFPs. Rooftop order book: Rs 11bn executable quarterly.

Capex Breakdown (Rs bn FY26-30): Renewables 53, PSP 11, Thermal excl Mundra 31, Distribution 3, Equity (Bhutan) 2.​

Financial Fortitude and Projections

ICICI's model forecasts resilient growth: FY26E revenue Rs 704bn (9.6% YoY), EBITDA Rs 143bn (20.4% margin), PAT Rs 42bn (EPS Rs 13.1). FY27E accelerates to Rs 812bn revenue, Rs 171bn EBITDA (21% margin), PAT Rs 52bn (EPS Rs 16.2). Balance sheet robust—net debt/EBITDA 2.5x FY26E—underpins RoE 11.1% FY27E. Free cash flow strengthens post-capex normalization.

Sum-of-the-Parts Valuation: Rs 465 Target

SoTP dissects TPWR's mosaic: Renewables Rs 263/share (Solar Mfg Rs 92, TPR Rs 113), Distribution Rs 76 (Mumbai Rs 46, Odisha Rs 17), Storage Rs 26, Coal Rs 32, Transmission Rs 17. Total enterprise value Rs 1.486trn yields Rs 465/share (29.8x FY26E PE). At CMP Rs 382, implies 22% upside.

Investor Levels:

Support: Rs 360-370 (52-week low vicinity, Odisha momentum buffer).

Resistance: Rs 430 (52-week high), Rs 465 (target).

Entry: Rs 375-385 for 20-25% returns in 12 months.

Stop-Loss: Rs 350 (Mundra delay risk).
​

Risks and Strategic Edge

Downside looms from Mundra PPA delays, RE execution lags, or PSP clearances. Yet, TPWR's diversified footprint—generation, discoms, trading, manufacturing—mitigates volatilities. ESG score dips marginally to 68.1, but environmental strides (56.0) bolster appeal. Promoter holding steady at 46.9%. This BUY reiterates Tata Power's metamorphosis into India's premier integrated utility.