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Informist, Sunday, Jul. 26, 2026

           

By Sunil Raghu

 

AHMEDABAD – Tata Power Co. Ltd. is expected to report a year-on-year jump in its net profit for the June quarter owing to the resumption of its 4,000-megawatt power plant at Mundra in Gujarat. The company's revenues are also expected to see a rise, primarily in the renewable energy segment, according to analysts.

 

The government's decision to reinforce a specific legal provision that ensured sustained operations of Tata Power's Mundra power plant from April and supplementary power purchase agreements with state governments buying power from the plant have helped the company's net profit and revenue to grow.

 

Tata Power's consolidated net profit for the June quarter is expected to rise 8% on year to INR 11.5 billion, according to the average of estimates from eight brokerages. On quarter, the bottom line is seen rising 6%. The highest estimate for Tata Power's consolidated net profit is INR 12.75 billion from Elara Securities (India) Pvt. Ltd. and the lowest is INR 10.46 billion from BofA Securities.

 

Tata Power's consolidated revenues for the reporting quarter are likely to rise 3% on year and 24% on quarter to INR 185 billion. The highest estimate for the revenue is INR 191.3 billion from Nuvama Wealth Management Ltd. and the lowest is INR 175.9 billion from Kotak Securities Ltd.

 

Motilal Oswal Financial Services Ltd. sees a 2% year-on-year growth in Tata Power's revenues, driven by the contribution from additional renewable assets commissioned in the June quarter , along with higher revenues from the solar cell manufacturing and rooftop solar business. The brokerage sees total revenue growth being partly offset by a dip in engineering, procurement, and construction revenue.

 

Brokerages see the resumption of the Mundra plant as a key point of relief for Tata Power's financial performance in the June quarter. Tata Power has five supercritical units of 800 megawatts each at Mundra. The plant accounts for nearly a fourth of the company's total electricity generation capacity of 16 gigawatts.

 

Tata Power supplies electricity from its Mundra plant to Gujarat, Rajasthan, Maharashtra, Haryana, and Punjab. These power purchase agreements are based on a fixed tariff and do not allow the company to pass on any increase in the cost of imported coal to the buyers. Over the years, the company has shut operations at the power plant more than once, as it made huge losses. In March, the company announced  a new supplemental power purchase agreement with the Gujarat government that allowed it to pass on cost of fuel. Tata Power said it would enter into similar arrangements with other states too.

 

Alternatively, the company can operate the plant only when the government imposes Section 11 of The Electricity Act, 2003. The provision allows the government to ask power producers to maintain operations to prevent any outages. The provision has been extended several times since 2003. It also allows power producers to recover the actual cost of fuel from buyers. The government imposed Section 11 from Apr. 1 to meet electricity needs during the summer and compelled Tata Power to restart operations at Mundra.

 

The company's consolidated earnings before interest, tax, depreciation, and amortisation for the June quarter are estimated to decline to INR 38 billion, according to the average of seven estimates. The EBITDA estimate of INR 42 billion from Nuvama is the highest while that of INR 36 billion by Kotak Securities is the lowest. In the June quarter last year, the company's EBITDA was INR 39 billion.

 

Tata Power will detail its earnings Monday. Brokerages will monitor the company's performance in the distribution business, pace of commissioning of renewables capacity, and the status as well as impact of the signing of supplementary power purchase agreements for the Mundra plant with multiple state governments across western and northern India.

 

Friday, shares of Tata Power closed at INR 374.40 apiece on the National Stock Exchange, down 0.5% from Thurssday. The stock is down 10% since the company detailed its March quarter earnings on May 12.

 

Of the eight research reports on the company available with Informist, six have a "buy" call on the stock, with an average target price of INR 485. This is over 28% higher than the current stock price. Two brokerages have a "hold" recommendation.

 

Following are the Apr-Jun earnings estimates for Tata Power from eight brokerages in INR billion, in descending order of the net profit estimate:

 

Brokerage	Net Sales	Net Profit	EBITDA
Elara Securities (India) Pvt. Ltd.	182.61	12.75	37.59
JM Financial Institutional Securities Pvt. Ltd.	188.88	12.53	39.83
360 ONE Capital Market Pvt. Ltd.	187.64	12.00	--
Nuvama Wealth Management Ltd.	191.29	11.38	41.68
Prabhudas Lilladher Pvt. Ltd.	185.76	11.23	37.06
Motilal Oswal Financial Services Ltd.	18.50	10.80	38.00
Kotak Securities Ltd.	175.93	10.77	36.48
BofA Securities	186.32	10.46	38.36
Average	185.24	11.48	38.43

 

End

 

Edited by Shubhayan Bhattacharya

 

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