Tata Power shares crash 7% after Q4. What are Goldman Sachs and Motilal Oswal saying?
Revenue from operations during the March quarter declined 13% year-on-year to Rs 14,900 crore, compared with Rs 17,096 crore in the corresponding quarter of the previous year. Despite the fall in revenue, EBITDA for the quarter rose 10% to Rs 4,216 crore.
The renewable energy segment continued to remain a major growth contributor. Profit after tax before exceptional items from the renewables business rose 59% year-on-year to Rs 1,994 crore in FY26, while Q4 profit stood at Rs 406 crore. The solar manufacturing business’ FY26 profit more than doubled to Rs 857 crore. The company attributed the increase to ramp-up in module and cell manufacturing as well as yields exceeding 95%. The rooftop solar business reported a 150% jump in annual profit to Rs 499 crore.
Tata Power shares: Should you buy, sell or hold?
Brokerage firm Goldman Sachs has maintained a “Sell” rating on Tata Power with a target price of Rs 300, a downside of 28%. The brokerage said Tata Power’s Q4 profit after tax came in 13% below estimates and remained broadly flat year-on-year, impacted by weaker renewable energy generation and lower contribution from joint ventures. While the brokerage sees strong long-term growth visibility in rooftop solar and distribution, it flagged renewable energy generation execution as a key risk amid curtailments and transmission constraints. It also said the stock’s current valuation already factors in much of the optimism, with Tata Power trading at a premium to its historical price-to-book valuation.
Brokerage firm Motilal Oswal Financial Services has maintained a “Buy” rating on Tata Power with a target price of Rs 490, implying an upside potential of around 17%. The brokerage highlighted that rooftop solar installations doubled year-on-year to nearly 1.7 GW in FY26, with management expecting the rooftop solar business to grow at least 50-60% in FY27 while targeting a 20% market share over the next three years. Motilal Oswal also pointed to strong growth in the cell and module manufacturing business, where EBITDA more than doubled in FY26, and noted that the company has guided for renewable energy commissioning of 2.5 GW each in FY27 and FY28.
Brokerage firm JM Financial has reiterated its “Buy” call on Tata Power and retained a target price of Rs 485, indicating a potential upside of nearly 16%. The brokerage said the company’s key growth drivers remain its 4.9 GW cell and module manufacturing facility, strong momentum in the rooftop solar business backed by a healthy order book, and steady performance at Odisha discoms. JM Financial also noted that the operationalisation of the Mundra plant following the supplementary power purchase agreement with Gujarat is expected to support growth, with the brokerage forecasting a FY26-28 CAGR of 13% in revenue, 14% in EBITDA and 19% in profit after tax.
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