Tata Power shares take biggest hit in 2 years; should investors worry?

Tata Power shares (TATAPOWER) took centre stage on Dalal Street on Wednesday, falling as much as 6.6 per cent to Rs 391 apiece, after the Tata group power generation company staged a worse-than-expected performance for the final three months of FY26. At least two brokerages maintained neutral views on the Tata group stock, with targets implying limited upside from current levels.

The slide marked the Tata group stock's worst single-day fall since June 4, 2024.

Earlier in the day, Zee Business Managing Editor Anil Singhvi gave a 'sell' call on Tata Power futures for targets of Rs 412, Rs 405 and Rs 400 with a stop loss at Rs 426, citing extremely weak results and a disapponting operational performance.

How brokerages view Tata Power post-Q4 FY26 results

ICICI Securities maintained a 'buy' call on the stock after the earnings announcenent, with a target price of Rs 485.

Noting that Tata Power earnings were in line with consensus estimates, the brokerage said that medium-long-term growth levers are in place for the company. "It is building an almost fully integrated renewable business comprising generation, solar rooftop and EPC, solar cell and modules, and the planned solar wafer/ingot manufacturing. It is targeting 2.5GW renewable capacity addition each in FY27 and FY28. Its execution pipeline also includes hydro, PSP and transmission projects, with a planned nuclear power foray," it said in a research note.

5 growth levers in Tata Power

The brokerage also stated that Tata Power has a diverse set of growth levers:

• It is looking to ramp up its RE capacity, with plans to add 2.5GW each in FY27 and FY28
• Strong growth potential for rooftop solar business
• Under-construction transmission projects and PSP projects of 2.8GW
• Under-development hydro projects in Bhutan
• A 10GW solar wafer and ingot capacity is also in pipeline

Tata Power Q4 FY26 results

After market hours on Tuesday, Tata Power reported a 4.4 per ccent year-on-year decline in its net profit to Rs 996 crore. Its top line fell 12.8 per cent to Rs 14,900 crore, according to a regulatory filing.

While the net profit was in line with analysts' expectations, the top line failed to meet the mark.

According to Zee Business analysts, Tata Power was estimated to register a net profit of Rs 849 crore and revenue of Rs 15,556 crore.

Operational performance

Its March-quarter EBITDA fell 19.9 per cent to Rs 2,598 crore and margin shrank to 17.4 per cent from 19 per cent a year ago.

Analysts had pegged the company's quarterly EBITDA at Rs 3,647 crore and margin at 23.4 per cent. Read more on Tata Power results

Tata Power FY26 earnings

For the year ended March 31, Tata Power's reported PAT stood at a record Rs 5,118 crore, marking a 7.0 per cent rise over the previous year.

Its top line declined 1.3 per cent to Rs 63,681 crore, while EBITDA went up 11 per cent Rs 16,090 crore.

The company said it supplied 49.52 billion units of electricity to the grid and its Discoms supplied approximately 47.92 billion units to consumers during the year.

Tata Power dividend per share

The Tata group company declared a dividend of Rs 2.5 per share -- a 250 per cent payout given the face value of Re 1 per share.