Tata Power share price: Morgan Stanley retains equal weight, check fresh target

Shares of Tata Power are likely to remain in focus on Wednesday after global brokerage Morgan Stanley reiterated its "Equal Weight" rating on the stock and maintained a target price of Rs 399.

The brokerage's target remains below Tata Power's latest closing price of Rs 414, indicating limited upside from current levels despite the company's ongoing investments in renewables, transmission and distribution businesses.

Tata Power shares ended Tuesday's session at Rs 414, down 1.31 per cent or Rs 5.50 from the previous close.

Morgan Stanley highlights Mundra plant, growth roadmap

In its latest note, Morgan Stanley said Tata Power's Mundra power plant is currently operating at full capacity. The brokerage expects power purchase agreements (PPAs) linked to the project to be finalised by June, a development that could provide greater revenue and earnings visibility for the company.

The brokerage also outlined Tata Power's medium-term investment plans. The company has guided for total capital expenditure of approximately $2.15 billion over the next two years, with investments focused on transmission, distribution and renewable energy segments.

Morgan Stanley said Tata Power continues to prioritise renewable energy expansion as part of its long-term growth strategy. Alongside solar and wind projects, the company remains focused on battery energy storage systems and pumped hydro storage projects, which are expected to play an important role in India's energy transition.

While renewable energy remains the key focus area, the brokerage noted that Tata Power continues to view nuclear energy as a long-term opportunity.

Renewable capacity addition remains a key focus

Tata Power is targeting renewable energy capacity additions of 2.5 GW during FY27 and FY28. According to the brokerage, around 70 per cent of the land required for these projects has already been acquired, providing support to the company's expansion pipeline.

The company is also investing in strengthening its manufacturing capabilities. Morgan Stanley said Tata Power plans to allocate around $40 million towards next-generation solar manufacturing technology by 2029.

Apart from capacity expansion, the company is working on improving operational efficiencies across its distribution business. Tata Power has set a target of bringing distribution and collection losses below 10 per cent over time.

Q4 earnings and dividend

Tata Power reported a consolidated net profit of Rs 996 crore for the March quarter of FY26, down 4.5 per cent from Rs 1,043 crore in the same period last year.

The company said earnings were impacted by the temporary shutdown of the Mundra Power Plant. Operations at the plant were suspended from July 3, 2025, due to overhaul and maintenance work aimed at resolving technical issues.

Revenue from operations also declined during the quarter. It stood at Rs 14,900 crore, compared with Rs 17,096 crore in the year-ago period, marking a fall of 12.8 per cent.

Meanwhile, Tata Power's board recommended a final dividend of Rs 2.50 per equity share of face value Re 1 each for FY26.

The dividend is subject to shareholders' approval at the company's 107th Annual General Meeting scheduled for July 7, 2026. The company has fixed June 23, 2026, as the record date for determining eligible shareholders.