The Tata Power Company Limited

Utilities — Utilities - Independent Power Producers · NSE

₹353.85+₹4.05 (+1.16%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Reasonable but unspectacular business quality, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of The Tata Power Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

The Tata Power Company Limited engages in the generation, transmission, distribution, and trading of electricity in India and internationally. It operates through four segments: Thermal & Hydro, Transmission & Distribution, Renewables, and Others.

IndustryUtilities - Independent Power Producers

SectorUtilities

Employees22,501

Annual revenue₹61,049 Cr

How does it make money?

Turns over ₹61,049 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹27 left at the operating level before interest, tax and depreciation. Each of its 22,501 employees supports ₹2.71 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.71 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., ADANI POWER LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 8.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE15.8%

What is the outlook?

21 analysts covering the stock expect revenue to grow about 6.6% and earnings to grow about 12.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+6.6%

Est. earnings growth+12.9%

Analysts21

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +13% while net margin moved -0% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+13%

Margin effect-0%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.68x is high — earnings must service borrowings before shareholders see anything
✗ Current ratio of 0.80 — short-term liabilities exceed short-term assets
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 2.3x — little room if profits dip

Quality vs. Valuation

Company Quality

37/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

45/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

29.3x

3Y Median

32.5x

40 monthly readings · mean 33.2x · range 22.9x–43.5x

Sector Median

14.6x

median of 3 sector peers

🟡Currently trading close to its 3y median of 32.5x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 100% above the peer median of 14.6x.

vs. its own history

Fair

32.5x median over 40 months · -10%

vs. sector peers

Expensive

14.6x median of 3 peers · +100%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.4x

PEG

7.43

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 23.9% to 27.1% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 11.3% to 8.5% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 51% over 3 years, from ₹52,923 Cr to ₹79,789 Cr.
🔴High leverageFinancial
Debt/Equity of 1.68x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.80 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 23.9% to 27.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 4.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 100% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 4.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 25%✓ 27.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹7,702 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✓ 4.1% CAGR
Latest reported year was 5.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹1.13 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

29.3x

Fair

Fairly valued against the generic band

P/B Ratio

2.86x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹12.07

Profitable

Profitable on a per-share basis

ROE

9.5%

Moderate

Moderate capital efficiency

ROCE

8.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.68x

High

High leverage

Revenue Growth (YoY)

5.6%

Modest

Modest growth

Profit Growth (YoY)

10.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.71%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹7,702 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

21.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

14.5%

Average

Average margins

Net Margin

6.1%

Average

Average bottom-line conversion

Current Ratio

0.80

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.39

Defensive

Steadier than the market

52W Range Position

15%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

355.5 / 364.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

38.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹54,118 Cr	₹60,388 Cr	₹64,128 Cr	₹61,049 Cr	+4.1%
EBITDA	₹12,930 Cr	₹13,322 Cr	₹14,717 Cr	₹16,572 Cr	+8.6%
EBITDA Margin	23.9%	22.1%	23.0%	27.1%	—
PAT (Net Profit)	₹3,336 Cr	₹3,696 Cr	₹3,971 Cr	₹3,747 Cr	+3.9%
EPS	₹10.43	₹11.56	₹12.41	₹11.71	+3.9%
ROE	11.6%	11.4%	11.1%	9.5%	—
ROCE	11.3%	10.3%	9.6%	8.5%	—
Total Debt	₹52,923 Cr	₹59,007 Cr	₹67,996 Cr	₹79,789 Cr	+14.7%
Free Cash Flow	-₹490 Cr	-₹737 Cr	-₹4,593 Cr	-₹7,702 Cr	—

🟢 Revenue has grown at 4.1% a year over 3 years.

🟢 EBITDA has grown at 8.6% a year over 3 years.

🟢 EBITDA Margin has risen from 23.9% to 27.1% over 3 years (+3.3 pts).

🟢 PAT (Net Profit) has grown at 3.9% a year over 3 years.

🟢 EPS has grown at 3.9% a year over 3 years.

🔴 ROE has fallen from 11.6% to 9.5% over 3 years (-2.1 pts).

🔴 ROCE has fallen from 11.3% to 8.5% over 3 years (-2.7 pts).

🔴 Total Debt has grown at 14.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.75 L Cr

Total Liabilities

₹1.27 L Cr

Cash & Equivalents

₹4,410 Cr

Operating Cash Flow

₹5,993 Cr

Capex

-₹13,695 Cr

Shareholding (proxy)

Institutional Holding

20.2%

Insider Holding

48.7%

Corporate Actions

Next Earnings

11 Nov 2026

Dividend Rate

₹2.5

Ex-Dividend Date

23 Jun 2026

Analyst Consensus

Recommendations

14 Buy · 5 Hold · 4 Sell

Target Price (Mean)

₹411.55

+16.3% vs CMP

Target Range

₹300 – ₹525

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
ADANI POWER LTD	26.5x	21.9%

Recent News

3 mixed3 general

Tata Power Company (TATAPOWER) Share Price Rises 2.19% as Data Centre Pipeline Draws Attention

Univest, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Tata Power PAT rises 11% in Q1FY27; full year seen 4.5-5x stronger

scanx.trade, 15 Oct

Vedanta Power vs Tata Power vs Adani Power: Which Stock Is the Ultimate Winner in Power Stock Battle?

Goodreturns, 16 Oct

Tata Power Faces 13.5% Downside As Goldman Sachs Sticks To 'Sell' Despite Target Hike; Here's Why

NDTV Profit, 15 Oct

Tata Power Advances 2.8 GW Data Centre Pipeline; Shares Gain 1.20%

HDFC Sky, 14 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Tata Power Share Price Falls 1% Despite Strong Q1 Results

India Infoline, 28 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingBusiness Quality · Valuation · Risk

WeakFinancial Health · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑