Tata Power shares rise 2% after Q2 results. Why brokerages are bullish despite target price cuts

Shares of Tata Power rose more than 2% on Thursday after the company reported a 33% year-on-year (YoY) jump in net profit to Rs 1,652 crore for the second quarter of FY27, with brokerages maintaining their ‘Buy’ ratings as rise in coal profits offset large solar projects and group captive EPC losses.

Tata Power shares rose to Rs 367.40 apiece on the NSE. Tata Group's integrated power company’s revenue grew 26% YoY to Rs 19,886 crore during the July-September quarter of the ongoing financial year 2027, from Rs 15,769 crore reported in the corresponding quarter of the previous financial year. The company's EBITDA rose 5% YoY to Rs 4,245 crore during the quarter under review.

The quarterly performance was supported by broad-based growth across generation, renewables, transmission and distribution, and emerging consumer-focused green businesses. The company said regulated and long-term contracted businesses accounted for an increasing share of EBITDA, strengthening earnings resilience and providing greater predictability and visibility of cash flows and profitability.

Also read | Tata Power Q2 Results: PAT jumps 33% YoY to Rs 1,652 crore, revenue rises 26%

Nuvama on Tata Power share price

Nuvama Institutional Equities said Tata Power’s Q2 profit, post-minority and one-off gain, beat its estimate by 6%, driven by a 4x surge in coal profit of Rs 4 billion on higher realisation per tonne and 63% SA PAT (DSM and demand-led growth in traditional generation). This was however partially offset by large solar projects and group captive EPC EBITDA loss of Rs 130 million, as compared to a profit of Rs 1.8 billion in the same period of the previous financial year.

The brokerage sees limited downside as the current share price, which has dropped 15% since Q4 earnings announcement, factors full Kleros liability of around Rs 60 billion outgo and consequently higher debt for RE capex.

Nuvama remains constructive on the shares of Tata Power with a ‘Buy’ call, although it reduced its target price to Rs 416 apiece from Rs 421 apiece. The latest target price implies around 16% upside potential from the stock’s previous closing price of Rs 360 apiece.

Elara Capital also reiterated its ‘Buy’ rating on Tata Power shares but cut its share price target to Rs 485 apiece from Rs 504 apiece. The latest target price implies around 35% upside potential.

Also read | Tata Power says no provision needed for $650 million Kleros Award

Tata Power share price

Tata Power shares drop 1% in a week but gained 5% in a month. The stock has overall fallen nearly 6% in 2026 so far and 7% in one year.

In the longer term, the shares of the Tata Group company have delivered positive returns of more than 42% in three years and 50% in five years. The company has a market capitalisation of more than Rs 1.15 lakh crore.

Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimershere.