Target: ₹288

CMP: ₹262.55

Tata Power’s Q2 consolidated revenue rose 12 per cent y-o-y to ₹15,700 crore versus ₹14,000 crore in Q2-FY23. Declining profits from its coal mining business, due to decreasing coal prices, have been offset by enhanced performance from its generation and T&D businesses.

Revenue from its Renewables business rose 33 per cent y-o-y to ₹2,146 crore. Revenue from Generation and Transmission increased 3 per cent and 5 per cent, respectively to ₹4,973 crore and ₹9,454 crore. PAT rose 8.8 per cent to ₹102 crore and EBITDA came in at ₹3,100 crore versus ₹1,800 crore in Q2-FY23. Net debt decreased 3 per cent q-o-q to ₹36,600 crore. Net debt-to-equity stood at 1.02 and net-debt-to-EBITDA at 2.65 in Q2-FY24. Tata Power has set a capex target of ₹12,000 crore for FY24, with focus on RE projects. It incurred a capex of ₹2,250 crore in Q2-FY24. T

Tata Power seeks to: scale-up RE capacity to 15.0GW by FY25 from the current 3.9GW, focus on power distribution, and seize opportunity in solar EPC.

We introduce FY26 estimates and retain our positive stance – We raise our TP to ₹288 from ₹272 and revise rating to Accumulate from Buy on SOTP (FY26E). as the stock has run up 9 per cent from August 2023

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