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| Tata Power shares gain after Motilal Oswal’s Buy rating with 20% upside target amid sector reforms. |
Tata Power Stock Gets ‘Buy’ Call from Motilal Oswal — 20% Upside Target Set Amid Power Sector Reforms
In a fresh boost to the energy sector, Motilal Oswal Financial Services (MOFSL) has reaffirmed its ‘Buy’ rating on Tata Power Company Limited, projecting a target price of ₹480 — an upside potential of around 20% from current levels. The brokerage firm cited strong growth prospects driven by government reforms and the company’s leadership in renewable and distribution businesses.
As of October 28, 2025, Tata Power’s shares closed at ₹400.25, up 0.72% on the NSE, valuing the company at over ₹1.27 lakh crore.
Government Push and Power Reforms Drive Optimism
According to Motilal Oswal, Tata Power is set to benefit from the government’s upcoming Electricity (Amendment) Bill 2025, which aims to liberalise power distribution. The reforms could enable multiple operators to function on a single network, enhancing competition, improving efficiency, and ultimately lowering power costs for consumers.
This shift is expected to create new growth avenues for private players like Tata Power, which is already preparing to expand its operations across 40+ districts in Uttar Pradesh. The company’s proven track record managing distribution networks in Odisha gives it a strong edge in bidding for new territories.
Growth in Renewables and Energy Storage
Tata Power continues to diversify its portfolio, focusing heavily on renewable energy and energy storage. Its renewed Mundra power plant agreement and recent progress in solar, hydro, and hybrid projects have further strengthened its business fundamentals.
Currently, the company’s operational capacity is composed of 56% thermal, 26% solar, and 18% hydro, wind, hybrid, and WHRS projects. Tata Power also manufactures solar rooftops and is actively expanding EV charging stations across India, aligning with the government’s clean energy vision.
Financial Performance
For Q1 FY26, Tata Power reported a revenue increase from ₹17,294 crore to ₹18,035 crore year-on-year.
Net profit also rose from ₹1,189 crore to ₹1,262 crore during the same period. The company posted a return on equity (RoE) of 11% and return on capital employed (RoCE) of 10.8%.
With a P/E ratio of 31.07, Tata Power trades slightly above the industry average of 25.19, reflecting investor confidence in its long-term growth trajectory.
Analyst View and Risks
Motilal Oswal believes Tata Power’s balanced business model, strategic investments, and government-linked opportunities make it a strong long-term bet in India’s evolving power sector.
However, the brokerage also highlighted key risks such as:
- Persistent challenges at Mundra power plant
- Possible valuation pressure within the renewable energy space
Despite these risks, analysts maintain a positive outlook, emphasizing Tata Power’s steady execution and diversified revenue streams.
About Tata Power
Tata Power Company Limited, part of the Tata Group, operates across power generation, transmission, and distribution. It has been accelerating its transition toward sustainable and clean energy solutions while expanding its footprint in solar, hydro, wind, and EV infrastructure.
Disclaimer
The investment views expressed are solely those of brokerage firms and analysts. Investors are advised to consult certified financial advisors before making any investment decisions.
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