Markets India
Tata Power's shares surged 2% to ₹367.40 after reporting a 33% YoY net profit jump, though brokerages trimmed target prices amid coal profits and renewable energy losses.
Tata Power reported a record ₹1,652 crore in Q2 FY27 net profit, up 33% year-on-year, driven by robust coal margins and regulated business growth. Revenue climbed 26% YoY to ₹19,886 crore as the company's market cap surpassed ₹1.15 lakh crore. Brokerages maintained 'Buy' ratings but adjusted target prices: Nuvama cut its price target to ₹416 from ₹421, while Elara Capital lowered it to ₹485 from ₹504. These revisions reflect concerns over Kleros liability and higher debt for renewable energy capex, which caused a 15% stock drop since Q4 earnings.
The EBITDA growth of 5% YoY to ₹4,245 crore underscores resilience in traditional generation but highlights risks from solar project losses. Nuvama noted a 4x surge in coal profits reaching ₹4 billion and an EBITDA loss of ₹130 million from renewable projects. While regulated businesses provide stable cash flow, the company faces pressure to balance growth with debt management amid rising liabilities.
Analysts emphasize that Tata Power's expansion into renewables offers short-term upside potential but requires careful navigation of financial risks. The stock gained 5% in a month and 7% year-to-date despite these challenges, signaling investor confidence in its long-term strategy.
Tata Power's Q2 results highlight strong profitability amid strategic shifts, with brokerages balancing optimism about growth against financial risks from renewable investments.
Topics: Finance Markets, Corporate Performance, Energy Sector, Stock Analysis, Renewable Energy Investment
#TataPowerResults #StockMarketIndia #EnergySectorGrowth #BrokerAnalystRatings #RenewableEnergyChallenges
Source: ET Markets
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