Nuvama upgrades Tata Power to 'Hold' on improved FY30 growth visibility

Domestic brokerage Nuvama has upgraded Tata Power to ‘Hold’, citing improved visibility on achieving over 30GW of installed capacity by FY30E as large renewable and pumped storage projects in the pipeline mature toward the end of the decade. The brokerage has set a target price of ₹385 per share.

 

“We are upgrading Tata Power to ‘Hold’ on improved visibility of 30GW+ target capacity by FY30E (26GW already won), valuation rollover to FY28E and probable cash breakeven for Mundra UMPP,” said Subhadip Mitra, Vikram Datwani, Mahir Moondra and Divyam Sureka of Nuvama, in a note dated December 16, 2025.

 

The brokerage’s view followed an analyst meet held at Tata Power’s Odisha Technology Centre, where management reiterated its long-term growth roadmap. Tata Power maintained its FY30E targets of 30-35GW of capacity, including nearly 20GW of renewable energy, and profit after tax (PAT) of about ₹10,000 crore. Of the targeted capacity, 26GW has already been secured, strengthening execution confidence.

 

Renewable capacity additions are expected to accelerate to 2-2.5GW per annum from FY27E, compared with around 1.2GW planned for H2FY26. While near-term growth remains modest, Nuvama analysts highlighted that visibility improves materially in FY29-30E as large pumped storage projects (PSPs) move closer to commissioning.

 

Tata Power has around 9GW of PSP capacity under construction, which could enable nearly 30GW of round-the-clock (RTC) renewable supply. Key projects include the Bhivpuri PSP (1GW, capex ₹5,700 crore) and the Shirawata PSP (1.8GW, capex ₹7,850 crore), both targeted for commissioning by FY29-30E.

 

The company has guided for group capex of approximately ₹25,000 crore per annum until FY30E, with nearly 65 per cent directed toward renewables. Cumulative renewable capex over five years is estimated at around ₹1.25 trillion. Despite the elevated investment cycle, Tata Power aims to maintain a net debt-to-equity ratio of 1.5-2x.

 

Regulated businesses continue to provide earnings support, analysts said. In Odisha distribution, a turnaround is underway, with AT&C losses improving by about 1.7 per centage points year-on-year in H1, while arrears collections reached nearly ₹2,000 crore, double the targeted level. Although losses remain high at around 33 per cent, investments in automation, SCADA systems and billing upgrades point to structural improvement. Regulated equity in Odisha is projected to grow 62 per cent by FY30E versus FY25, supported by annual capex of ₹1,300-1,400 crore.

 

In transmission, Tata Power plans to bid for two HVDC projects valued at ₹25,000-30,000 crore each, alongside 765kV transmission lines. One HVDC win has been factored into FY30E estimates. Distribution capex outside Odisha remains steady, with Mumbai seeing annual investments of ₹1,000-1,500 crore, while regulatory asset resolution in Delhi enables higher spending.

 

Nuvama noted that although growth is largely back-ended beyond FY28E, the Tata Power stock offers limited downside at current levels, having delivered near-zero returns over the past two years and trading about 13 per cent below its 52-week high. Improved cash breakeven prospects at Mundra UMPP further support the upgrade to ‘Hold,’ Nuvama analysts said.

 

Disclaimer: The view/outlook has been suggested by Nuvama. Views expressed are their own.