CLSA has maintained its hold rating on Tata Power Company Ltd with a target price of ₹369 per share after the company’s Q2FY26 results were impacted by multiple one-offs and operational headwinds.
The brokerage said the quarter was hit by the shutdown of the Mundra independent power plant (IPP), weak performance from Indonesian coal mines, and losses in the renewable energy IPP and Tata Projects divisions, resulting in a 26% year-on-year decline in reported profit after tax.
Core profitability was dragged by the renewable energy IPP business — a key long-term catalyst — which saw profits drop 53% year-on-year even as capacity rose 14%, due to lower solar and wind utilisation and rising interest rates. Treasury income, however, was up 56% year-on-year, cushioning the earnings impact.
Coal profit per tonne fell 67% year-on-year on the back of weaker seaborne coal prices. On the positive side, the Odisha distribution business, solar EPC, and module manufacturing operations performed well, supported by India’s solar module import restrictions. CLSA said the company’s long-term clean energy strategy remains intact, but near-term volatility in renewables and project execution may limit upside.
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