Nomura sees 31.3% upside in Tata Power, maintains buy on robust renewable and T&D growth

Nomura has reiterated a buy rating on Tata Power, setting a target price of ₹560, which implies an upside of 31.3% from the current market price of ₹426.50. Tata Power’s Q2 results exceeded consensus estimates, with consolidated EBITDA reaching ₹37.5 billion. This performance was primarily driven by:

  1. 23% year-over-year growth in Renewables EBITDA to ₹10 billion,
  2. 30% year-over-year growth in Transmission & Distribution (T&D) EBITDA to ₹14.4 billion, and
  3. A substantial 7.5x increase in the Others segment EBITDA to ₹3.7 billion, supported by a low base.

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While thermal generation EBITDA declined by 11% year-over-year to ₹9.9 billion, the strong growth in renewable energy and transmission segments helped offset this. Tata Power is also expected to export 1GW of modules from its integrated module plant, further supporting its renewable energy outlook.

Disclaimer: This information is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor for any investment decisions.