Buy Tata Power; target of Rs 476: Motilal Oswal

Motilal Oswal's research report on Tata Power

TPWR’s 4QFY25 EBITDA came in 7% above our estimate at INR32.5b, while adjusted PAT was in line with our est. at INR9.7b. Healthy 4Q EBITDA was backed by: 1) robust improvement in the Orissa distribution business, 2) strong performance in the Mundra, coal and shipping businesses, 3) higher contribution from both traditional and renewable generation. The cell and module business has continued to rampup well, with utilization now at elevated levels for both products. However, new RE capacity installation in 4Q stood at 166 MW, which was lower than the expectation of ~0.6GW.

Outlook

The valuation of TPWR is segmented across various business units, leading to a target price of INR476/share.

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