Tata Power to bid for UP discoms to expand T&D presence, plans Rs 25,000 crore capex this fiscal

Tata Power shares in focus after revealing 24% YoY jump in net profit

Shares of Tata Power are quiet in trade on May 15 after the company reported strong Q4FY25 results and outlined a roadmap to scale core businesses, particularly in power distribution and clean energy.

Tata Power said it has plans to expand electricity distribution footprint and said during the post-earning call that it intends to bid for two discoms in Uttar Pradesh - Dakshinanchal Vidyut Vitran Nigam and Purvanchal Vidyut Vitran Nigam - once tender documents are issued.

These discoms will be carved into six circles, with the state likely opting for a public-private partnership model, where private players will hold majority stake.

This bid for Discoms aligns with Tata Power’s broader strategy to grow its transmission and distribution (T&D) business, which contributes the most to its revenue and profit. Currently, the company serves 1.25 crore customers across Mumbai, Delhi, Ajmer, and Odisha, and is targetting a base of 4 crore over the next five years.

The company has said that it is preparing to enter the small modular nuclear reactor (SMR) space, pending legal amendments to the Nuclear Power Act that would allow private sector participation. “We are preparing with site evaluations, water arrangements, and technology reviews, but our next steps depend on legal clarity,” said MD & CEO Praveer Sinha. Tata Steel and Tata Motors are expected to be among the industrial clients for this clean energy initiative.

Tata Power also announced a capital expenditure plan of Rs 25,000 crore for FY26. Of this, 50 percent will go toward renewables, 20 percent to generation, and 30 percent to T&D. In FY25, it spent Rs 16,000 crore - lower than the targeted Rs 20,000 crore - due to delays in renewable and transmission projects.

Tata Power also plans to exit Tata Projects, the EPC arm that built the new Parliament building. “We need capital for growth in renewables, hydro, transmission, and distribution. That’s why we’ve decided not to allocate funds to non-core ventures,” Sinha said.

Tata Power posted a 24 percent year-on-year rise in consolidated net profit to Rs 1,306 crore for the March quarter, compared to Rs 1,045.6 crore in the same period last year. Revenue grew 7.9 percent year-on-year to Rs 17,096 crore, while EBITDA surged 39.2 percent to Rs 3,245.4 crore, reflecting stronger operational efficiency. Operating margins expanded to 19 percent from 14.7 percent a year ago.