TATAPOWER - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.7

📊 Core Financials Analysis

Profitability & Returns

ROE: 11.0% and ROCE: 10.8% are moderate — acceptable for a utility company but not exceptional.

EPS of ₹12.4 is decent, though not high relative to the current price of ₹400.

PAT of ₹1,031 Cr. is stable QoQ, with a healthy profit variation of +18.2%, indicating consistent performance.

Debt & Liquidity

Debt-to-equity ratio of 1.75 is high — typical for capital-intensive power businesses, but worth monitoring for interest burden.

Dividend yield of 0.56% is modest, suggesting limited income focus.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 34.2 Overvalued vs. industry PE of 17.9

P/B Ratio ~3.57 Slightly elevated, but tolerable for growth-oriented utilities

PEG Ratio 1.66 Fairly valued relative to growth

Intrinsic Value Slightly below CMP Due to high debt and moderate return metrics

⚡ Business Model & Competitive Advantage

Business Model: Tata Power operates across generation, transmission, distribution, and renewable energy — with a growing focus on solar and EV infrastructure.

Strengths

Diversified energy portfolio with strong push into renewables.

Backing of Tata Group enhances credibility and execution.

Weaknesses

High leverage and valuation.

ROE/ROCE not compelling for aggressive investors.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹360–₹385 range would offer better margin of safety, especially near 200 DMA (₹393).

Long-Term View

Suitable for long-term investors bullish on India’s energy transition and Tata Power’s renewable strategy.

Hold for gradual compounding and ESG tailwinds.

Monitor debt levels and margin expansion for future upside.

Would you like a comparison with Adani Green, NTPC, or JSW Energy to evaluate how Tata Power stacks up in the energy sector?

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