IGI Logo

Long-term value creation on track

• We attended Tata Power’s (TPWR) analyst meet held in Bhubaneswar on 15th Dec’25, which was attended by the company’s senior management. Our key takeaways: 1) TPWR aims to double EBITDA to INR300b by FY30; 2) for the Mundra plant, company is in advanced discussions to finalize a new SPPA mechanism (similar in nature to Section XI), which should enable power scheduling from Jan’26; and 3) a renewed strategic focus on captive generation projects shall be prioritized going forward with the annual target of 2-2.5GW FY27 onwards.
• TPWR’s current installed operational stands at ~16GW, including ~7.1GW from renewable sources. The company targets scaling up its total capacity to ~30GW by 2030, with renewables contributing ~20GW.
• While management has reiterated a broadly similar long-term growth framework as articulated last year, the operational renewable capacity target for FY30 has been lowered by 13% to 20GW from 23GW earlier. Consequently, the total installed capacity target for FY30 has been reduced to 30GW from 33GW previously.
• Segment-wise guidance highlights include: (1) Transmission: TPWR aims to scale its transmission portfolio to ~10,000 ckm by 2030 and emerge as a meaningful participant in the HVDC segment, against the backdrop of a material expansion in India’s HVDC and 765 kV network by 2032; (2) Distribution: payment discipline has improved and distribution remains a key policy area for the government. The company targets expanding its customer base from ~12.8m to 40m by FY30; (3) Renewable Energy: total installed RE capacity is targeted to reach 20GW by 2030; (4) Rooftop Solar: management expects revenue to grow at a ~38% CAGR over FY25- 30; and (5) Hydro & Pumped Storage: the 600 MW Khorlochhu and 1,125 MW Dorjilung hydro projects are expected to be commissioned in 2029 and 2032, respectively, while the 1,000 MW Bhivpuri PSP (by 2028) and 1,800 MW Shirwata PSP (by 2029) are under development.
• We have a BUY rating on TPWR with an SoTP-based TP of INR500/share

Vision to double EBITDA and PAT by FY30

• By FY30, TPWR aims to achieve EBITDA of INR300b and PAT of INR100b (before minority interest), which is more than double the FY25 level.
• Strong growth in profitability will be driven by contributions from RE generation and transmission & distribution-related opportunities, as installed RE capacity is set to rise from ~7GW to over 20GW by FY30, transmission network will be expanded to ~10,000ckm (7,047ckm operational + under construction as of FY25 end), and the distribution customer base is targeted to grow to ~40m by FY30 from 12.8m.

Scaling 16GW to 30GW by 2030

• In FY26, the company plans to add ~1.5GW of renewable capacity: ~300MW added in 1HFY26, 600MW expected in 3QFY26 and 600MW expected in 4QFY26.
• The company plans to prioritize its own renewable development projects over third-party EPC projects.
• Its installed operational capacity currently stands at ~16GW, including ~7.1GW from renewable sources. The company targets scaling up its total capacity to ~30GW by 2030, with renewables contributing ~20GW.
• TPWR remains disciplined on project economics, particularly in hybrid and FDRE projects, targeting tariffs of ~INR4/kWh to ensure reasonable returns.
• Management highlighted irrational bidding in the solar-plus-storage segment, with some projects of fellow RE IPP players delivering single-digit IRRs. It was also mentioned that small developers in the RE sector are witnessing stress, particularly those that bid aggressively in earlier auctions, with a large quantum of projects currently lacking PPAs.
• Management expects sector consolidation, with only well-capitalized and disciplined players sustaining operations, thereby restoring market balance.

For More Research Reports : Click Here 

For More Motilal Oswal Securities Ltd Disclaimer
http://www.motilaloswal.com/MOSLdisclaimer/disclaimer.html
SEBI Registration number is INH000000412