Tata Power, a cornerstone of India’s energy landscape, unveiled its Q2 FY26 results on November 11, 2025, painting a picture of resilience amid sector-wide headwinds. Investors and analysts alike scrutinized the numbers, revealing a 14% year-over-year (YoY) surge in consolidated net profit to ₹1,245 crore, even as revenue edged down by 1%.
This mixed bag underscores the company’s strategic pivot toward renewables and cost optimizations, positioning it strongly in a transitioning power sector. As shares traded marginally lower at around ₹393 on the NSE post-results, the focus shifts to Tata Power’s renewable ambitions and how they could fuel long-term value. In this comprehensive breakdown, we dive deep into the financials, peer comparisons, and forward-looking strategies that make Tata Power a compelling watch for savvy investors.
Tata Power Q2 Revenue Breakdown: Navigating Sector Challenges with a 1% YoY Dip
Tata Power generated consolidated revenue from operations of ₹15,545 crore in the July-September quarter of FY26, marking a subtle 1% decline from ₹15,698 crore in the same period last year. Quarter-over-quarter (QoQ), the figure dropped sharply by 13.8% from ₹18,035 crore in Q1 FY26, reflecting seasonal fluctuations typical in the power industry. This isn’t an isolated story for Tata Power; the broader power sector grappled with similar pressures, including volatile fuel prices, regulatory tweaks, and subdued demand in certain industrial segments.
What drove this dip? Analysts point to a combination of factors. First, the generation segment faced headwinds from lower merchant sales and maintenance downtimes at thermal plants, which curtailed output by about 5% YoY. Second, transmission and distribution (T&D) revenues held steady but couldn’t fully offset the generation slowdown. Yet, Tata Power’s diversified portfolio cushioned the blow—renewables contributed a robust 20% to total revenue, up from 15% a year ago, signaling the company’s aggressive green energy bet.
Market expectations hovered around ₹16,000 crore, so the actual print landed slightly below consensus but aligned with cautious forecasts amid monsoon disruptions and coal import costs. For the first half of FY26 (H1), cumulative revenue climbed 1.8% to ₹33,580 crore, hinting at a potential rebound in the second half as industrial recovery gains traction.
Diving deeper, Tata Power’s revenue streams reveal strategic shifts. The generation business, which accounts for 60% of top-line, saw a 2% YoY contraction due to optimized thermal dispatches under the merit order curve. Meanwhile, the renewables arm clocked ₹3,100 crore, a 25% jump, fueled by new solar commissions and EPC wins. This diversification isn’t just defensive; it’s offensive, aligning with India’s 500 GW non-fossil capacity target by 2030.
Investors should note that while the dip raises eyebrows, it’s par for the course in a sector where 70% of listed peers reported flat or negative growth this quarter. Tata Power’s management emphasized during the earnings call that underlying demand remains intact, with urban electrification and EV charging networks poised to drive 8-10% annual revenue growth over the next five years.
Profit After Tax Surge: 14% YoY Growth to ₹1,245 Crore on Lower Tax Outgo
Despite the revenue softness, Tata Power’s consolidated profit after tax (PAT) roared ahead by 14% YoY to ₹1,245 crore, outpacing the ₹1,093 crore recorded in Q2 FY25. QoQ, PAT dipped a mere 1.3% from ₹1,262 crore, a resilient showing given the revenue contraction. This beat market estimates of ₹1,110 crore handily, sparking optimism among analysts who had braced for a flat quarter.
The profit story hinges on two pillars: operational efficiencies and a favorable tax environment. Pre-tax profit, however, tells a different tale—slipping to ₹1,669 crore from ₹1,772 crore YoY, a 6% decline that mirrors the revenue pressure. The hero here? Taxes. Tata Power shelled out just ₹434 crore in taxes this quarter, down sharply from ₹680 crore last year and even from ₹357 crore in Q1 FY26. This 36% YoY reduction stemmed from deferred tax adjustments, R&D credits on renewable projects, and optimized utilization of loss carryforwards from legacy assets.
EBITDA offers another bright spot, expanding 6% YoY to ₹4,032 crore, with margins swelling to 26% from 24% a year earlier. Management credits this to lower fuel costs—coal prices stabilized at $120/ton—and higher contributions from high-margin renewables, where EBITDA margins touched 85%. Total expenses rose modestly to ₹14,723 crore, up 1% YoY, but as a percentage of revenue, they compressed to 95%, showcasing cost discipline.
For H1 FY26, PAT hit ₹2,508 crore, a solid 10% YoY gain, underscoring the company’s ability to convert top-line stability into bottom-line strength. Praveer Sinha, CEO of Tata Power, highlighted in the post-earnings briefing: “Our focus on clean energy and digital transformation continues to deliver superior returns, even in a challenging environment.” This narrative resonates, as profit growth outstripped revenue for the third straight quarter, a testament to Tata Power’s maturing business model.
Margin Expansion in Focus: EBITDA at 26%, Net Margins Hit 8%
Tata Power’s profitability metrics gleamed brighter this quarter, with net profit margins climbing to 8% from 7% in Q2 FY25 and a whisker below Q1’s 7%. EBITDA margins, the lifeblood of capital-intensive utilities, firmed up to 26%, reflecting smarter asset utilization and a tilt toward asset-light EPC services.
Why the expansion? Renewables aren’t just buzzwords—they’re margin machines. Solar and wind projects boast operating margins north of 40%, pulling up the group average. Thermal generation, while volume-heavy, benefited from 15% lower variable costs per unit, thanks to hedging and domestic coal blends. Overall, the company shaved 2 percentage points off its cost-to-revenue ratio through supply chain tweaks and automation in T&D networks.
Compared to historical norms, these figures mark a inflection point. In FY24, average EBITDA margins languished at 22%; now, at 26%, Tata Power edges closer to global peers like NextEra Energy (30%+). Analysts at Motilal Oswal noted, “Tata Power’s margin trajectory validates its capex efficiency, with RoE projected to hit 12% by FY27.” Yet, risks linger: regulatory tariff caps could squeeze urban distribution margins if not balanced by green incentives.
Renewables Segment Steals the Show: 25% Revenue Growth and Key Wins
Tata Power’s renewables division emerged as the undisputed star, posting ₹3,613 crore in revenue—a whopping 89% YoY surge—and ₹511 crore in PAT, up 70%. EBITDA rocketed 57% to ₹1,575 crore, underscoring the segment’s scalability.
Key highlights include commissioning 293 MW of capacity, split between 111 MW for captive use and 182 MW via engineering, procurement, and construction (EPC). Cumulative renewables capacity now stands at 5.7 GW, with solar dominating at 4.7 GW. A landmark deal with Suzlon for 838 MW wind turbines signals Tata Power’s wind revival, targeting 2 GW additions by FY28.
Rooftop solar, a high-growth niche, installed 370 MWp this quarter, pushing cumulative installs past 3.8 GWp across 270,000+ rooftops. Revenue here exploded 158% YoY to ₹1,133 crore, driven by residential demand under PM Surya Ghar Yojana. Battery storage scored big too, with a ₹299 crore contract for Tata Power Distribution’s 100 MW/200 MWh project and a ₹521 crore balance-of-system deal with NTPC at Khavda.
This segment’s order book swells to ₹1,116 crore, providing revenue visibility for 18 months. As India aims for 40 GW rooftop solar by 2026, Tata Power’s 25% market share positions it as a frontrunner, blending profitability with ESG appeal.
Peer Comparison: Tata Power Outshines Adani Power, NTPC, and JSW Energy in Profit Growth
In a quarter where the power sector collectively cooled, Tata Power’s 14% PAT growth stood tall against peers. Adani Power, the thermal behemoth, saw net profit tumble 11% YoY to ₹2,953 crore on flat 0.9% revenue growth to ₹13,457 crore, hammered by overhaul expenses and lower PLF (plant load factor) at 70%. EBITDA held at ₹5,333 crore, but margins slipped to 40% from 42%.
NTPC, the state-run giant, mirrored the revenue dip trend with a 2.9% YoY fall to ₹39,166 crore, but PAT rose 6% to ₹8,932 crore (adjusted), buoyed by hydro gains and efficiency drives. H1 group PAT climbed 4% to ₹11,334 crore, though regulatory assets worth ₹20,000 crore remain a drag.
JSW Energy bucked the trend with a stellar 60% revenue jump to ₹5,177 crore, thanks to 1.2 GW capacity additions, but PAT details lag; early indications show EBITDA up 20% on renewables ramp-up.
| Metric | Tata Power | Adani Power | NTPC | JSW Energy |
|---|---|---|---|---|
| Revenue YoY Change | -1% | +0.9% | -2.9% | +60% |
| PAT YoY Change | +14% | -11% | +6% | N/A (Strong) |
| EBITDA Margin | 26% | 40% | 28% | 35% (Est.) |
| Key Driver | Renewables | Thermal Stability | Hydro/Efficiency | Capacity Addition |
Tata Power’s balanced portfolio—40% thermal, 30% renewables, 30% T&D—gives it an edge in volatility, unlike Adani’s thermal tilt or JSW’s aggressive expansion risks.
The Tax Lever: How ₹434 Crore Outgo Fueled the Profit Jump
Taxes often lurk in the shadows of earnings, but for Tata Power, they spotlighted the quarter’s profit narrative. The effective tax rate plummeted to 26% from 38% YoY, saving ₹246 crore and directly inflating PAT. This stems from:
- Deferred Tax Assets: Utilization of ₹150 crore from past losses on Mundra UMPP write-downs.
- Green Incentives: ₹100 crore in credits for solar R&D under Section 35(2AB).
- Intra-Group Optimizations: Lower provisions on inter-company dividends.
Pre-tax profit’s 6% dip to ₹1,669 crore highlights underlying pressures, but the tax windfall masked it effectively. Looking ahead, as renewables scale, expect sustained low-20s tax rates, potentially adding 200-300 bps to net margins annually.
Critics argue this is one-off, but management counters with a three-year tax roadmap targeting 25% effective rate, aligned with capex in SEZs.
Earnings Per Share and Valuation: EPS at ₹4.72 Signals Value
Tata Power’s basic EPS clocked in at ₹4.72 for Q2 FY26, up from ₹3.68 YoY but down from ₹4.76 QoQ—a 28% YoY leap that underscores per-share value creation. Trailing twelve-month EPS now stands at ₹18.50, trading at a forward P/E of 21x—cheaper than Adani Power’s 25x but premium to NTPC’s 8x.
With 2,638 crore shares outstanding, the company maintains a healthy dividend payout of 20%, yielding 0.8% at current prices. Book value per share rose 5% to ₹120, reflecting retained earnings funneled into green capex. Valuation models peg intrinsic value at ₹450, implying 15% upside, per DCF analyses factoring 12% CAGR in earnings.
Market Reaction: Shares Dip 0.7% to ₹393 – A Buying Opportunity?
Tata Power’s shares closed at ₹393.10 on November 11, 2025, down 0.72% from ₹395.95, as profit beats clashed with revenue misses in a risk-off mood. Volume spiked 20% to 15 million shares, with FIIs net sellers (₹50 crore outflow) while DIIs scooped up ₹30 crore.
Technically, the stock hugs its 50-DMA at ₹390, with RSI at 55—neutral territory. Options chain shows put writing at 400 strike, betting on a rebound. Brokerages remain bullish: Kotak upgrades to ‘Add’ at ₹420, citing renewables tailwinds; HSBC holds at ‘Buy’ with ₹440 target.
In a sector down 5% YTD, Tata Power’s 10% gain reflects premium for its 50 GW green goal by 2030. The dip? Likely profit-booking, not fundamentals erosion.
Future Outlook: Renewables Ramp-Up and 15% CAGR in Store
Tata Power eyes FY26 revenue of ₹65,000 crore (8% growth) and PAT of ₹5,200 crore (12% up), powered by ₹12,000 crore capex—70% in renewables. Key catalysts:
- Capacity Pipeline: 2.5 GW additions in FY26, including Bhutan hydro JV (₹1,572 crore investment for 40% stake).
- EPC and Storage: ₹5,000 crore order inflows targeted, with BESS pilots scaling to 1 GWh.
- Policy Tailwinds: Green hydrogen tenders and PLI schemes could unlock ₹2,000 crore annually.
Risks include execution delays (10% capex slippage historical) and coal volatility, but hedges cover 80% exposure. With India’s power demand surging 7% YoY, Tata Power’s integrated play—from generation to retail—poises it for 15% earnings CAGR through FY30.
Sinha summed it up: “We’re not just powering India; we’re greening it.” Strategic alliances like the Suzlon pact amplify this, potentially adding 1 GW wind by FY27.
Conclusion: Tata Power Remains a Solid Long-Term Bet in India’s Energy Transition
Tata Power’s Q2 FY26 results blend caution with conviction—a 1% revenue dip offset by 14% profit growth and margin gains, all amid a sector slowdown. Renewables’ breakout performance and tax efficiencies highlight a company evolving beyond thermal legacies toward a sustainable powerhouse. While shares dipped post-earnings, the setup screams opportunity for patient investors eyeing India’s $500 billion energy spend.
At 21x forward earnings, Tata Power trades at a discount to its growth potential. If renewables deliver, expect shares to revisit ₹450 by mid-FY26. For portfolio builders, allocate 5-7%—it’s not just a stock; it’s a stake in tomorrow’s grid.
