Tata Power share price target 2026: Morgan Stanley neutral on power stock – Know why brokerage is cautious; Is it a BUY? – Markets

The brokerage firm, Morgan Stanley, maintains an ‘Equal Weight’ rating with a target price of Rs 399. Here’s why:

1. Mundra plant turnaround on track; remaining four states expected to sign supplementary power purchase agreements by June; plant now operating at full capacity.

2. The company has guided for capital expenditure of USD 400 million in its distribution business, USD 1 billion in transmission over the next two years, and USD 750 million in the renewable energy segment.

3. The brokerage further highlighted that Tata Power targets 2.5GW of renewable energy additions in FY27-28; over 70% land acquisition is complete.

4. The company focuses on renewables, battery energy storage and pumped storage; nuclear remains a long-term opportunity.

5. Solar manufacturing capacity at 4.3GW; plans to spend around USD 40mn to shift to next-generation technology by 2029.

6. Distribution privatisation seen as a strong opportunity; targets reducing transmission and collection losses to below 10% from the current 18-20%.

Tata Power, one of India’s largest vertically integrated power companies, announced a Reported Profit After Tax (PAT) of Rs 1,416 crore, up 8% YoY for the 4th quarter ended March 31, 2026. The Company’s revenue stood at Rs 15,962 crore; while EBITDA grew to Rs 4,216 crore, up 10% YoY on the back of strategic expansion, operational excellence and disciplined execution.

The quarter reflects the Company’s commitment to strengthening clean energy capabilities, enhancing efficiency across operations and deepening regional partnerships that support long-term energy security and sustainability.

One of the key highlights of the Quarter was the Company’s continued commitment towards building a better tomorrow. During the quarter, the Company has made progress on Hydro Power Projects in Bhutan, completed two major Transmission projects under TBCB to facilitate power evacuation and achieved steady progress in the construction of its Pumped Hydro Project aimed at enabling reliable round-the-clock clean energy availability.

For FY26, the Reported PAT grew 7% to an all-time high of Rs 5,118 crore; revenue reached Rs 63,681 crore, while EBITDA rose to Rs 16,090 crore, up 11%.

Q4 FY26 performance was driven by strong execution across the Company’s diversified portfolio, accelerated module and cell ramp-up at Tirunelveli in Tamil Nadu, achievement of the milestone of over 3.7 lakh rooftop solar installations, large-scale renewable capacity commissioning, and continued operational improvements in Odisha DISCOMs.

In Q4 FY26, the Core Business recorded an impressive 13% YoY growth in PAT, driven primarily by the continued performance of Generations, Transmission & Distribution and Renewables verticals.

In FY26, Tata Power supplied 49.52 billion units of electricity to the grid, and its Discoms supplied approximately 47.92 billion units to consumers.

The board also declared a final dividend of Rs 2.50 per equity share for the financial year.

“We are pleased to inform you that the Board of Directors of the Company had at its meeting held on May 12, 2026, recommended a dividend of Rs 2.50 per Equity Share of Rs 1 each (250%), for the financial year ended March 31, 2026, subject to the approval of the Shareholders of the Company at its forthcoming Annual General Meeting (AGM)”, the company informed in its exchange filing.

(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)