Shares of Tata Power experienced a significant decline of 6.56% in early trading today, settling at Rs 390.05. This dip occurred despite the Tata Group firm announcing a record annual net profit of Rs 5,118 crore for the financial year 2026.
The market reaction largely stemmed from the company's fourth-quarter earnings report, which saw consolidated net profit fall 4.5% year-on-year to Rs 996 crore, down from Rs 1043 crore in the same period last year. Revenue from operations for Q4 also decreased by 12.8% to Rs 14,900 crore.
Q4 Performance and Analyst Reactions
The decline in Q4 profit was primarily attributed to the temporary suspension of operations at the Mundra Power Plant since July 3, 2025, due to essential overhauling activities. Goldman Sachs noted that Tata Power's Q4 Profit After Tax (PAT) came in 13% below their estimates and remained flat year-on-year. Citing weak renewable generation and a reduced contribution from joint ventures, Goldman Sachs maintained its 'sell' rating on the stock.
Other brokerage firms offered mixed views:
- Elara Capital maintained a 'buy' rating, setting a target price of Rs 504.
- CLSA raised its target price to Rs 415 from Rs 369, keeping a 'hold' recommendation. The firm acknowledged a challenging year, with Mundra IPP and solar EPC disappointing, but highlighted strong performance from coal mines.
- Nuvama downgraded Tata Power from 'hold' to 'reduce', with a revised target price of Rs 390. Nuvama suggested that many positive factors are already priced into the current market valuation and that significant growth may be back-ended towards FY28.
Annual Performance and Dividend
Despite the Q4 challenges, Tata Power's annual income for FY26 stood at Rs 64,171.66 crore, a 4.2% decrease from the previous year. The company's board of directors also recommended a final dividend of Rs 2.50 per equity share for the financial year ended March 31, 2026. The record date for this dividend has been fixed for Tuesday, June 23, 2026.