Stock to Buy: Tata Group stock that can deliver returns of 32%; Recommended by Motilal Oswal

Synopsis:- A brokerage sees 32% upside driven by capacity expansion from ~16 GW to 30 GW, EBITDA doubling to ₹300 billion by FY30, improving profitability, and strong sector tailwinds. Renewables, transmission growth, and a ₹6,500 crore solar manufacturing investment support long-term earnings visibility.

India’s integrated power utilities sit at the heart of a rapidly expanding energy ecosystem, managing generation, transmission, and distribution for a 476 GW grid as of June 2025. Electricity generation reached about 1,739 BU in 2023-24, growing over 7% year-on-year, driven by rising peak demand above 250 GW and accelerating renewable additions.

With a market capitalization of Rs 1,20,815.79 crore, the shares of Tata Power Company Ltd closed at Rs 378.00 per share, decreased around 0.51 percent as compared to the previous closing price of Rs 379.95 apiece.

Brokerage Recommendation

Motilal Oswal’s ‘Buy’ call reflects confidence in the company’s long-term growth prospects and improving earnings visibility. The target price of  Rs 500 implies a 32% upside from the current level, supported by capacity expansion, strong execution, and favourable sector tailwinds in India’s evolving power and renewable energy landscape.

As per the brokerage, the company targets doubling EBITDA to  Rs 300 billion by FY30, supported by capacity expansion, improved distribution discipline, and rising contribution from renewables and transmission assets.

Moreover, Total installed capacity is planned to scale from ~16 GW to ~30 GW by 2030, with renewables forming ~20 GW, strengthening long-term sustainability and margin stability.  Advanced discussions on a new SPPA mechanism for the Mundra plant could enable power scheduling from Jan’26, improving utilization and cash flows.

Additionally, the company focuses on captive generation (2–2.5 GW annually from FY27), transmission scale-up to ~10,000 ckm, and rooftop solar growth at ~38% CAGR, positioning the company well within India’s evolving power infrastructure push.

Financial & Other Highlights

Despite a marginal 1% decline in revenue to  Rs 15,545 crore in Q2FY26, the company delivered a strong 14% growth in net profit to  Rs 1,245 crore. This indicates improved operating efficiency, better cost control, and a favourable business mix, helping protect profitability amid stable topline performance.

Recently, the company announced plans to set up India’s largest solar wafer and ingot manufacturing facility with a 10 GW capacity, involving an estimated Rs 6,500 crore investment. The project, targeted for completion within 18–24 months, strengthens backward integration, reduces import dependence, and positions the company strategically within India’s rapidly expanding domestic solar manufacturing ecosystem.

Industry Growth Outlook

India’s power demand is set to rise steadily, driven by population growth, rapid urbanisation, and a strong correlation between GDP expansion and electricity consumption. Despite economic progress, India’s per capita power usage remains well below the global average, highlighting long-term demand potential. Improving plant load factors also reflects better utilisation across the power generation ecosystem.

The government’s ambitious 500 GW non-fossil capacity target by 2030 implies annual additions of nearly 50 GW, creating a strong multi-year opportunity pipeline. With 251 GW already installed and significant capacity under construction and auction, renewable adoption is expected to accelerate sharply over the next five years, supported by solar, wind, hydro, and storage projects.

India’s transmission sector is entering a strong growth phase, backed by rising power demand and large-scale grid expansion. Transmission line length is projected to increase from about 5 lakh ckm to 6.5 lakh ckm by 2032, supported by ₹9.2 trillion capex. Accelerating auctions and higher interstate investments improve long-term visibility for transmission developers.

Written by Abhishek Singh

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