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Tata Power Company Ltd

NSE: TATAPOWER BSE: 500400

413.50

(-0.36%)

Sun, 24 May 2026, 04:32 pm

Tata Power Company Analysis

dividend

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Pros

  • Dividends per share have increased over the past 10 years.
  • Dividends paid are well covered by earnings (2.8x coverage).
  • Dividends after 3 years are expected to be well covered by earnings (4.6x coverage).
  • Dividends per share have been stable in the past 10 years.
  • Tata Power's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
  • Tata Power's dividend is above the markets top 25% of dividend payers in India (3.08%).
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Cons

    future

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    Pros

    • Tata Power's earnings are expected to increase by more than the low risk growth rate in 3 years time.
    • An improvement in Tata Power's performance (ROE) is expected over the next 3 years.
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    Cons

    • Cash flow for Tata Power is expected to increase but not above the 50% threshold in 2 years time.
    • Tata Power's earnings are expected to grow by 5.4% yearly, however this is not considered high growth (20% yearly).
    • Tata Power's earnings growth is positive but not above the India market average.
    • Tata Power's earnings growth is positive but not above the low risk savings rate of 7.2%.
    • Tata Power's earnings are expected to increase but not above the low risk growth rate next year.
    • Tata Power's net income is expected to increase but not above the 50% threshold in 2 years time.
    • Tata Power is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
    • Performance (ROE) is not expected to exceed the current IN Electric Utilities industry average.
    • Tata Power's revenue is expected to increase but not above the 50% threshold in 2 years time.
    • Tata Power's revenue is expected to grow by 3.8% yearly, however this is not considered high growth (20% yearly).
    • Tata Power's revenue growth is positive but not above the India market average.

    health

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    Pros

    • Tata Power is profitable, therefore cash runway is not a concern.
    • Tata Power is profitable, therefore cash runway is not a concern.
    • The level of debt compared to net worth has been reduced over the past 5 years (234.3% vs 203.4% today).
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    Cons

    • Tata Power's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
    • Debt is not well covered by operating cash flow (16.6%, less than 20% of total debt).
    • Debt is not covered by short term assets, assets are 0.4x debt.
    • Tata Power's long term commitments exceed its cash and other short term assets.
    • Interest payments on debt are not well covered by earnings (EBIT is 1.2x annual interest expense, ideally 3x coverage).
    • Tata Power's level of debt (203.4%) compared to net worth is high (greater than 40%).
    • High level of physical assets or inventory.

    management

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    Pros

    • The tenure for the Tata Power board of directors is about average.
    • Praveer's remuneration is about average for companies of similar size in India.
    • The average tenure for the Tata Power management team is over 5 years, this suggests they are a seasoned and experienced team.
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    Cons

      misc

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      Pros

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        Cons

        • Tata Power has significant price volatility in the past 3 months.

        past

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        Pros

        • Tata Power has delivered over 20% year on year earnings growth in the past 5 years.
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        Cons

        • Tata Power's 1-year earnings growth is negative, it can't be compared to the 5-year average.
        • Tata Power used its assets less efficiently than the IN Electric Utilities industry average last year based on Return on Assets.
        • Tata Power's use of capital has not improved over the past 3 years (Return on Capital Employed).
        • Tata Power has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
        • Tata Power's 1-year earnings growth is negative, it can't be compared to the IN Electric Utilities industry average.

        value

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        Pros

        • Tata Power's share price is below the future cash flow value, and at a moderate discount (> 20%).
        • Tata Power's share price is below the future cash flow value, and at a substantial discount (> 40%).
        • Tata Power is good value based on assets compared to the IN Electric Utilities industry average.
        • Tata Power is good value based on earnings compared to the India market.
        • NSEI:TATAPOWER is up 30.7% outperforming the Electric Utilities industry which returned 5.5% over the past month.
        • NSEI:TATAPOWER is up 30.7% outperforming the market in India which returned 8% over the past month.
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        Cons

        • Tata Power is poor value based on expected growth next year.
        • Tata Power is overvalued based on earnings compared to the IN Electric Utilities industry average.
        • TATAPOWER underperformed the Electric Utilities industry which returned -13.9% over the past year.
        • TATAPOWER underperformed the Market in India which returned -14.5% over the past year.

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