This Tata Group stock will create 'long-term' value, Motilal Oswal projects 31% upside

Shares of Tata Power Company Ltd. will be in focus on Tuesday, December 16, after brokerage firm Motilal Oswal projected an upside potential of as much as 31% from current levels.

Motilal Oswal, which has a 'Buy' rating on Tata Power and a price target of ₹500 per share, said it recently attended the company's analyst meet held in Bhubaneswar on December 15. The meet was attended by Tata Power's senior management team and provided updated insights into the company's growth strategy going ahead.

Among the key takeaways, the brokerage said Tata Power has outlined ambitious targets for financial year 2030. The company aims to double its earnings before interest, tax, depreciation, and amortisation (EBITDA) to ₹30,000 crore and increase profit after tax to ₹10,000 crore by FY30. Both targets represent more than a twofold increase from the levels recorded in FY25.

Motilal Oswal also flagged developments at Tata Power's Mundra power plant. According to the brokerage, the company is in advanced discussions to finalise a new special power purchase agreement mechanism, similar in nature to Section XI. This is expected to enable power scheduling from January 2026 onwards.

In addition, the company is renewing its strategic focus on captive generation projects. Tata Power plans to prioritise this segment going forward, with an annual capacity addition target of 2 to 2.5 gigawatts starting from financial year 2027.

At present, Tata Power's installed and operational capacity stands at 16 gigawatts, of which 7.1 gigawatts is sourced from renewable energy. The company has set a target to scale up its total installed capacity to 30 gigawatts by 2030, with renewable energy accounting for 20 gigawatts of the total.

While management has reiterated a broadly similar long term growth framework compared with what was outlined last year, Motilal Oswal said that the operational renewable capacity target for FY30 has been revised downward.

The target has been reduced by 13% to 20 gigawatts from the earlier estimate of 23 gigawatts. As a result, the overall installed capacity target for FY30 has also been lowered to 30 gigawatts from the earlier projection of 33 gigawatts.

Shares of Tata Power Company Ltd. ended marginally higher on Monday at ₹382. The stock has declined 3% so far in 2025.