03 Sep , 2026 By : Debdeep Gupta
Shares of Tata Power gained over 1% in Thursday's trade after Nuvama upgraded the stock to 'BUY' from 'HOLD', with a Bull Case target price of Rs 421, implying around 14% upside from the current market price.
Shares of Tata Power were trading at Rs 368.70 on the NSE, up Rs 4.70 or 1.29%, at 11:26 am.
Nuvama upgraded Tata Power after the stock corrected around 8% following the adverse Kleros arbitration ruling. The brokerage estimates a potential cash outgo of $490-640 million, or around Rs 20 per share, but believes the arbitration overhang is now largely priced in.
"We upgrade TPWR to 'BUY' as per our Bull Case TP of Rs 421 (after the Kleros impact)," Nuvama said, adding that the current market price "factors near-term risks but leaves medium-term growth optionality unpriced".
The brokerage sees potential from Tata Power's pumped storage power (PSP), transmission and Bhutan hydroelectric power pipeline, which could contribute to cash flows by FY29-30E.
Timely commissioning of the 2.8GW PSP portfolio could add around Rs 6 billion in annual cash flow and lead to a re-rating when the street rolls over to FY29, Nuvama said.
Nuvama's Bull Case assigns Rs 14 per share to the 2.8GW PSP portfolio, Rs 19 per share to the TBCB business based on around Rs 125 billion of work-in-hand, and Rs 4 per share to the Khorlochhu hydroelectric project in Bhutan.
The brokerage said future TBCB wins and Tata Power's solar manufacturing ventures into ingots and wafers could offer further upside, while greater integration could expand margins.
Nuvama has made no changes to its estimates. Its Base Case target price is Rs 400, while the Bear Case target is Rs 363.
Mark At the current market price, Tata Power trades at 2.4x price-to-book and 22x FY28E EPS, with FY28E EPS estimated at Rs 16.6, Nuvama said.
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