Tata Power Q4FY26: Targets ₹490-₹504 after 7% fall

Stock slides after Q4FY26 print

Tata Power shares fell more than 6% in early trade on May 13, 2026, after the company reported a weak Q4FY26 performance. The stock opened sharply lower, dropping about 6.5% to ₹391 and hit an intraday low near ₹390.80. At around 10 am, the stock was trading about 4.9% lower at ₹398, underperforming the broader market. In another snapshot later in the morning, it was down 2.88% at ₹406.35 around 10:55 am.

The decline extended a losing streak to five consecutive sessions. Over that period, Tata Power shares were down more than 11%, compared with around a 4% decline in the Nifty 50. The stock was also cited as the top loser on the Nifty Next 50, with the index down 0.25% at the time.

Trading activity and relative market performance

Trading volumes rose as the stock reacted to the quarterly numbers. Around 6.5 million shares changed hands in the first 45 minutes of trade. A later market snapshot showed traded volume at 11,088,226 shares by 11:09 am.

Even as Tata Power declined, the headline NSE Nifty index was down only about 0.3% at the same time window. The divergence highlighted stock-specific pressure following the Q4 update and subsequent brokerage commentary.

Q4FY26: Profit and revenue fall year-on-year

For the quarter ended March 2026, Tata Power reported consolidated net profit of ₹996 crore, down 4.5% year-on-year from ₹1,043 crore. Revenue from operations fell 12.8% to ₹14,900 crore compared with ₹17,096 crore in Q4FY25.

Operational performance was also reported as weaker. EBITDA declined 19.9% year-on-year to ₹2,599 crore, while the EBITDA margin narrowed to 17.4% from 19% in the corresponding quarter last year. Separately, analysts noted that EBITDA came in below estimates by 13%.

Mundra plant disruption flagged as a factor

The quarter was affected by the temporary suspension of operations at the Mundra Power Plant from July 3, 2025, linked to pending overhauling activities aimed at resolving technical issues. This operational disruption was cited as one of the reasons profit was hit.

Another report noted that the Mundra plant resumed operations from April 1, 2026, following a new power purchase agreement. The timing matters because it frames Q4FY26 as a quarter that still reflected disruption, with resumption occurring after the quarter ended.

FY26 headline: Record PAT despite income dip

Despite the weaker March quarter, Tata Power reported a record full-year consolidated PAT of ₹5,118 crore. Total annual income fell 4.2% to ₹64,171.66 crore.

This contrast between a record full-year profit and a softer Q4 helped explain the split market response: investors reacted to near-term earnings and margin pressure, while some brokerages stayed focused on longer-term drivers.

Brokerage calls: Buy, Hold, Reduce and Sell

Post results, Motilal Oswal Financial Services maintained a ‘Buy’ rating with a target price of ₹490. Motilal’s note said the target implied an upside of 22% from the CMP.

Other brokerage views were mixed. Goldman Sachs maintained a ‘Sell’ call; a separate report cited a target price of ₹300, implying downside from prevailing levels. Elara Capital maintained a ‘Buy’ rating with a target price of ₹504. CLSA raised its target price to ₹415 from ₹369 while keeping a ‘Hold’ call, and said Mundra IPP and solar EPC disappointed in Q4 while coal mines performed better.

Nuvama downgraded the stock to ‘Reduce’ from ‘Hold’ and set a target price of ₹390 (earlier ₹388). JM Financial was also cited as maintaining a ‘Buy’ call with a target price of ₹485.

What analysts flagged in the quarter

Goldman Sachs said Q4 PAT was 13% below estimates and flat year-on-year, while pointing to weak renewable generation and lower joint venture contribution as drags on earnings. Another report added that execution concerns, transmission constraints and curtailments were among the issues flagged.

Motilal Oswal, in contrast, maintained its positive stance while highlighting strong growth in rooftop solar installations and the company’s expanding renewable energy business. Nuvama’s commentary, as reported, suggested that positives could be largely priced in at current levels, with growth expected to be back-ended even as it remained constructive on the long-term story.

Key numbers at a glance

Market impact: Why the stock reacted sharply

The immediate market reaction was driven by the year-on-year decline in Q4 profit and revenue, alongside reported margin compression. The stock’s multi-session decline also meant sentiment was already weak going into results day, amplifying the response.

Brokerage divergence added to volatility. Sell-side caution from Goldman Sachs and the downgrade by Nuvama contrasted with buy ratings and higher targets from Motilal Oswal, Elara, and JM Financial. For traders and short-term investors, such dispersion can keep focus on near-term execution, plant availability, and whether operational performance stabilises after Mundra’s resumption.

Analysis: What the mixed targets signal

The spread in target prices, from ₹300 on the bearish end to ₹504 on the bullish end, shows that brokerages are weighing the same facts differently. Bears are emphasising earnings coming in below estimates and concerns around renewable generation and constraints, while bulls are leaning on the company’s renewable and solar-related growth narrative mentioned in brokerage notes.

What is clear from the reported numbers is that Q4FY26 had weaker operating outcomes on key metrics, including revenue, EBITDA, and margins. The market’s sharp move suggests investors are currently more sensitive to quarterly delivery and valuation comfort than to full-year record profit alone.

Conclusion

Tata Power’s May 13 selloff followed a Q4FY26 result that showed declines in profit and revenue and a tighter margin profile, alongside plant disruption context at Mundra. Brokerages stayed split, with Motilal Oswal reiterating ‘Buy’ at ₹490, Elara at ₹504, and Goldman Sachs maintaining a ‘Sell’ call with a reported ₹300 target. The next key reference point for the stock will be evidence in subsequent quarters on whether operations normalise after Mundra’s April 1, 2026 resumption and whether earnings performance aligns more closely with estimates.