Check Before You Invest : Tata Power Company Ltd

Snapshot

Q.1 Which industry/sub-sector does Tata Power Company Ltd belong to?

Tata Power Company Ltd belongs to the Power sector, operating specifically within the Power Generation/Distribution segment.

Q.2 Is Tata Power Company Ltd a good quality company?

Tata Power Company Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is Tata Power Company Ltd undervalued or overvalued?

Tata Power Company Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Q.4 Is Tata Power Company Ltd a good buy now?

Tata Power Company Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Tata Power Company Ltd?

Tata Power Company Ltd revenue growth is 6.6% for FY-2025, which is below its 5-year CAGR of 17.58%, indicating slower growth.

Q.2 Return on capital employed (ROCE) of Tata Power Company Ltd?

Tata Power Company Ltd Return on capital employed is 12.54% for FY-2025, which is in line with its 5-year historical median of 12.54%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.

Q.3 Return on Asset of Tata Power Company Ltd?

Tata Power Company Ltd Return on Asset is 3.23%, which is in line with its 5-year historical median of 3.17%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of Tata Power Company Ltd?

Tata Power Company Ltd Return on equity is 14.01% for FY-2025, which is in line with its 5-year historical median of 14%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Tata Power Company Ltd?

Tata Power Company Ltd Cash conversion cycle is 1 days, below its 5-year historical median of 1 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.44	0.44
ROE	14.01	14
ROCE	12.54	12.54
Cash Conversion Cycle	1 days	1 days

Q.6 Gross Profit margin of Tata Power Company Ltd?

Tata Power Company Ltd Gross profit margin which is the profit after deduction of direct costs, is 16.4% for FY-2025, which is above its 5-year median of 10.7%, indicating increasing margins.

Q.7 Operating Profit Margin of Tata Power Company Ltd?

Tata Power Company Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 21.47% for FY-2025, which is above its 5-year median of 17.93% indicating increasing margins.

Q.8 Net Profit Margin of Tata Power Company Ltd?

Tata Power Company Ltd Net Profit Margin is 7.29% for FY-2025, is above with its 5-year median of 6.91%, indicating increasing margins.

	Current Level	5-year Historic Median
Gross Profit Margin	16.4	10.7
Operating Profit Margin	21.47	17.93
Net Profit Margin	7.29	6.91

Q.9 Debt to Equity ratio of Tata Power Company Ltd?

Tata Power Company Ltd Debt-to-Equity ratio is 1.62, which is lower with the industry average of 1.63, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Tata Power Company Ltd?

Tata Power Company Ltd Debt to cash flow from operations is 4.59, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Tata Power Company Ltd?

Promoters hold 46.86% of the Tata Power Company Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Tata Power Company Ltd vs industry peers?

Tata Power Company Ltd revenue CAGR is 17.58%, compared to the industry median CAGR of 17.64%, indicating slower growth and losing its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	6.6	17.6
Gross Profit Growth	34.7	21.8
Operating Profit Growth	29	11.7
Net Profit Growth	11.6	18.8

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.44	0.27
ROE	14.01	16.15
ROCE	12.54	11.23
Cash Conversion Cycle (days)	1.27	68

Valuation & price assessment

Q.1 Stock return of Tata Power Company Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 20.2% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	20.2%	34%	30.2%	13.4%

Q.3 Valuation ratios of Tata Power Company Ltd vs historical?

The current P/E is higher that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	37.17	32.27	27.19
Price to Book	3.65	3.35	1.80
Price to Sales	2.18	1.88	6.78
EV to EBITDA	12.53	11.84	13.53

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