Tata Power Q4 profit dips 4.5% as Gujarat plant shutdown weighs; record FY26 PAT offers silver lining

Tata Power Company reported a 4.5% decline in consolidated net profit for the fourth quarter of FY26, dragged down by the shutdown of its Mundra thermal power plant in Gujarat. However, the company delivered a record full-year performance and pointed to a strong operational rebound across renewables, transmission and distribution, and solar manufacturing.

Headline numbers

Consolidated net profit attributable to the owners of the company came in at ₹996 crore in Q4 FY26, down from ₹1,043 crore in the corresponding quarter last year. Revenue from operations fell 12.8% to ₹14,900 crore from ₹17,096 crore, with the decline largely on account of the Mundra plant, which had ceased operations during the year. EBITDA, as reported by the company, came in at ₹2,599 crore against ₹3,246 crore in Q4 FY25, with margins contracting to 17.44% from 18.98%. On a sequential basis, however, revenue grew 6.8% from ₹13,948 crore in Q3 FY26.

The Mundra drag

The single biggest reason for the top and bottomline decline was the shutdown of the Mundra Ultra Mega Power Plant in Gujarat, which ceased operations during the year after its power purchase agreement with Gujarat ended. The thermal and hydro power segment saw its consolidated EBITDA collapse to ₹960 crore in Q4 FY26 from ₹1,215 crore a year ago — a drop of ₹256 crore — and segment operating profit plunged ₹341 crore. For the full year, the segment's EBITDA fell from ₹6,905 crore to ₹4,369 crore. Critically, a new supplemental PPA for Mundra was signed with Gujarat in March 2026, and the plant resumed operations from April 1, 2026, meaning the FY27 numbers will no longer carry this drag.

Full year FY26 — record headline PAT

Despite the muted quarterly numbers, the company delivered its highest-ever annual reported PAT of ₹5,118 crore — up 7% from ₹4,775 crore in FY25. Full-year revenue stood at ₹63,681 crore. Annual EBITDA grew 11% to ₹16,090 crore. Consolidated net profit attributable to owners of the company for FY26 was ₹3,747 crore — down 5.6% from ₹3,971 crore in FY25 on account of the Mundra impact. EPS (adjusted, before exceptional items) for FY26 stood at ₹12.0 versus ₹13.5 in FY25.

Renewables surges

The renewables business was the standout performer, with full-year PAT before exceptional items surging 59% YoY to ₹1,994 crore. In Q4 alone, renewables PAT came in at ₹406 crore. The company commissioned 406 MW of utility-scale in-house renewable capacity during Q4, taking total installed renewable energy capacity to 6.5 GW. It crossed a cumulative 10 GW EPC execution milestone during the quarter. Total capacity including pipeline now stands at 26.3 GW, of which 17.5 GW is clean and green.

Solar manufacturing

The solar cell and module manufacturing business saw full-year PAT more than double to ₹857 crore, supported by capacity ramp-up and production yields crossing 95%. In Q4 alone, the plant produced 964 MW of cells and 915 MW of modules. Q4 revenue from the plant grew 25% YoY to ₹1,879 crore, while Q4 EBITDA and PAT grew 24% and 40% to ₹501 crore and ₹265 crore respectively, driven by input cost efficiency.

The rooftop solar business posted a sharp 150% rise in annual PAT to ₹499 crore. The business recorded a record billing of 670 MWp in Q4 alone and 1.7 GWp for FY26. Q4 revenue from third-party rooftop stood at ₹1,732 crore, up from ₹864 crore in Q4 FY25. Residential rooftop share grew sharply — full-year residential revenue jumped to ₹2,951 crore in FY26 from ₹847 crore in FY25.

Transmission and distribution

The T&D business posted a 49% increase in FY26 PAT to ₹2,978 crore. Tata Power fully commissioned the SEUPPTCL transmission line of 1,521 circuit kilometres, adding 732 CKm in Q4 alone. Operational transmission lines now stand at 5,562 CKm, with another 1,841 CKm under construction.

Odisha discoms

The Odisha distribution companies delivered standout improvement, with annual PAT rising 84% to ₹809 crore from ₹439 crore. Full-year EBITDA rose 40% to ₹2,909 crore. AT&C losses across the four Odisha discoms declined by 2% to 15.5% versus 17.5% in FY25, with TPNODL (Northern Odisha) achieving single-digit AT&C losses of 9.9%. Smart meter installations across the four discoms totalled approximately 26.9 lakh.

Bhutan hydropower

Separately, Tata Power expanded its hydropower partnership with Bhutan's Druk Green Power Corporation by signing an amendment to their MoU to add the 404 MW Nyera Amari I & II Integrated Hydropower Project, taking the total identified portfolio to 5,033 MW from 4,500 MW. The partnership — signed in the presence of Bhutan Prime Minister Lyonchhen Tshering Tobgay — now covers Khorlochhu (600 MW), Dorjilung (1,125 MW), Gongri Reservoir with Jeri Pumped Storage (2,540 MW), Chamkharchhu IV (364 MW), and Nyera Amari I & II (404 MW). Work has already commenced on Khorlochhu and Dorjilung, together accounting for approximately 35% of the committed 5 GW portfolio. The duo also aim to develop 500 MW of solar PV projects in Bhutan.

Praveer Sinha, CEO & managing director, Tata Power, said: "This milestone of expanding our joint hydropower portfolio to over 5,000 MW with DGPC marks a significant step in strengthening our clean energy partnership in Bhutan. The addition of the Nyera Amari project reflects the scale, ambition, and long-term commitment of this collaboration. This strategic partnership is not only pivotal for advancing Bhutan's economic growth by unlocking its vast hydropower potential but also plays a critical role in enhancing regional energy security. For India, especially during peak summer months when demand continues to reach record highs, such partnerships ensure access to reliable, clean power."

Key legal overhang

In the earnings report, the auditors have flagged an unfavourable arbitration award received by the company in July 2025, with a final order in August 2025 seeking payment of $490.32 million plus related costs and interest. The company has filed an application with the appropriate forum in Singapore to set aside the award. No provision has been made in the financial results pending the final outcome.

Balance sheet

Total assets stood at ₹1,75,172 crore as of March 31, 2026, up from ₹1,56,711 crore a year ago. Non-current borrowings jumped sharply to ₹61,609 crore from ₹44,130 crore — indicating aggressive capex for the renewable expansion pipeline. Cash and cash equivalents were ₹707 crore versus ₹1,511 crore a year ago, with total bank balances (including fixed deposits) at ₹13,644 crore. Total equity (including minority) stood at ₹47,538 crore versus ₹42,606 crore in FY25.

The board recommended a final dividend of ₹2.50 per equity share (face value ₹1, 250%) for FY26, pending shareholder approval at the 107th AGM to be held on July 7, 2026. The record date has been fixed as June 23, 2026, with payment on or after July 10, 2026.

Shares of Tata Power closed 3.3% lower at ₹419 apiece on Tuesday, extending the broad market selloff. The stock has risen 7% during the past year, slightly outperforming the Nifty Next 50 index that has risen nearly 5.5% during the same period.