Whalesbook
Mundra Plant Shutdown Hits Quarterly Earnings
The primary driver behind Tata Power's quarterly profit contraction was the shutdown of its Mundra Ultra Mega Power Plant in Gujarat. Operations ceased after its power purchase agreement with the state ended, leading to a significant drop in the thermal and hydro power segment's EBITDA and operating profit. This drag was substantial, impacting both top and bottom lines. However, a new supplemental PPA was secured in March 2026, and the plant resumed operations on April 1, 2026, meaning this headwind will not affect fiscal year 2027 results.
Record Full-Year Performance Bolsters Outlook
Despite the muted quarterly figures, Tata Power delivered a robust full-year performance, posting its highest-ever reported annual profit after tax (PAT) of ₹5,118 crore, a 7% increase year-on-year. While consolidated net profit attributable to owners dipped 5.6% to ₹3,747 crore due to the Mundra impact, annual EBITDA saw an 11% jump to ₹16,090 crore. Earnings per share (EPS) stood at ₹12.0 for FY26.
Renewables and Solar Lead Growth
The company's renewable energy business was a standout performer, with PAT before exceptional items surging 59% year-on-year to ₹1,994 crore. Tata Power commissioned 406 MW of utility-scale renewable capacity in Q4, bringing its total installed renewable capacity to 6.5 GW. The solar cell and module manufacturing business also showed strong momentum, with PAT more than doubling to ₹857 crore, supported by capacity expansion and high production yields. Residential rooftop solar revenue jumped significantly, indicating strong consumer demand.
Distribution and Transmission Shine
Tata Power's transmission and distribution (T&D) business contributed significantly, with FY26 PAT rising 49% to ₹2,978 crore. Its Odisha distribution companies, in particular, demonstrated marked improvement, with annual PAT jumping 84% to ₹809 crore as AT&C losses declined across the region. Operational transmission lines expanded considerably, with more under construction.
Hydropower Expansion in Bhutan
Separately, Tata Power deepened its clean energy partnership with Bhutan by amending an MoU to include the 404 MW Nyera Amari I & II Hydropower Project. This expands their joint hydropower portfolio to over 5,000 MW, reinforcing regional energy security and supporting India's peak demand needs. The companies also plan to develop solar PV projects in Bhutan.
Legal Cloud: Arbitration Award
Auditors flagged an unfavorable arbitration award received by the company in July 2025, with a final order in August 2025, seeking approximately $490 million plus costs and interest. Tata Power is challenging this award in Singapore, and no provision has been made pending the outcome. This represents a significant contingent liability.