Tata Power's Q1 margin stays 15.95 points below utilities median
Revenue rose 5.63% YoY, but faster cost growth cut margin; other income was 31.86% of pre-tax profit.
Filed 27 Jul 2026, 16:49 IST · after market close · Tata Power Company Ltd (TATAPOWER)
Key takeaways
- Consolidated Q1FY27 revenue grew 5.63% YoY, but operating margin fell 1.88 percentage points as expenses rose 8.22%.
- Net profit rose 10.98% YoY even as profit before tax fell 9.76%, while other income equalled 31.86% of pre-tax profit.
- QoQ operating margin recovered 3.63 percentage points to 21.07%, but interest expense increased 8.61%.
Price around the results
Revenue growth did not convert into operating profit
Tata Power's consolidated revenue increased 5.63% YoY in Q1FY27, while expenses grew 8.22%; the gap reduced operating profit by 3.04%. The resulting 1.88-percentage-point margin contraction contrasts with a 27.86% QoQ revenue increase and a 3.63-percentage-point margin recovery. Sequentially, expenses grew 22.25%, slower than revenue, supporting the operating rebound.
Lower tax rate cushioned a mixed profit result
Pre-tax profit fell 9.76% YoY as interest expense rose 9.97% and depreciation increased 8.52%. Other income grew 28.18% YoY and accounted for 31.86% of pre-tax profit, making reported profit less dependent on operating earnings alone. QoQ, the tax rate fell 30.5 percentage points, cushioning earnings conversion, but net profit still declined 1.04% even as pre-tax profit rose 168.8%.
Margin recovered from Q4, but remains below peers
Operating margin moved from 22.95% in Q1FY26 to 21.24% in Q2FY26, 21.90% in Q3FY26, 17.44% in Q4FY26 and 21.07% in Q1FY27, so the latest quarter was a recovery rather than a continuation of the Q4 decline. Among eight Utilities peers that have reported, Tata Power's margin was 15.95 percentage points below the 37.02% median and ranked third from the bottom.
Record capex and rooftop orders broaden the expansion pipeline
The presentation reported record quarterly capital expenditure of Rs 5,375 cr in Q1FY27, alongside 371 MWp of solar rooftop installations. Management said the rooftop business won 387 MW of orders and ended the quarter with an order book of Rs 639 cr. The presentation flags a planned Q2 FY27 award for the main civil works package at the 1,125 MW Dorjilung HPP; management also said the 600 MW Khorlochhu HPP is expected to be commissioned in FY2029 and Dorjilung in FY2032.
Results were filed after market close
The results were filed after market close, so there is no post-results market move to assess. Across eight recent result reactions, the stock rose three times and fell five times, with a median absolute move of 1.76%, indicating that past reactions have more often been negative than positive.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹19,051 cr | ₹14,900 cr | +27.86% | +5.63% |
| Other income | ₹630 cr | ₹712 cr | -11.50% | +28.18% |
| Expenses | ₹15,038 cr | ₹12,301 cr | +22.25% | +8.22% |
| Operating profit | ₹4,013 cr | ₹2,599 cr | +54.41% | -3.04% |
| Operating margin (%) | 21.07% | 17.44% | — | — |
| Interest | ₹1,407 cr | ₹1,295 cr | +8.61% | +9.97% |
| Depreciation | ₹1,260 cr | ₹1,280 cr | -1.59% | +8.52% |
| Profit before tax | ₹1,976 cr | ₹735 cr | +168.80% | -9.76% |
| Tax | ₹422 cr | ₹381 cr | +10.75% | +18.30% |
| Net profit | ₹1,401 cr | ₹1,416 cr | -1.04% | +10.98% |
| EPS (₹) | ₹3.68 | ₹3.12 | +17.95% | +11.18% |
Operating margin of 21.07% compares with a Utilities sector median of 37.02% across 8 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Tata Power installed 371 MWp of solar rooftop capacity in Q1 FY27.
Guidance & outlook
- India is expected to see ₹9.2 trillion of transmission capex between FY25 and FY32E.
Planned next quarter
- The main civil works package for Dorjilung HPP is scheduled to be awarded in Q2 FY27.
Expansion
- Tata Power reported record quarterly capital expenditure of ₹5,375 crore in Q1 FY27.
- Khorlochhu HPP, a 600 MW Bhutan project, is expected to be commissioned in FY2029.
- The 1,125 MW Dorjilung HPP in Bhutan is expected to be commissioned in FY2032.
New orders
- The rooftop business won 387 MW of orders in Q1 FY27.
- The rooftop order book stood at ₹639 crore at the end of Q1 FY27.
New initiatives
- Dorjilung HPP received World Bank financing agreements totaling $515 million.
Competition
- The solar plant achieved an industry-leading yield of 96.3% for modules and 87% for cells.
What to watch
- Whether consolidated operating margin holds above 21.07%.
- Whether interest expense moves down from Rs 1,406.78 cr.
- Whether the rooftop order book increases from Rs 639 cr.