Tata Power's standalone margin falls as costs outpace sales
Net profit surged QoQ, but the increase was driven mainly by other income while operating margin declined for a second straight quarter.
Filed 11 Nov 2026, 17:20 IST · after market close · Tata Power Company Ltd (TATAPOWER)
Key takeaways
- Standalone operating margin fell 9.62 percentage points QoQ to 11.38% as expenses grew 20.42% against 7.35% revenue growth.
- Net profit rose 153.79% QoQ, but other income accounted for 118.67% of pre-tax profit.
- Tata Power's 11.38% margin was 17.52 percentage points below the 28.9% Utilities peer median across 27 reporters.
Price around the results
Expenses erase the quarter's revenue momentum
Tata Power's standalone revenue grew 7.35% QoQ, but expenses rose 20.42%, pulling operating profit down 41.8% and margin lower by 9.62 percentage points. The year-on-year comparison is similar: revenue increased 132.65%, while expenses rose 172.13%, leaving operating profit up only 9.26% and margin down 12.86 percentage points.
Other income, not operations, drives reported profit
Other income of Rs 1,003.56 cr represented 118.67% of pre-tax profit, making it the main support for the reported earnings increase. Pre-tax profit rose 65.58% QoQ even as operating profit fell, while net profit increased 153.79%. The tax rate rose 7.79 percentage points QoQ to 26.75%, partly limiting the benefit from the higher pre-tax profit.
Margin falls for a second consecutive quarter
Operating margin declined from 22.16% in Q4FY26 to 21.00% in Q1FY27 and 11.38% in Q2FY27. The margin was 17.52 percentage points below the 28.9% median for 27 Utilities companies that had reported, placing Tata Power fourth from the bottom.
Management flags grid expansion and renewable curtailment
Management said India's transmission capex requirement is anticipated at Rs 9.2 trillion between FY25 and FY32E, while its Mumbai grid plan includes a 400 kV ring and 18 new substations. The presentation said renewable generation curtailment in Rajasthan and Gujarat partly offset renewable generator performance. Management also said main civil works for the Dorjilung HPP are scheduled for award in Q4 FY27, with commissioning expected in FY2032.
No market reaction yet; past responses skew negative
The standalone results were filed after market close, so a market reaction is not yet available. Across the past eight results, the stock rose three times and fell five times, with a median absolute move of 1.76%, indicating that its typical post-results move has been modest but more often negative.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,107 cr | ₹5,689 cr | +7.35% | +132.65% |
| Other income | ₹1,004 cr | ₹191 cr | +424.76% | +30.29% |
| Expenses | ₹5,412 cr | ₹4,494 cr | +20.42% | +172.13% |
| Operating profit | ₹695 cr | ₹1,195 cr | -41.80% | +9.26% |
| Operating margin (%) | 11.38% | 21.00% | — | — |
| Interest | ₹542 cr | ₹556 cr | -2.50% | +12.55% |
| Depreciation | ₹311 cr | ₹319 cr | -2.52% | +9.67% |
| Profit before tax | ₹846 cr | ₹511 cr | +65.58% | +31.86% |
| Tax | ₹226 cr | ₹97 cr | +133.57% | +49.99% |
| Net profit | ₹704 cr | ₹277 cr | +153.79% | +63.29% |
| EPS (₹) | ₹2.20 | ₹0.87 | +152.87% | +64.18% |
Operating margin of 11.38% compares with a Utilities sector median of 28.90% across 27 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Guidance & outlook
- India is anticipated to require ₹9.2 trillion of transmission capex between FY25 and FY32E.
- Mumbai peak demand is projected to rise about 40% to 6,500 MW by 2031.
- Khorlochhu HPP is expected to be commissioned in calendar year 2029.
- Dorjilung HPP is expected to be commissioned in FY2032.
Expansion
- The Mumbai grid plan includes a five-year plan, a 400 kV ring and 18 new substations.
- Main civil works for Dorjilung HPP are scheduled to be awarded in Q4 FY27.
Problems & risks
- Renewable generation was curtailed in Rajasthan and Gujarat, partly offsetting renewable generator performance.
What to watch
- Whether operating margin recovers from 11.38% after two consecutive quarterly declines.
- Whether expenses continue to grow faster than revenue after rising 20.42% versus 7.35% QoQ.
- Whether other income remains below its current 118.67% share of pre-tax profit.