Shares of Tata Power traded in positive territory on Wednesday, October 14, gaining 1.20% to ₹349.15 as of 10:21:36 AM IST. However, Goldman Sachs has retained its 'Sell' rating on the stock, arguing that the risk-reward profile remains unfavourable despite a marginal increase in its price target. The brokerage raised Tata Power's 12-month target price to ₹305 from ₹300, implying a downside of 13.5% from the current market price of ₹352.45. Analysts Nikhil Bhandari and Nirmal Gopi believe the stock's valuations remain unattractive at 23 times estimated FY28 earnings and 12 times FY28 enterprise value to EBITDA.
According to a press release from Tata Power, the company has built a 2.8 GW data centre opportunity pipeline across 18 leading data centre players, spanning renewable energy, transmission and distribution, and integrated infrastructure solutions. As reported by The Economic Times, the company is positioning itself as more than a conventional electricity supplier to data centre operators. Its proposed solutions include powered land, grid connectivity, renewable energy, energy storage, cooling systems and utility infrastructure to support hyperscale and advanced data centre facilities. The company is emerging as a preferred partner for India's fast-growing data centre ecosystem, expanding its role beyond power supply to provide a comprehensive suite of solutions.
As reported by The Economic Times, Tata Power's data centre opportunity pipeline comprises approximately 430 MW of upcoming load under its distribution network, 1,236 MW of transmission-linked opportunities and 1,150 MW of green energy capacity under active engagement. The company is currently working with 29 active workstreams involving 18 leading global and domestic data centre operators, playing a key role in developing some of India's largest hyperscale and AI-ready digital infrastructure projects. The pipeline represents engagements and prospective business across multiple projects, though the company statement does not establish that the entire 2.8 GW pipeline has been converted into confirmed orders or contracted revenue.
Goldman Sachs revised its earnings forecasts across FY27-FY29, with mixed changes reflecting updated business assumptions. For FY27, the brokerage lowered its EPS estimate to ₹13.80 from ₹14.55. For FY28, it cut its estimate to ₹15.09 from ₹15.86, while its FY29 EPS estimate increased to ₹18.46 from ₹16.90. The revisions reflect a mixed earnings outlook, with near-term pressures balanced by contributions from emerging businesses and the longer-term expansion of regulated assets. Goldman Sachs expects profit growth to moderate after FY27, forecasting profit after tax growth of 18% in FY27, easing to around 15% CAGR over FY27–FY30.
According to The Economic Times, Tata Power is strengthening its transmission infrastructure in the Mumbai Metropolitan Region to address power requirements of large data centre developments. The company is upgrading its 110 kV and 220 kV network, improving transformation and transmission capacity, and building network redundancy to support reliable supply. These initiatives are part of the company's ₹15,000 crore Mumbai Grid Upgradation and Expansion Plan, which includes a 400 kV transmission ring network and investments to support rising electricity demand and improve regional grid resilience. The company is developing new receiving stations and advancing a 400 kV transmission ring network, creating a resilient, secure and future-ready grid capable of supporting the next wave of data centre growth in the region.
As India strengthens its position as a global AI and digital infrastructure hub, energy availability will be a critical enabler for the country's data centre expansion. According to the Ministry of Power, based on CEA estimates, AI-led data centres could add approximately 26.3 GW of electricity demand by FY2031-32. This significant growth trajectory supports Tata Power's strategic positioning in the data centre ecosystem, with the company well-positioned to capitalize on the accelerating demand from AI, cloud and digital platforms. However, Goldman Sachs sees better risk-reward opportunities elsewhere in the sector and highlighted NTPC and Power Grid Corporation of India as stocks on which it has Buy ratings. The brokerage's refreshed scenario analysis points to around 14% upside in a bull case against 33% downside in a bear case.
