Target: ₹430CMP: ₹378.60Tata Power’s pumped storage opportunity is an attractive long-term value driver. Based on the economics of the latest pumped storage project (PSP) bid, we estimate that the project could generate an equity IRR of around 20 per cent, with the initial investment recoverable in roughly five years despite the contract having a tenure of 40 years.Pumped storage remains a cost-competitive energy storage solution. Based on the latest SECI tender, PSP storage costs are estimated at around ₹4.6/kWh, compared with approximately ₹5.5/kWh for BESS based on the latest PSPCL tender and about ₹6.9/kWh for BESS, assuming a battery capex of $150/kWh.We value Tata Power through SOTP to arrive at our ₹430 price target. We value the regulated business (cost+ generation, transmission and distribution business) at 3x FY27 book value, Mundra cluster (includes Trust Energy Resources and Mundra-related coal mines) at 0.5x FY27 book value; solar PV manufacturing and EPC business at 11x FY27 EBITDA, Haldia plant at 10x FY27 EBITDA; renewable portfolio (adding about 6-GW pipeline till FY28), under-construction transmission projects and PSPs (2.8 GW addition by FY32) through DCF and other joint ventures at 20x FY27 earnings. For renewables, we account for capacity addition till FY28, post which we separately value the renewable business assuming a about 5 per cent market share for capacity additions till FY60. We have used a weighted average cost of capital of 9 per cent.Published on July 22, 2026