Is Tata Power Co. overvalued or undervalued?

As of 4 June 2025, Tata Power Co. has moved from a fair to an attractive valuation grade. The company is currently considered undervalued. Key ratios include a PE ratio of 31.57, an EV to EBITDA of 12.92, and a PEG ratio of 1.99, which suggest that despite its higher valuation metrics, the growth potential justifies the current price. In comparison with peers, NTPC is rated as very attractive with a PE of 13.78 and an EV to EBITDA of 10.37, while Adani Power is classified as expensive with a PE of 16.55. Tata Power's dividend yield of 0.50% and ROCE of 11.23% further support its attractiveness in the power sector. Notably, Tata Power has outperformed the Sensex in the 1-week and 1-month periods, reinforcing its positive valuation outlook.