S&P Global Ratings has elevated the credit rating of Tata Power from BB+ to BBB-, accompanied by a positive outlook.

What Happened: The move followed S&P Global Ratings placing Tata Power on credit watch with positive implications in June 2024. “We believe the potential for extraordinary support for Tata Power Co. Ltd. from Tata Sons Pte. Ltd. is stronger than we previously anticipated,” the S&P Global Ratings report stated.

The report underscored Tata Power’s consistent growth in business scale and diversity, with a majority of its cash flows being predictable. The positive outlook mirrors the outlook on the sovereign credit rating on India, as the rating is capped at the level of the sovereign.

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The S&P Global Ratings report also noted that Tata Power’s close linkage to the Tata brand and legacy as a key asset under the group’s umbrella reinforces the expectation of strong extraordinary support if needed.

Earlier in August the company’s consolidated net profit for the quarter ended June 30 was ₹970.91 crore, slightly lower than the ₹972.49 crore it posted in the same quarter last year and just below analyst estimates of ₹1,005 crore.

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