Analyst Concall
Tata Power to shift focus to own projects from third-party
This story was originally published at 22:52 IST on 30 October 2024
Register to read our real-time news.Informist, Wednesday, Oct. 30, 2024
Please click here to read all liners published on this story
--Tata Power: Targeting debt-equity ratio of 1.5-2 times
--Tata Power: Will place order for 3 GW wind turbine project before December
--Tata Power: Huge capacity addition will happen in Oct-Mar
--Tata Power: Odisha collections will pick-up pace in coming quarters
--Tata Power: Odisha collections were impacted by rains in Jul-Sept
--Tata Power: Will focus on own projects going ahead rather than third-party
--Tata Power: Most of our clusters did well Jul-Sept, helped profitability
--Tata Power: Will complete major portion of third-party order book by March
--Tata Power: Expect 600 MW Bhutan project work to begin in January
--Tata Power: Cell plant efficiency is the highest in India at this stage
--CONTEXT: Tata Power management comments in post-earnings analyst concall
--Tata Power: Expect higher demand for power in winter on extended monsoon
By Anand JC and Ketan Barot
MUMBAI – Tata Power Ltd. will look to produce energy for its own utility-scale and rooftop projects once it is done with the existing order book of third-party engineering, procurement, and construction projects, the management said in a post-earnings analyst conference call Wednesday. The company is looking to finish off third-party projects in Apr-Mar (2024-25), the management said.
Currently, Tata Power's order book is spread equally between its own solar rooftop projects and third-party projects, the company said. Tata Power is expected to commission a very large number of projects before the end of March 2025, and most would be third party, the management said.
The company expects to add "huge" solar energy capacity in the second half of FY25. In the past two quarters, the company has added 25-60 megawatt solar capacity. The company is looking to add 2-2.5 gigawatt of solar capacity every year. Tata Power's solar engineering, procurement, and construction projects' order book was INR 15.26 billion as of Sept. 30. The order book for this segment was INR 13.02 billion as of Jun. 30, and INR 15.88 billion as of Sept. 30, 2023.
The company's 600 megawatt hydropower project in Bhutan will commence operations from January, the company said. The diversion tunnel work has started at the site. Work will pick up pace once documentation and financial closure is achieved in November and December, the company said.
POWER DEMAND
The company saw muted power demand in Jul-Sept owing to an erratic monsoon extending into October. The company expects the effect of this to linger into a severe winter, pushing demand for power higher. The government has extended Section 11 till the end of the year. Section 11 gives authorities the power to ask power generation companies to operate and maintain output to avoid outages in a high-demand scenario. Tata Power's profit after tax in the September quarter increased 50% on year before exceptional items to INR 15.33 billion. The company attributed this rise to profitability in its renewable, generation, transmission, and distribution cluster.
Tata Power's net debt increased to INR 435.80 billion in the September quarter from INR 366.09 billion a year ago. The company's net debt-to-equity ratio year-to-date FY25 stands at 1.10 times, it said in its investor presentation. Terming the current debt scenario comfortable, the management said it is looking to maintain its leverage ratio in the range of 1.5-2 times going ahead.
The company's Mundra plant's coal conveyor system was damaged due to heavy rains in late August. The plant remained non-operational in September as a result, the company said. Post repair, it functioned at over 90% availability in October. The company expects this to increase to 95-97% in November and December.
Tata Power's Odisha plant faced a tough Jul-Sept in terms of collections due to heavy rains, especially in the remote and semi-urban areas, the company said. However, the collection improved in September and the company expects the shortfall to be recovered in Oct-Dec. Wednesday, shares of Tata Power closed at INR 427 per share on the National Stock Exchange, up 0.4%.
Tata Power was seeking bids for the supply of wind turbines with a capacity of over 3 GW to be installed at its wind-solar hybrid facilities, The Economic Times had reported earlier in October. The company informed analysts that it expects to place orders for the same before December. End
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
