Analyst Concall
Tata Power plans INR-100-bln capex Jan-Mar, INR 220 bln FY25
This story was originally published at 22:06 IST on 4 February 2025
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--Tata Power: To be cautious on 3rd party EPC orders till current orders over
--Tata Power: Have large third party EPC book, most of them over by FY26
--Tata Power: Target 2.0-2.5 GW of renewables power installation every year
--Tata Power: Ordered 1,100 MW wind turbines, to be commissioned in 12 months
--Tata Power: Current net debt at INR 447 bln
--Tata Power: Will spend INR 100 bln in capex in Jan-Mar
--Tata Power: Spent INR 120 bln capex in Apr-Dec, equal to FY24 capex
--Tata Power: Expect 265-270 GW peak demand in summers
--Tata Power: Expect summer this year to be more intense than last year
--Tata Power: Demand for power picked up in last one month
--Tata Power: Demand for power in last 9 months high but not as expected
By Sunil Raghu and Akshita Kumar
AHMEDABAD/MUMBAI – Tata Power Ltd plans to spend nearly INR 100 billion in Jan-Mar, taking the total spend in capacity expansion for 2024-25 (Apr-Mar) to INR 220 billion, the company management said today.
In Oct-Dec, the company's revenue and net profit were driven by robust growth in the renewable energy segment, strong execution by its solar power arm, and improved margins, Tata Power Solar Ltd. The company reported a consolidated net profit of INR 10.31 billion for the December quarter, up 8% from INR 9.53 billion in the year-ago quarter. The company's consolidated revenue for the quarter was INR 153.91 billion, up 5% from INR 146.51 billion a year ago. The company's net debt stood at INR 447 billion.
Speaking to analysts post Oct-Dec earnings, Tata Power management said that they had already spent INR 120 billion in capex during the last nine months, which also happens to be capex the company spent in FY24. They said that their entire capex would be across multiple projects, whether it is in the renewable space, in group captive, in manufacturing 4 gigawatts of solar cells and modules, or in transmission and distribution segments.
The company management said that they were committed to their overall goal of achieving 70% of clean energy by 2030. Of this, they are already at 43% and with various projects under implementation, "we should be in a position to meet these targets". The company management reiterated its intent of adding 2 gigawatts to 2.5 GW capacity every year. In the first nine months of current financial year, the company has already added 865 megawatts of power capacity, highest among all the renewable plants in the country. Additionally, 600 MW of projects are lined up for completion this quarter, in addition to projects for third-parties.
The company has also ordered for 1,100 MW of wind turbines for their complex projects and all of them will get commissioned in next three to 12 months. There is another 1.6 GW of wind turbines that the company is likely to order and all in the "next 60 days", the company management said.
The company management said that with a large number of projects on hand, they would first want to execute all these projects before taking more orders, especially third party EPC orders. They hope to complete their large third party EPC book by FY26.
Speaking of the demand for electricity, Tata Power said that while the demand for power had gone up in the last nine months, it was not to the extent seen in earlier years. However, things have changed in last one month and the demand for electricity has gone up. The management expects the summers to be "much more intense" compared with the last year and see peak power demand reach nearly 265-270 GW, from 230 GW currently. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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