Analyst Concall
Tata Power plans INR 250-bln capex for FY26
This story was originally published at 21:49 IST on 14 May 2025
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--Tata Power: Expect India's peak power demand to reach 270 GW in FY26
--CONTEXT: Comments by Tata Power mgmt in post-earnings call with analysts
--Tata Power: See power demand growth 5% in FY26, same as FY25
--Tata Power: On track to double PAT, EBITDA by 2030
--Tata Power: Plan capex of INR 250 billion in FY26
--Tata Power: Co's net debt currently at INR 447 billion
--Tata Power: About 60% of FY26 capex for renewable business, 30% for T&D
By Sunil Raghu and J. Navya Sruthi
AHMEDABAD/MUMBAI – Tata Power Co. Ltd. has planned capital expenditure of nearly INR 250 billion for the financial year 2025-26 (Apr-Mar) to expand the capacity of its renewables, transmission and distribution, and electricity generation businesses, the management told analysts at a post-earnings conference call Wednesday.
In FY25, the company had invested INR 162 billion towards capital expenditure, much below its original target of INR 210 billion, owing to delays in project execution, the management said. The remainder will overflow into FY26, it said, without specifying whether the current year's target of INR 250 billion includes the deferred capital expenditure from FY25.
The management said that while the capital expenditure would be 'dynamic' and used across multiple projects, broadly 60% would be invested in the renewables segment and 30% in the transmission and distribution segment.
Speaking of the demand for electricity in India, the Tata Power management said it expects demand to grow 5% in FY26. In FY25, too, demand had grown 5%, though growth slowed to 4% in the March quarter. The country's biggest private-sector power transmission and distribution company expects peak demand for power in the country to touch a new high of 270 GW in FY26, from 250 GW in FY25.
In the March quarter and FY25, higher sales of power from all of the company's generating plants, ramping up of all module and cell lines in Tirunelveli, and significant strides in the solar rooftop business across India contributed significantly to the overall growth. In the quarter under review, the distribution segment recorded 73% on-year growth in net profit, driven primarily by distribution in Odisha, the company said in a press release after releasing its results.
The management said the company's solar plants are operating at 90% capacity and in FY25 it supplied solar modules to generate up to 3,300 megawatts of power. Of this, 913 MW solar modules and 650 MW solar cells were supplied in the March quarter.
The management said the company would continue to be aggressive in buying land for renewable projects and seeking transmission network connectivity parallelly.
In FY25, Tata Power commissioned over 2.5 gigawatts of renewable capacity--comprising 1 GW of in-house utility-scale projects, 600 MW of rooftop solar, and 900 MW for third-party customers. The company has nearly 3 GW capacity under development across states. It has secured over 6,800 MW of grid connectivity and acquired more than 30,000 acres of land to set up projects in the pipeline. The management said it is committed to the goal of achieving 70% of clean energy by 2030.
Currently, all five units of 800 MW each at the company's 4,000 MW coal-fired power plant at Mundra in Gujarat are in operation, the management said, compared to four in FY25. It, however, said the company remains committed to phasing out all its coal-fired plants by 2045.
The company reported a consolidated net profit of INR 10.43 billion for the March quarter, up 16.5% from INR 8.95 billion a year ago. Its consolidated revenue for the quarter was INR 170.96 billion, up 7.9% from INR 158.47 billion a year ago. The company's net debt stood at INR 447 billion.
The management said Tata Power is on track to double its net profit and earnings before interest, tax, depreciation, and amortisation by 2030. Specifically, it seeks to attain INR 100 billion in net profit and an EBITDA of INR 300 billion by 2030.
For FY25, the company recorded consolidated net profit of INR 39.71 billion on a consolidated revenue of INR 654.78 billion. Its underlying EBITDA for FY25, including those of joint ventures and associates, came in at INR 152.61 billion.
Wednesday, shares of Tata Power closed nearly 2% higher at INR 396.95 on the National Stock Exchange. End
Edited by Rajeev Pai
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