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Informist, Tuesday, May 12, 2026

 

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--Tata Power: Capex for FY28 likely to be similar to that for FY27
--Tata Power: Co eyeing 2 x 220 MW nuclear energy capacity
--Tata Power:See FY27 capex over INR 250 bln, including unfinished FY26 works
--Tata Power: See better returns from all segments going forward
--Tata Power: FY26 capex below guidance as some projects got delayed in Q4
--Tata Power: FY26 capex at INR 130 bln vs INR 220 bln guided
--CONTEXT: Tata Power mgmt's comments in post-earnings call with analysts
--Tata Power: See peak power demand over 270 GW on heat wave, El Nino impact

 

By Sunil Raghu and Shakshi Jain

 

AHMEDABAD/NEW DELHI – Tata Power Co. Ltd. sees its capital expenditure for 2026-27 (Apr-Mar) at over INR 250 billion, intended for completing some unfinished work from FY26 that got delayed in the March quarter, apart from some projects lined up for the year, the company's management told analysts at a post-earnings call Tuesday. Tata Power had spent INR 130 billion as capital expenditure in FY26, as against INR 200 billion-INR 250 billion guided for the year.

 

The management said it was trying to complete some of the projects, including around 600 megawatts of large utility projects, in the current quarter. Similarly, it has some transmission projects in the pipeline that it is executing. "And those of which we missed out in the last year, we will complete all of them in this financial year. So, that's why our target for yearly investment continues to be the same. And there may be certain development by a quarter or two, but otherwise we are very much on track," Managing Director and Chief Executive Officer Praveer Sinha told analysts. 

 

The thermal and renewable power generating, transmission, solar cell and module maker reported a better-than-expected net profit of INR 9.96 billion for the March quarter, down nearly 5% on year. Its revenue from operations for the quarter fell nearly 13% on year to INR 149 billion, well below analysts' expectations of INR 164 billion. However, the management sees better returns for all its segments going forward.

 

What also gives it immediate optimism is peak power demand in the country, which is already touching 256 gigawatts for a day. "We do expect that in the next one to two months, this will cross 270 GW, and this is because of the heat wave that we see across the country. And also because of the prediction that we will have severe impact because of El Nino," Tata Power's management said.

 

The company also completed supplementary power purchase agreement for a 4,000 MW thermal power plant at Mundra in Kutch district, with the Gujarat government operationalising the project after a gap of nearly nine months on Apr. 1, 2026. The management said it expects to finalise supplementary power purchase agreements with four other states – Rajasthan, Haryana, Himachal Pradesh and Punjab, in the next four to six weeks. "We are already operating the plant under Section 11 (of the Electricity Act). But with the understanding that the tariff will be as per the SPPA," the management said.

 

Tata Power bagged the Mundra project through its wholly-owned subsidiary, Coastal Gujarat Power Ltd., via competitive tariff-based bidding in 2006, quoting 55% of the fuel cost as a fixed component and a levelised tariff of INR 2.26 per unit. Coastal Gujarat Power, which has since been merged into Tata Power, signed a similar power purchase agreement with all the five states, including Gujarat. Tata Power used imported coal from Indonesia to fire the Mundra plant. The dispute arose when Tata Power began incurring additional cost as Indonesia levied duties on coal export. Tata Power sought to pass on this additional cost but was opposed by the states with signed PPAs, as the agreements did not allow pass-through of increases in imported coal costs. After litigation across multiple forums, the Supreme Court in February 2022 approved a settlement between Gujarat Urja Vikas Nigam and Tata Power.

 

The management stated that as per the new agreement, this rise in cost of coal or any additional duty imposed by the Indonesian government will be passed through to the state governments.

 

The company is also looking to set up a 2X200 MW nuclear power plant, stating that it has already identified the land and was working with three state governments and completing detailed project reports. "We have also taken up water allocation for which necessary approvals have been issued to us, and so on in the pipeline. We are also carrying out detailed geotechnical studies of each of these," the management said.

 

Despite these plans, the company sees capital expenditure for FY28 to remain similar to that for the current financial year, at over INR 250 billion. On Tuesday, the company's shares ended 3.4% lower at INR 418.40 on the National Stock Exchange. Tata Power announced its March quarter earnings after market hours.  End

 

Edited by Tanima Banerjee

 

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