SJVN - SJVN LIMITED Share Price

SJVN Limited's management provided an optimistic outlook during the Q4 FY '26 earnings call. They reported a 25% increase in total generation from all power stations, reaching 13,302 million units compared to 10,646 million units in the previous year. Significant milestones included the commissioning of the first unit of the 660 MW Buxar Thermal Power Plant and the 1,000 MW Bikaner Solar Power Project, both of which substantially enhance SJVN's energy production capacity.

Key forward-looking points discussed include:

1. Capacity Expansion: SJVN plans to add approximately 2,284 MW of capacity during FY '27, primarily from the second unit of Buxar and various solar projects. The ambitious long-term goal remains to expand capacity to 25,000 MW by 2030.

2. Financial Performance: Revenue from operations increased by INR 648 crores year-on-year, totaling INR 3,545 crores for FY '26. The company's profit after tax rose to INR 1,008 crores, up 4% from the previous year.

3. New Projects: The Buxar Thermal Power Plant is expected to generate 9,828 million units annually, with 85% of this capacity serving Bihar's power demand. Also, critical hydro projects in Nepal are on track for commissioning by December 2028.

4. Investment Plans: SJVN's capital expenditure (CAPEX) guidance for FY '27 is INR 9,400 crores, with reduced CAPEX projected for FY '28 and FY '29, amounting to INR 7,800 crores and INR 7,500 crores, respectively.

5. Market Conditions: While there may be challenges due to market demand and the structure of power purchase agreements (PPAs), SJVN remains committed to adapting to regulatory changes and leveraging its renewable energy portfolio.

Overall, SJVN's management expressed confidence in overcoming challenges while continuing to engage actively with stakeholders to secure future growth.

Here are the major questions and their detailed answers from the Q&A section of the earnings call transcript:

1. Question: "Can you please explain why there is a loss on the consol level? Is it due to the fact that you have started booking the revenue for the new power plant, which is at a much lower PAF and maybe much lower tariff because the final tariff order is still to come? Is that the right understanding?"

   Answer: The losses were primarily in SGEL, with a loss of INR 257 crores, and Buxar Thermal, with around INR 92 crores. Buxar operated for only three months at 60% PLF. Once the PLF exceeds 70%, we expect profitability. The lower capacity utilization led to costs being booked without corresponding revenues from generation.

2. Question: "Is it possible to share the plant availability factor for SGEL and Buxar for the quarter and the year?"

   Answer: Buxar's plant availability factor was around 70%. The availability for SGEL reflects similar trends but specifics will be available in the investor presentation.

3. Question: "And what is the SGEL revenue, EBITDA, and PAT for the FY '26?"

   Answer: SGEL's revenue was INR 510 crores compared to INR 232 crores last year. Expenses totaled INR 802 crores against INR 415 crores last year, resulting in a loss of INR 258 crores, up from a loss of INR 151 crores in the previous year.

4. Question: "Can you provide guidance on new capacity addition in FY '27 and FY '28?"

   Answer: For FY '27, we will add 660 Megawatts from Buxar and 69.5 Megawatts from the Dhaulasidh Hydro Project, along with approximately 1,555 Megawatts of solar capacity. For FY '28, we plan to add around 650 Megawatts, primarily from solar projects.

5. Question: "What is the progress on the Nepal hydro power project? When are you expecting commissioning?"

   Answer: The Nepal hydro project is advanced, although we faced geological issues at the dam which have now been resolved. We expect to commission all units by December 2028.

6. Question: "So, what is the regulated equity for Buxar right now?"

   Answer: Currently, the regulated equity for Unit-1 of Buxar is approximately INR 2,100 crores, given that only Unit-1 is capitalized. Once both units are operational, the total regulated equity will rise to around INR 4,000 crores.

7. Question: "Has there been a significant increase in expenses due to commissioning of Unit-1 of Buxar?"

   Answer: Yes, the increase in expenses is due to partial operations where the plant was running at 60% PLF. There are fixed costs incurred even when operating at lower capacity, affecting the profit margins.

8. Question: "Do you see any slowdown in renewable tendering for this year and next fiscal?"

   Answer: There may be some slowdown due to oversupply of tenders and varying demand from DISCOMs. We have awarded a contract for about 16 Gigawatts but signed PPAs for only 6 Gigawatts so far.

9. Question: "What is our CAPEX guidance and how do we plan to fund this large CAPEX?"

   Answer: We have a CAPEX plan of INR 9,400 crores for this fiscal year, with plans of INR 7,800 crores and INR 7,500 crores for FY '28 and FY '29 respectively. Funding will be reviewed as part of our updated business plans.

10. Question: "Are you experiencing curtailment of solar power projects, and how are you mitigating it?"

Answer: We face curtailment of around 120 Megawatts at the Bikaner plant due to SVR requirements. We expect to resolve this issue by commissioning the required equipment by October 2026, allowing us to operate at full capacity.

These summaries provide a concise overview of significant inquiries and responses from the earnings call, maintaining factual accuracy and character limits as requested.