SJVN - SJVN LIMITED Share Price

Management provided a positive outlook for SJVN Limited, emphasizing significant milestones achieved and ambitious targets for ongoing and future projects.

Key forward-looking points highlighted by management include:

1. Capacity Expansion: SJVN plans to commission an additional 4,995 megawatts in FY26, which includes 1,320 megawatts from the Buxar Thermal Power Plant and 3,675 megawatts from solar projects. The commissioning is expected to occur between June 2025 and March 2026.

2. Upcoming Projects: The company aims to complete its 1000 megawatt capacity solar projects by October 2025, with commercial operations already achieved for the 320 megawatt Bikaner Solar Power project.

3. Power Generation Targets: SJVN reported a total power generation of 10,647 million units in FY25, a notable increase of 25.44% from the previous year. The flagship Nathpa Jhakri Hydro Power Station achieved 7,421.45 million units, and Rampur Hydroelectric Power Station achieved 2,074 million units.

4. PPA Agreements: Recently signed Power Purchase Agreements (PPAs) for projects totaling 210 megawatts from Luhri, 115 megawatts from the Sunni Dam, and 200 megawatts from the Arun 3 Hydro Electric Project were emphasized as crucial for future revenue generation.

5. Capital Expenditure Guidance: The management mentioned a capex of INR 7,800 crores for FY25, with targets of INR 8,300 crores for FY26 and INR 12,000 crores for FY27, indicating substantial investment in expanding capacity.

6. Renewable Energy Initiatives: SJVN has been recognized as a key player in achieving the government's 500 gigawatt renewable energy target by 2030, with 7.5 gigawatts tender floated for FY24-25, out of which letters of awards have been issued for 2.4 gigawatts.

7. Financial Projections: An incremental debt of INR 2,000 crores is anticipated for FY26 to support ongoing projects, with a target to generate around INR 200 crores in trading margin through the Renewable Energy Implementing Agency (REIA) by FY27.

Overall, management conveyed a robust growth trajectory focused on renewable energy projects, cost-effective power generation, and operations efficiency.

Question 1: "Sunni projects, I think there is some court case going on regarding the case between the government of Himachal Pradesh and SJVN. Are we still proceeding with the construction of these projects or what is the status? If you can let me know that will be great."

Answer: Yes, there are ongoing cases with the government of Himachal Pradesh, but this is not hindering our construction. Until a decision is made on project handover or continuation, we are progressing with all three projects involved in the dispute.

Question 2: "Just in case the government of HP decides to take over the projects or if they win the court case, what will happen to all the expenses we have incurred on this project?"

Answer: They will reimburse all incurred costs as per the understanding conveyed to them by the central government, including expenses incurred up to the final decision.

Question 3: "But will there be some interest payments on those expenses or will it be just the amount that we will have to redeem from the government?"

Answer: They will reimburse us along with interest on all costs we have incurred, both past and future, until a final decision is taken.

Question 4: "Why has the other income declined nearly 50% in this quarter?"

Answer: The decline in other income is due to our growth phase, as most capital is now deployed in under-construction projects, reducing the funds available for fixed deposits and thus affecting interest income.

Question 5: "What was the capex done for FY25 and capex guidance for FY26-27?"

Answer: The capex for FY25 was approximately INR 7,800 crores, with guidance of around INR 8,300 crores for FY26 and INR 12,000 crores for FY27.

Question 6: "Can you share the progress of your pre-construction project Italian hydroelectric project in Arunachal Pradesh?"

Answer: Currently, we are awaiting forest and environmental clearances and have completed land acquisition processes. We aim to start construction by the end of this year once all approvals are secured.

Question 7: "What is the regulated equity currently and how will it be by the end of FY26 and FY27?"

Answer: Currently, our regulated equity is INR 1,076 crores. By the end of FY26, it will include INR 869 crores from Buxar, bringing it to approximately INR 1,945 crores by FY27.

Question 8: "Was there any exceptional or non-recurring item in Q4 FY25?"

Answer: There are no exceptional items in the Profit and Loss account for FY25; exceptions were only noted in FY24.

Question 9: "So what will be the additional debt that we will be taking this year to complete the 5,300 megawatts approximately that we are adding this year?"

Answer: Most of the debt for under-construction projects is already arranged. We may raise another approximately INR 2,000 crores in FY26 if required based on project progress.

Question 10: "What would be the revenue guidance for the next few years?"

Answer: We do not provide specific revenue guidance as a company policy. However, we aim to maintain strong growth alongside our ambitious projects and capital expenditure plans.