TATAPOWER - Tata Power Co. Ltd Share Price

During the earnings call on May 12, 2026, Tata Power management provided an optimistic outlook for the company and industry. CEO Dr. Praveer Sinha noted a modest increase in demand for power, rising by 5% to 6% since April, with expectations to exceed 270 gigawatts due to an ongoing heat wave and El Nino effects. The company reported a full-year PAT exceeding INR 5,000 crores, alongside an 11% EBITDA increase to INR 16,090 crores.

Key forward-looking points include:

1. Strong financial performance is expected to persist, driven by existing generation, transmission, distribution, and renewables operations. Q4 EBITDA rose to INR 4,216 crores, an increase of 10% year-over-year, with a PAT of INR 1,416 crores, up 8%.

2. The solar cell and module manufacturing plant reported a PAT of INR 857 crores, more than doubling its previous year performance. Similarly, rooftop solar installations have also grown significantly, with a yearly PAT of INR 499 crores.

3. Tata Power plans to complete nearly 5 gigawatts of renewable projects over the next two years, with 50% expected in the current fiscal year, enhancing its capacity to generate power.

4. The management anticipates a capital expenditure of INR 25,000 crores for FY '27, including utility-scale and distribution projects.

5. The company is focused on stabilizing operations, maintaining a net debt to EBITDA ratio of 3.3 and net debt to equity ratio of 1.2, ensuring financial discipline as it continues to grow.

6. Future growth drivers include renewable energy manufacturing and operational improvements in the Odisha DISCOMS, projecting peak performance in the upcoming financial year.

Overall, Tata Power's outlook is characterized by robust growth potential across various segments, enhanced operational efficiency, and a focus on renewable energy projects in response to increasing demand.

Question: Good evening, Dr. Sinha. You mentioned in your opening remarks that the capex for the financial year has been INR130 billion. This is meaningfully below the guidance that you had given to us in November in Odisha, which was INR250 billion. So, what really led to that guidance with 4 months remaining in the fiscal seeing such a sharp decline? And what is your guidance -- realistic guidance for FY '27?

Answer: Yes, Sumit, I acknowledge our guidance was initially misleading; it was about INR22,000 crores. We fell short due to delays in large utility scale projects because of right-of-way and TBCB-related issues. We are progressing on 600 megawatts of utility scale projects this quarter. I'm confident we will complete all deferred projects this financial year, maintaining our capital allocation pacing.

Question: So can you -- can Mr. Sanjeev sort of clarify what is the entire benefit that you have taken because of prior period regulatory orders at EBITDA and profit level in FY '26 and FY '25, how much is expected?

Answer: Sure. We're seeing favorable regulatory clearances from previous years. FY '25 saw INR333 crores in approvals, and FY '26 has reflected INR783 crores. While difficult to predict future claims, we expect some to materialize next year. It's a pipeline process; each quarter will provide better clarity on potential amounts.

Question: What is the IPP RE capacity that you expect to add in FY '27?

Answer: We expect to add around 2.5 gigawatts of renewable energy capacity in FY '27. All projects this year will be in-house execution, enhancing our control over production, especially from our new cell and module manufacturing, which will meet our own requirements.

Question: Can you provide some colour on the Gujarat SPPA? What is the agreement over there if you are sacrificing any profit -- sharing any profitability on coal, what's the quantum?

Answer: The Gujarat SPPA details are still under discussions with other procurers. Currently, we're following existing agreements and discussing potential profit sharing. Final numbers will be disclosed after all confirmations are received from all states involved.

Question: What is the curtailment impact in FY '26 and your expectation in FY '27?

Answer: Curtailments have been inconsistent; some lines have been commissioned allowing some evacuation. Quantifying curtailments is tricky, but evaquation has ranged from 20% to 80% depending on the region. We are actively working with transmission companies to mitigate future curtailments.

Question: Regarding the Mundra plant, is the entire plant operating under the supplementary PPA terms?

Answer: Yes, all five units of the Mundra plant operate under the supplementary PPA terms. Section 11 ensures operational continuity while we await final approvals from procurers, and billing is aligned with the agreed pricing in the SPPA.

Question: What are the key growth drivers for the next 2 years for EBITDA growth?

Answer: All segments will contribute positively: generation, transmission, distribution, and renewables, including rooftop solutions. With previous Mundra challenges resolved, we expect robust growth across these sectors going forward.

Question: Can you share the SPPA monetization timeline in relation to coal assets?

Answer: The decision on monetizing coal assets depends on market conditions and valuations we receive post-SPPA signings. It's premature to establish a timeline without assessing market dynamics. We will evaluate once we secure favorable pricing.

Question: What is the current status of your hydro projects and PPA agreements?

Answer: PPA agreements are in advanced approval stages. We're expecting swift renewals, and the initiatives we've previously undertaken are yielding results, enhancing our operational capabilities in hydroelectric projects.

Question: What's your capex guidance for FY '27 and projected asset additions?

Answer: Our capex target for FY '27 is approximately INR25,000 crores. This encompasses a diverse array of projects, including renewable energy, distribution improvements, and hydro initiatives. We anticipate leveraging existing project pipelines while remaining aligned with strategic goals.

Question: Can you clarify about the regulatory asset wind down in Delhi DISCOM?

Answer: The regulatory asset amortization will occur over six years until 2032. Both the Supreme Court and APTEL are monitoring this process, and we expect compliance with conditions outlined in the affidavit provided.