SJVN LtdQ1 FY26Power

SJVN Ltd

Q1 FY26 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→SJVN plans capacity additions with commissioning of 2,284 MW in FY '27, 650 MW in FY '28, and about 2,500 MW from FY '29 to '30.
→FY '26 revenue increased by 22% YoY to INR 3,545 crores, driven by tariff order recognition.
→SGEL expects improved profitability in FY '27 as new solar plants ramp up to full capacity.
→Buxar Thermal expected to move to profitability as PLF exceeds 70% in FY '27.
→Renewable Energy Implementing Agency awarded 16 GW of projects, with signed PSA of 6 GW; balance PPAs pending.
→Renewable tendering shows slower conversion due to DISCOMs’ adequacy plans and changing configurations; however, demand for renewable power with hybrid/storage solutions remains.
→Total generation in FY '26 was 13,302 million units, a 25% increase from previous year.
→Future growth targets (25,000 MW by 2030, 50,000 MW by 2040) are under review with a new business plan forthcoming.

Margin guidance

Category 3

→FY '26 PAT was INR 1,008 crores, a 4% increase from FY '25, despite challenges.
→Losses in subsidiaries SGEL and Buxar Thermal due to initial operations and lower PLF are expected to improve.
→Buxar Thermal plant projected to turn profitable in FY '27 as PLF surpasses 70%.
→Significant capacity additions planned: 2,284 MW in FY '27, 650 MW in FY '28, and 2,500 MW during FY '29-30.
→Focus on solar capacity expansion in near-term, with hydro projects commissioning from FY '29 onwards.
→Ongoing progress in Nepal hydro project aiming for commissioning by December 2028, adding to future earnings.
→Tariff and operational efficiencies expected to stabilize, with new business plan and realistic growth targets forthcoming.
→Curtailment issues being addressed (e.g., SVR at Bikaner) to ensure full capacity utilization.
→Overall, earnings and profits are expected to improve substantially from FY '27 onwards with capacity ramp-up and project stabilization.

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Fundraise plans

Yes

→The transcript does not explicitly mention any current or planned fundraising through equity.
→Regarding CAPEX, SJVN has a significant capital expenditure plan: around INR 9,400 crores for FY '27, INR 7,800 crores for FY '28, and INR 7,500 crores for FY '29.
→While discussing expansion and CAPEX funding, the management acknowledged the large CAPEX but did not specify the mode of funding (debt or equity).
→There's no direct statement about new debt or equity issuance in the provided pages, indicating no announced fundraising yet.
→The company is reviewing business plans and growth targets, which may lead to announcements on funding in the future.

Order book

- SJVN, as Renewable Energy Implementing Agency (REIA), has awarded contracts for around 16 GW (16,000 MW) renewable energy projects. - Out of these, PPAs (Power Purchase Agreements) signed for approximately 6 GW. - Balance 9-10 GW of PPAs are pending and under progress. - Due to multiple tenders from various agencies and DISCOMs’ changing requirements, the conversion of the pending 9 GW PPAs to firm orders remains uncertain. - Issues include the configuration of tenders (FDRE, pure solar, hybrid solar-wind), adequacy plans of DISCOMs, and tariff competitiveness. - Some solar tariffs in signed tenders are attractive (~2.53 to 2.54 INR/unit) compared to new state tenders (~2.8 to 2.9 INR/unit), encouraging potential sales. - Additionally, SJVN successfully awarded a 2000 MWh Battery Energy Storage System contract across UP and Haryana. In summary, the current orderbook is 6 GW signed PPAs, with around 9 GW pending, conversion of which remains uncertain but actively pursued.

Capex plans

Yes

→FY '26 CAPEX plan: INR 9,400 crores
→FY '27 CAPEX plan: INR 7,800 crores
→FY '28 CAPEX plan: INR 7,500 crores
→Total under construction portfolio includes:
→ - Four hydro projects (1,561.5 MW)
→ - Second unit of Buxar Thermal Power Plant (660 MW)
→ - Ten solar projects (1,705 MW)
→Focus on commissioning:
→ - 2,284 MW in FY '27
→ - 650 MW in FY '28
→ - Around 2,500 MW between FY '29 to FY '30
→Continued expansion in renewables:
→ - Awarded 16 GW renewable energy projects across solar, wind, hybrid, and storage
→ - Acting as Renewable Energy Implementing Agency
→New business plan under review to set realistic targets beyond earlier ambitious visions of 25,000 MW by 2030 and 50,000 MW by 2040.

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