Tata Power Company LtdQ2 FY24
Tata Power Company Ltd Q2 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹395P/E: 34.2Market Cap: ₹1.3L CrSector: Power
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
Yes
Order
No
Capex
Yes
2 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 2- →Tata Power expects robust growth fueled by strong renewable capacity additions:
- → - 3 GW commissioning in FY25 and 4 GW in FY26, including both own and third-party projects.
- → - Currently, 8 GW capacity under implementation (5 GW own, 3 GW third-party EPC).
- →Significant capex of INR 20,000 crores planned for the year:
- → - ~55-60% towards renewables (manufacturing + utility scale projects).
- → - ~30% towards Transmission & Distribution (including ongoing projects in Delhi and Odisha).
- → - 10-15% towards thermal and pumped hydro, including the Bhutan project.
- →Rooftop solar business showing a 10x increase in inquiries, expected meaningful revenue contribution from Q3/Q4 FY25.
- →Focus on complex, hybrid, and FDRE projects with storage, targeting enterprise and industrial clients.
- →Transmission capacity to grow from FY27 onwards to support expanding renewable projects.
- →Continued market leadership in rooftop solar with 50-60% market share for quality products.
Margin guidance
Category 3- →Tata Power expects strong growth, supported by 19 consecutive quarters of capacity increases.
- →The company has an aggressive capex plan of INR 20,000 crores for FY '25, with ~55-60% allocated to renewables and manufacturing and 30% to transmission & distribution.
- →Renewable projects under implementation total ~8 GW (5 GW own, 3 GW third-party), with >3 GW commissioning in FY '25 and >4 GW in FY '26.
- →Hybrid and complex projects with storage will drive future growth post FY '27 as new transmission lines become available.
- →Improved profitability expected from renewable and transmission projects; roofing solar segment showing a 10x order uptick.
- →The Delhi Distribution business showed a significant profit jump aided by a onetime tariff order.
- →Credit rating upgrades (AA+ stable) are expected to reduce financing costs, enhancing profitability.
- →Earnings growth will be sustained by steady project execution, increased renewable capacity, and new business avenues like SMRs and pumped storage.
3 more insights locked — sign up free to unlock
Fundraise plans
Yes- →Tata Power has incurred large capex and its net debt has increased by INR 4,300 crores to INR 42,000 crores.
- →The company maintains a steady balance sheet with net debt to EBITDA less than 3x and net debt to equity less than 1.1x.
- →Credit rating has been upgraded from AA+ to AA+ stable by ICRA and CARE, which should help reduce financing costs and improve profitability.
- →No explicit mention of any new fundraising plans through debt or equity in the provided text.
- →Ongoing capex of INR 20,000 crores for FY includes 55-60% for renewables, 30% for transmission & distribution, and 10-15% for thermal and new investments.
- →The company is focusing on calibrated financial management while executing large projects with existing resources.
Order book
No- →Tata Power currently has about 8 GW of renewable projects under implementation: 5 GW own projects and 3 GW third-party EPC projects.
- →Fully tied-up pipeline for FY '25 and '26, expecting to implement over 3 GW in FY '25 and 4 GW in FY '26.
- →Orderbook for utility-scale solar EPC has not grown quarter-on-quarter from March 2024 as focus remains on completing ongoing projects.
- →New bidding for projects will commence after the majority of ongoing projects are implemented.
- →Transmission projects are proceeding well; recently won a 765 kV intra-state transmission project in Odisha to complete in 24 months.
- →Module manufacturing capacity of 4 GW is ramping up, with stabilization expected by Q3 FY '25.
- →Capricorn orders for solar pumped business are currently not active; no fresh orders in FY '24 or Q1 FY '25.
- →Large capex of INR 20,000 crores planned for FY '25 divided across renewables (55%-60%), transmission & distribution (30%), and thermal plus pumped hydro & Bhutan project (10%-15%).
Capex plans
Yes- →Tata Power has an ambitious capex plan of INR 20,000 crores for the year, on track for implementation.
- →About 55%-60% of this capex will go towards renewables, including renewable manufacturing plants and utility-scale projects.
- →Around 30% will be allocated to transmission and distribution projects, including ongoing distribution in Delhi and Odisha.
- →Approximately 10%-15% will be invested in thermal operations, pumped hydro, and the Bhutan hydro project.
- →The Bhutan hydro project requires an investment of INR 6,900 crores; Tata Power holds 40% equity and will handle sales and operations.
- →The 4 GW cell and module manufacturing plant is commissioned and stabilizing, with further capacity ramp-up expected.
- →Transmission business capex is ongoing, with plans to expand aggressive bids in renewables and transmission.
- →Pumped storage projects are progressing with approvals nearly in place, and govt. policy support is expected for these.
How does Tata Power Company Ltd rank vs peers in Power?
Pro feature1Tata Power Company Ltd
Rev 2Mar 3
See full Power sector rankings
Want more stocks like Tata Power Company Ltd?
Build an AI portfolio filtered by sector, market cap, and growth rank. Takes 2 minutes.
Build my portfolio