TATAPOWER - Tata Power Co. Ltd Share Price

Management Outlook:
Tata Power anticipates robust power demand (peak 265-270 GW) driven by intense summer and economic growth. The government's focus on renewable energy (PM Surya Ghar expansion, nuclear reforms) offers growth opportunities. The company aims to achieve 70% clean energy by 2030 (currently at 43%) through renewables, rooftop solar, and potential nuclear ventures.

Key Highlights:

1. Financial Performance: 21st consecutive quarter of PAT growth; renewable EBITDA surged 38% YoY. Rooftop solar revenue crossed INR 500 crore in Q3.
2. Capacity Expansion:
   • Solar/Wind Projects: 2"“2.5 GW annual addition target.
   • Manufacturing: 4 GW solar cell/module plants (2 GW operational, 2 GW stabilizing).
3. Capex & Debt: Invested INR 12,000 crore in 9M FY25; plans INR 22,000 crore for FY25. Net debt at INR 44,700 crore (debt/equity: 1.1:1).
4. Government Initiatives:
   • PM Surya Ghar: Targeting 3 million households under rooftop solar.
   • Nuclear: Exploring private participation post-policy clarity.
5. Transmission/Distribution:
   • Odisha operations improving (lower AT&C losses).
   • Four transmission projects to complete by FY26.
   • Pursuing PPP discom bids (e.g., Uttar Pradesh).
6. Emerging Opportunities: Pumped hydro (Bhivpuri project underway), third-party EPC, and ALMM-driven module sales.

Challenges: Policy clarity on nuclear investments, timeline for ALMM implementation (cell manufacturing by mid-2026), and managing project execution risks. The focus remains on disciplined growth with stable financial metrics.

Question 1:
Mohit Kumar (ICICI Securities): "Good evening sir and thanks for the opportunity. So my first question is on the nuclear power business. What is your expectation of the new business model? Is it fair to expect that this will be a cost-plus kind of model? And the question is that, do you think the time line of the small model nuclear reactor can you reduce to 3 to 4 years?"
Answer:
Nuclear power projects require 24 months for regulatory approvals and 4"“5 years for construction. New technologies may expedite timelines, but clarity on policy, fuel sourcing, and partnerships is pending. Tata Power aims to explore opportunities for 24/7 clean energy solutions post-policy finalization.

Question 2:
Mohit Kumar (ICICI Securities): "Have you heard anything incrementally on the approved list of module manufacturers (ALMM), is it being prepared or do you think it will get published over maybe with a delay of 4 to 6 months? And how do you think about the implementation of this?"
Answer:
The ALMM list for modules is effective since April 2024, with cell manufacturer approvals deferred to July 2026. The government is auditing plants, and Tata Power expects no further extensions.

Question 3:
Mohit Kumar (ICICI Securities): "What is revenue reversal in EPC business during the quarter?"
Answer:
The EPC revenue reduction (~INR 300 crores) reflects post-merger accounting adjustments (merging Tata Power Solar EPC entity). Profitability remains intact, with YTD margins at 5"“7%, aligning with guidance.

Question 4:
Sumit Kishore (Axis Capital): "The elimination within renewables for revenue at about INR 1,806 crores appears higher than TP Solar's revenue. How should we interpret these eliminations?"
Answer:
Eliminations stem from internal module/cell sales to Tata Power Renewable Energy (TPREL) and inter-segment EPC profits. Third-party sales (e.g., ALMM-compliant modules) will grow as production scales.

Question 5:
Sumit Kishore (Axis Capital): "Why does Mundra's coal/shipping EBITDA rise in Q3, while other segments decline?"
Answer:
Mundra's one-off gain (INR 332 crores) offset declines elsewhere. Previous year's dividend income (INR 311 crores) caused comparable volatility. Disclosures will be enhanced for clarity.

Question 6:
Apoorva Bahadur (IIFL): "How should we model solar cell/module profitability for internal vs. external sales?"
Answer:
External sales will reflect in manufacturing EBITDA, while internal sales are eliminated. Detailed accounting guidance will be shared next quarter as production stabilizes.

Question 7:
Apoorva Bahadur (IIFL): "Has the cell plant stabilized? What was Q3 output?"
Answer:
The first 2 GW cell line (commissioned Nov 2024) is 90% operational; the second 2 GW line (Jan 2025) stabilizes by February. Full utilization is expected in FY26.

Question 8:
Puneet (HSBC): "What's the renewable capacity addition plan for FY26/27?"
Answer:
Annual targets are 2"“2.5 GW (solar/wind mix). Delays in FY25 stemmed from extended monsoons, but 600 MW is slated for Q4 execution.

Question 9:
Satyadeep Jain (Ambit Capital): "Why is renewables' EBITDA growth solely driven by cell/module lines?"
Answer:
Lower solar PLFs in Q3 (due to weak radiation) impacted generation EBITDA. YTD performance (9 months) remains strong, with cell/module integration boosting margins.

Question 10:
Satyadeep Jain (Ambit Capital): "How will nuclear project economics work for private players?"
Answer:
Early-stage discussions; economics depend on technology partnerships, fuel costs, and policy. Previous NPCIL models (government-led) may shift post-FM's private-sector push.

Question 11:
Swati Jhunjhunwala (JM Financial): "What is the revenue/IRR for PM Surya Ghar rooftop projects?"
Answer:
Rooftop systems cost ~INR 60,000"“65,000/kW. Margins align with disclosed rooftop EBITDA (16% in Q3). Tata Power targets 10 lakh installations/year under the scheme, leveraging state MoUs.