Detailed Narrative
Strong Operational and Financial Performance in FY26
SJVN demonstrated robust operational performance in FY26, with total power generation increasing by approximately 25% YoY to 13,302 million units. This growth was supported by flagship projects like Nathpa Jhakri Hydro Power Station, which generated 7,506 million units, and Rampur Hydro Power Station, which generated 2,108 million units. Financially, the company reported a 22% YoY increase in revenue from operations to INR 3,545 crores for FY26, primarily due to the recognition of INR 679 crores from tariff true-up for prior periods. PAT for FY26 grew 4% YoY to INR 1,008 crores, with a significant 303% YoY surge in Q4 FY26 PAT to INR 125 crores.
Significant Capacity Additions and Project Progress
In FY26, SJVN added 1,730 MW to its operating assets, comprising 1,070 MW of solar and 660 MW of thermal capacity, bringing the total installed capacity to 4,196 MW. Key additions include the 660 MW first unit of the Buxar Thermal Power Plant and a 1,000 MW Bikaner solar project. The second unit of Buxar (660 MW) is expected to achieve commercial operation by the end of May 2026. Progress is also noted for the 69.5 MW Dhaulasidh Hydro Project, targeted for commissioning by March 2027, and the Arun-III hydro project in Nepal, now expected by December 2028 despite earlier geological and governmental challenges.
Renewable Energy Portfolio Expansion and PPA Challenges
SJVN continues to expand its renewable energy footprint, having awarded 16 GW of renewable energy projects across various segments. The company has signed Power Sale Agreements (PSAs) for approximately 6 GW of this awarded capacity. However, challenges persist in converting the remaining 9 GW into signed PPAs, largely due to varying demand configurations from DISCOMs and evolving tariff structures. Management expressed hope for converting these pending PPAs, noting that some tariffs are attractive compared to current market rates.
Initial Profitability Challenges in New Projects
Newly commissioned projects, particularly in the solar (SGEL) and thermal (STPL - Buxar) segments, faced initial profitability challenges. SGEL reported a loss of INR 258 crores in FY26, while Buxar Thermal Power Plant incurred a loss of INR 93 crores in its first three months of operation. These losses are attributed to lower Plant Load Factors (PLF), with Buxar operating at 60% against a required 70% for profitability, and higher finance and depreciation costs. Management anticipates Buxar to become profitable in FY27 as Unit 2 commissions and Unit 1 stabilizes.
Capital Expenditure Plans and Long-Term Target Review
SJVN has outlined substantial capital expenditure plans for the coming years, with INR 9,400 crores projected for FY27, INR 7,800 crores for FY28, and INR 7,500 crores for FY29. The company's ambitious long-term capacity targets of 25 GW by 2030 and 50 GW by 2040 are currently under review. This reassessment is prompted by past project delays, lower-than-expected CUF in some commissioned projects, and challenges in the broader tendering environment, indicating a potential recalibration of future growth projections.