Detailed Narrative
Record Financial Performance in FY25
Tata Power achieved a historic financial year in FY25, with PAT exceeding ₹5,000 crores for the first time, reaching ₹5,197 crores before exceptional items📎, marking a 26% year-on-year increase. The underlying EBITDA also saw a 10% growth, totaling ₹15,261 crores, while reported revenue increased by 5% to ₹64,502 crores. This robust performance is attributed to strong contributions from existing generation, transmission, distribution, and renewable businesses, demonstrating consistent growth for the 22nd consecutive quarter.
Renewables and Solar Business Expansion
The renewables segment demonstrated significant growth, adding 1,026 MW of capacity in FY25, including 166 MW commissioned in Q4. The company boasts a strong pipeline of 5.5 GW for future additions over the next 6 to 24 months. The solar rooftop business was a standout performer in Q4, with revenues up 40% to ₹865 crores and EBITDA up 72% to ₹132 crores. For the full year, solar rooftop sales reached 782 MWp, generating ₹2,210 crores in revenue and ₹209 crores in PAT, with expectations to nearly double in FY26 driven by government initiatives like PM Surya Ghar.
Solar Manufacturing and T&D Business Strength
The solar cell and module manufacturing plant at Tirunelveli is fully operational, achieving over 90% utilization. In Q4, it supplied 913 MW of modules and 650 MW of cells, contributing ₹1,500 crores in revenue with a 27% EBITDA margin. For FY25, the manufacturing unit reported ₹5,337 crores in revenue, ₹875 crores in EBITDA, and ₹422 crores in PAT, with plans to cross 3,700 MW in production in FY26. The T&D business also performed exceptionally well, with FY25 revenue of ₹39,122 crores and PAT of ₹2,000 crores, notably driven by Odisha Discoms' PAT increasing to ₹439 crores from ₹307 crores in the prior year.
CAPEX and Debt Profile
Total CAPEX for FY25 was ₹16,200 crores, with ₹4,100 crores spent in Q4. The company has an ambitious CAPEX plan of ₹25,000 crores for FY26, with approximately 60% allocated to renewable businesses and 30% to transmission and distribution. Despite the substantial CAPEX, the company maintained a strong balance sheet, with net debt at ₹44,700 crores. The net debt to underlying EBITDA improved to 2.93 (below the target of 3), and net debt to equity stood at 1.0, reflecting prudent financial management and strong credit ratings.
Strategic Projects and Future Outlook
Tata Power is advancing its pumped hydro projects, with work started on the 1,000 MW Bhivpuri project and the 1,800 MW Shirawata project expected to commence later in the year. The 600 MW Khorlochhu project in Bhutan also began in January 2025, targeting completion by November 2029. The company aims for nearly 70% clean and green energy by 2030 and expects peak power demand to reach 270 gigawatts this year. While there were some delays in Q4 CAPEX and capacity additions due to land and transmission issues, management is confident in making up for these in the coming quarters⏳.