Tata Power reported strong financial results in its Q2 & H1 FY’26 earnings call. PAT grew by 14% year-over-year, marking the 24th consecutive quarter of growth. Odisha Discoms and the solar cell/module manufacturing plant showed excellent performance. The company plans significant investments in renewable projects and the Dorjilung hydropower project. Despite challenges like monsoon impact and Mundra plant issues, Tata Power remains on track for future growth.
Financial Performance Overview
Tata Power’s Q2 and H1 FY’26 earnings call highlighted significant achievements, with PAT growing by 14% compared to last year. This marks the 24th consecutive quarter of PAT growth for the company. The company reported an EBITDA exceeding ₹4,000 crores for the first time.
Key Highlights from the Quarter
Several factors contributed to the company’s robust performance:
- Odisha Discoms: Achieved a PAT of ₹174 crores, a 362% increase year-over-year, with half-yearly PAT at ₹279 crores.
- Solar Cell and Module Manufacturing Plant: Showed strong performance with a PAT of ₹240 crores, a 262% increase from the previous year and H1 PAT is ₹340 crores.
- Rooftop PAT: Grew to ₹123 crores, a 390% increase over the previous year, with H1 at ₹213 crores. Rooftop sales crossed ₹1,000 crores in the quarter for the first time.
Strategic Investments and Projects
Tata Power is focusing on expanding its renewable energy capacity. It plans to add approximately 700 MW of capacity in Q3 and 600 MW in Q4. This will bring the total operating renewable assets to nearly 7 gigawatts by the end of the year. The board has approved investments in the 1,125 MW Dorjilung project, following a similar structure as the Khorlochhu project.
Mundra Plant and Other Factors
The last quarter was challenging due to a prolonged monsoon. Also, the Mundra plant operations were impacted due to Section 11 regulations. The company is in discussions with the Gujarat government to resolve this issue, with expectations of a resolution within the month.
Balance Sheet and Ratings
Despite capital expenditure, the balance sheet remains strong. Investments this year totaled nearly ₹7,349 crores, with plans to spend ₹25,000 crores in the financial year. Debt increased by ₹6,400 crores, reaching ₹54,000 crores. The company maintains a strong credit rating, with S&P Global upgrading the outlook to BBB Stable.
Future Outlook
Tata Power expects future performance to improve with the resolution of the Mundra issue and increased renewable capacity. The company is also evaluating a 10-gigawatt plant for manufacturing ingots and wafers and expects to finalize state subsidies and government PLI in the coming months.
Source: BSE