TATAPOWER — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Moderator · Conference Operator

Ladies and Gentlemen, Good Day, and Welcome to the Tata Power Q2 & H1 FY26

We will take our next question from the line of Puneet from HSBC.

Please go ahead.

Puneet

Yes, thank you so much and congrats on good performance.

My first question is actually on your investments in Bhutan.

How much investment do you intend to commit in Bhutan?

I see there are at least three more projects on the hydro side that are listed in your presentation.

How much investment should one look at between the first two and then the next two?

Dr. Praveer Sinha

So, the first project was about Rs.6,800 crores.

This is about Rs.13,000 crores and these projects require a lot of detailed analysis.

Engineering has to be finalized, access arrangements have to be made to the site, and also we need to carry out many other studies relating to the type of water flow is there, environment issues, forest issues.

So, these projects require lot of time in development.

So, first project, already construction work is started.

The second one of 1,125, we expect the construction work to start by mid of next year.

Already initial work, pre-project activities are already going on at this point of time.

Moderator · Conference Operator

We will take our next question from the line of Sumit Kishore from Axis Capital.

Please go ahead.

Sumit Kishore

Good evening and thanks for the opportunity.

My first question is in relation to your ingot wafer 10-gigawatt plant.

So, what is the ballpark investment timeframe?

Moderator · Conference Operator

I am sorry, you are sounding muffled.

Sumit, can you just repeat the question, please?

Sumit Kishore

I was asking about a 10-gigawatt ingot wafer.

What are the CAPEX that you will be looking for setting this up and over what timeframe do you expect to start commissioning this capacity and when does it reach peak capacity?

That is my question.

Dr. Praveer Sinha

We are examining the proposal.

As I mentioned to you, we are in discussion with various state governments to understand what sort of subsidy and support they will provide and also from Government of India, the PLI scheme.

So, that will give us an idea based on that what sort of eventual cost of the project will be there.

So, I think we need to wait for some more time.

In principle, we have decided that we will go ahead but we need to firm up some of these numbers in the next two months.

Sumit Kishore

Sure.

So, in the first half of the year, how much CAPEX has Tata Power incurred?

Dr. Praveer Sinha

We have incurred about Rs.7,300 crores and our plan is Rs.25,000 crores.

We are on track.

You will see huge amount of those investments happening in Quarter 3 and Quarter 4.

The Tata Power Company Limited November 11, 2025

Sumit Kishore

Okay.

And on the cell and module plant numbers that you have shown, the EBITDA margin seems to be better this time around, around 26% or so, is this sustainable and what was the mix of module cell sale to third-party and in-house use this time around?

Dr. Praveer Sinha

So, typically, the prices of modules and cells are governed by two things -- one is demand/supply and the other is what is the input cost where we import the wafers and what price we get wafers and some of the other input materials.

So, it will vary to certain extent, but what is important is that the plant operation has stabilized and many of the efficiencies in plant operation, those get reflected in the cost of production and those benefits will be there to come.

Sumit Kishore

Sure.

Just one final clarification or a question on what is the status of the bidding for the UP discom privatization and what are the expected timelines here?

Dr. Praveer Sinha

So, we are also waiting for the bidding process to happen.

Every time they have told us that it will happen very quickly.

So, let us hope it happens in the next few weeks.

Sumit Kishore

Okay.

Thank you and wish you all the best.

Moderator · Conference Operator

Next question is from the line of Atul Tiwari from JP Morgan.

Please go ahead.

Atul Tiwari

Yes, sir.

Thanks a lot.

Sir, in first half, your consol net debt has gone up by almost Rs.10,000 crores versus the CAPEX of Rs.7,300 crores.

So, two questions here.

Is there some other cash usage in addition to the CAPEX that you have done in the first half?

And the second thing is that obviously you are now embarking on very large CAPEX programs.

So, what kind of debt-equity maximum or debt-to-EBITDA you will be comfortable with going ahead?

Moderator · Conference Operator

We will take our next question from the line of Apoorva Bahadur from IIFL Capital.

Please go ahead.

Apoorva Bahadur

Hi, sir.

Thank you for the opportunity.

So, we are seeing a lot of state government bids for thermal power projects.

I would be interesting to know your thoughts if there is any intention of adding Greenfield or Brownfield thermal capacity over here.

The Tata Power Company Limited November 11, 2025

Dr. Praveer Sinha

We are examining all these opportunities, and we will take a call depending upon what sort of land we have, what sort of tariff one would be in a position to bid.

So, it is something that we keep on continuously evaluating.

Apoorva Bahadur

Understood, sir.

Also, any update on the Delhi regulatory asset liquidation?

There was a Supreme Court order.

Dr. Praveer Sinha

So, already, the regulatory assets in Delhi has been going down for the last two years.

And this year also nearly, I think, Rs.600 crores of regulatory assets have got reduced.

Last year also, there was a huge reduction.

And now that the Supreme Court has asked the DERC to amortize it within the seven-year period from the time they have been accrued.

I think that will get completed.

So, we do expect that there will be a good trajectory of regulatory asset reduction over a period of time.

Also, some of the regulatory assets we have in Mumbai and all, everything will get liquidated.

Apoorva Bahadur

Understood, sir.

Sir, lastly, on parallel distribution licenses, we understand Tata Power had applied in a couple of circles, if you can provide some color on that?

Dr. Praveer Sinha

That electricity act amendment proposal has come and they had asked for comments.

We have given our comments.

I do expect that this will go to the parliament and of course, it has to go through the process of select committee to examine it and all.

Hopefully, in the budget session, I expect that this may get passed.

Apoorva Bahadur

Sure, sir.

Thank you so much.

Moderator · Conference Operator

We will take our next question from the line of Bharanidhar Vijayakumar from Avendus Spark.

Please go ahead.

Bharanidhar Vijayakumar

Good evening.

So, my first question is on the media news on a discom bailout package by government to the tune of around Rs.1 trillion.

My first question is whether this is finalized and what is the likely timeline when this will be implemented, and if so, how will Tata Power be benefiting because of this?

Dr. Praveer Sinha

So, we have also read in the newspaper that the government has such a plan.

From whatever I know, it is still not finalized.

Government has to take a decision on this.

But considering The Tata Power Company Limited November 11, 2025 that there is so much of debt as also losses of discoms, it will be necessary for some action to be taken.

The nature of the action of course will depend on what the government decides.

We do expect that we will open up more opportunities for Tata Power in doing the PPP of distribution as we have done in Odisha and Delhi and also the parallel license opportunity.

So, I think Tata Power will play a very, very active role in power distribution in the coming years.

Bharanidhar Vijayakumar

Okay.

My second question is on our renewable addition targets.

We had some time back given a 2.6 gigawatt of addition target for ‘26 and about 2.3 for ‘27.

Where are we to achieve that target?

If not, could you highlight some of the reasons why there are challenges or delays -- is it because of PPAs not being in place or connectivity or transmission infrastructure not being placed or any other challenges?

Dr. Praveer Sinha

So, our capacity addition in H1 has been 205 megawatts.

We expect that in Q3 and Q4, we will do about 1.3 gigawatt.

This is based on the availability of transmission line and the land and all that.

Whatever will get missed out in this financial year, we will try to complete it within the next financial year.

So, hopefully by end of financial year ‘27, you will see that our overall target that we have set, we will be able to achieve.

Bharanidhar Vijayakumar

So, what I am hearing is 2.6-gigawatt target in ‘26, now, we will mostly read as 1.3 gigawatt plus 2 gigawatt already comes in around 1.5 gigawatt.

Dr. Praveer Sinha

Agree.

Bharanidhar Vijayakumar

Okay.

My final question is on say Mundra plant.

Two parts, one, on supplementary PPA you alluded to decision by Gujarat government getting finalized, but can you give broad contours of what we can expect given one bone of contention on this supplementary PPA was how much of the profit that the mining segment is doing will be knocked off from the proposed tariff, so, any contours you can give on what could be the primary tariff?

And also what is our thoughts on when Sec. 11 if at all can be brought back by the government, is it likely that next year when demand increases it will be back?

Dr. Praveer Sinha

So, Sec. 11 is an emergency section whenever there is a shortage of power, the government has a right to call upon plants which are not operating to operate at full capacity.

This year because of the monsoon coming early and a longish monsoon it was not imposed during The Tata Power Company Limited November 11, 2025 summer months.

Hopefully, it will be imposed next year.

But in any case, we want to have a long-term resolution rather than going year-after-year on Sec. 11.

So, we have been in discussion with the government of Gujarat and hopefully we should be able to come to some arrangement.

The details are still getting finalized and it has to go to the government approval process, and once it is finalized we will be in a position to share.

Bharanidhar Vijayakumar

Thank you, sir.

All the best.

Moderator · Conference Operator

We will take our next question from the line of Satyadeep Jain from Ambit Capital.

Please go ahead.

Satyadeep Jain

Hi, thank you.

I just want to firstly ask on the decision or thought process to go long on ingot wafer versus cell.

So, you are looking at 10-gigawatt ingot wafer versus cell line, what is the thought process there and does it mean that incrementally we should look at Tata Power as getting bigger on the third-party sales of cell module wafer, which currently most of the capacity is tied to internal, but it looks like increasingly that is the path we are going to choose?

Dr. Praveer Sinha

So, based on the demand/supply and the plants which are under implementation, we feel that there will be enough supply of cell and module.

That is why we are doing the backward integration going for the wafer and ingot and we feel that the 10-gigawatt capacity will be good capacity to not only supply wafers for our plants, but also for other cell and module plants.

This is under finalization and hopefully in the next two months we will be in a position to finalize and share the details.

Satyadeep Jain

Are you suggesting that the barriers to entry for wafer and ingot would be higher, so, incrementally not many players will be able to add ingot wafer, is that what you are trying to say?

Dr. Praveer Sinha

Yes, it has not only the technology, which is very sophisticated, but also in terms of the ability of many people to execute such a complex project.

Today, we have virtually very small capacity, just 2 gigawatts in the country, and the country will require about 50 to 60 gigawatts of wafer and ingot manufacturing capability in the next two, three years.

So, we feel we are very well poised for this sort of investment opportunity.

The Tata Power Company Limited November 11, 2025

Satyadeep Jain

Yes, fair enough sir.

Sir, secondly, I wanted to ask on one of the questions around thermal.

I just want to allude to the recent podcast and case study that you had with the HBR.

It seemed like you may look at the focus would be on renewable, but opportunistically you may look at some stress assets and you also have that 2045 net zero target.

Are you suggesting you are still open to looking at some Greenfield assets also for thermal?

Because initially the impression was that maybe Brownfield, maybe more of stress assets that anyway will retire by 2045 given the target?

Moderator · Conference Operator

We will take our next question from the line of Anuj Upadhyay from Investec.

Please go ahead.

Anuj Upadhyay

Hi, sir.

Thanks for the opportunity.

Sir, first question is on the rooftop sustainability.

So, how big are we anticipating this market to be and are we directly tying up any of the states to supply the rooftop?

Likewise, we have few new entrants who directly enter into The Tata Power Company Limited November 11, 2025 agreement with certain states to install a rooftop of around say 700 megawatts plus kind of a capacity.

So, are we looking out for similar kind of an opportunity here?

Dr. Praveer Sinha

So, rooftop, I think it is just tip of the iceberg.

Only 20 lakh rooftops have been installed till September, and my expectation is that in this country at least 5 crores homes will have a rooftop and so there is a long way that we have to go to cater to the country’s requirements.

So, this is a very good opportunity.

We are one of the best in the country with maximum market share of more than 20% and this is going to be a very sustained effort from Tata Power side for many more years in future.

Anuj Upadhyay

Okay.

And next is on the Mundra, sir.

Sorry, I guess you have already mentioned that initial phase you would not be able to comment on the resolution as such, but as you mentioned that Gujarat would be the first state with whom we are negotiating as such, so, how long basically would it take for the entire 4 gigawatt capacity to get resolved?

Earlier we used to have close to around 2 gigawatt or 1.5 gigawatt with Gujarat.

So, is the only those capacity with which we are having a resolution or the quantum could be much higher than that?

Moderator · Conference Operator

We will take our next question from the line of Vishal Periwal from Antique.

Please go ahead.

Vishal Periwal

Yes, sir.

Thanks for the opportunity.

Sir, in your slide of the cluster-wise performance, the coal SPV, Mundra and shipping -

Moderator · Conference Operator

I am sorry to interrupt.

Can you use your handset mode, please, Vishal?

Vishal Periwal

Sir, in your slide, which has cluster-wise performance, the Mundra, coal, and then shipping, it has contributed negatively to our PAT of almost like Rs.360-odd crores.

The Mundra contribution could be how much?

This is just to understand on a quarterly basis, what kind of negative contribution may come in?

Moderator · Conference Operator

We take our next question from the line of Mahesh Patil from ICICI Securities.

Please go ahead.

Mahesh Patil

Yes.

Thank you, sir.

So, my first question is on the RE capacity addition.

So, for this year, you have mentioned around 1.3 gigawatt in H2, so around 1.5 gigawatt overall in FY26. So, what is the target for FY27?

Moderator · Conference Operator

We will take our next question from the line of Rajesh Basu Majumdar from 360 One B&K.

Please go ahead.

Rajesh Basu Majumdar

Yes, good evening, sir.

And thanks for the chance.

I just had a question on renewables.

What is the capacity addition we have seen in 1H and what is the outlook for 2H in terms of the total additions for the year?

Moderator · Conference Operator

We will take our next question from the line of Puneet from HSBC.

Please go ahead.

Puneet

Yes, thanks.

So, on your 1.3-gigawatt future capacity addition in the second half, is it possible to break down between how much solar and how much wind would that be?

Moderator · Conference Operator

Ladies and gentlemen, that was the last question.

I would now like to hand the conference over to Dr. Praveer Sinha for closing comments.

Over to you, sir.

Dr. Praveer Sinha

Thank you, everyone, for joining for this call.

And if you have any queries, you can always get in touch with my colleagues, Kasturi and Anshul, and we will be more than happy to provide you all the required information.

Thank you and take care.

The Tata Power Company Limited November 11, 2025 And Kasturi, you have informed everyone about that visit?

Kasturi Soundararajan

Yes, we have started informing them.

If you want, you can go ahead.

Dr. Praveer Sinha

Okay.

The next Analyst Meet is in Bhubaneswar on 15th of December.

My colleagues will get in touch with you and provide you more details and the agenda.

Moderator · Conference Operator

On behalf of Tata Power Limited, that concludes this conference.

Thank you for joining us.

You may now disconnect your lines.

Questions and answers

Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

We will take a first question from the line of Mohit Kumar from ICICI Securities.

Please go ahead.

Mohit Kumar

Good evening, sir, and thanks for the opportunity.

My first question is on the solar manufacturing.

I think I alluded to that you are going to set up 10-gigawatts of ingot and wafer.

My question is that are you looking to set up this 10-gigawatt cumulative capacity of ingot, wafer, cell and module, everything?

And are you expecting another PLI, because you mentioned the PLI?

Dr. Praveer Sinha

So, it will be 10-gigawatt of wafer and ingot.

We already have the 4.3 gigawatt of cell and module and another 250 in Bangalore.

So, we already have 4.55 gigawatts of cell and module.

But the new investment will be only in wafers and ingot.

Mohit Kumar

Only wafer and ingot of 10-gigawatt, right, sir?

Dr. Praveer Sinha

Absolutely right.

Mohit Kumar

Understood, sir.

Are you expecting any PLI for wafer and ingot separately?