Tata Power, one of India’s oldest and prominent energy companies, has evolved significantly in recent years. Below is an analysis of the company’s operational and financial performance along with recent developments.
Operational and Segment Performance
Tata Power has overall installed capacity of 14.2 GW as of FY24. Renewables account for 38% of this, equivalent to 5.4 GW. The company operates one of the largest solar EPC businesses, achieving a 25% year-over-year growth in rooftop solar installations.
Tata Power’s Tirunelveli solar module manufacturing plant, with a capacity of 4.3 GW, has been instrumental in expanding its market share in solar EPC and module sales. Third-party EPC orders grew by 35% in FY24, generating Rs 30 billion in revenue, compared to Rs 22 billion in FY23.
The company’s thermal power plants contribute 62% of the total installed capacity. Tata Power’s flagship 4 GW Mundra Ultra Mega Power Plant (UMPP) saw improved plant load factors (PLF) in FY24, averaging 71%, up from 65% in FY23. However, rising coal prices and fuel supply constraints have marginally increased operational costs.
Tata Power Distribution (TPDDL) continues supplying electricity to over 12 million customers in Delhi and Odisha. The average aggregate technical and commercial (AT&C) losses for these regions have dropped to 8.9%, an improvement from 10.2% in FY23.
The company’s EV charging business comprises 20,000 public charging points operational by December 2024, a 60% year-over-year growth. Revenue from the EV infrastructure segment reached Rs 1.2 billion in H1 FY25.
Recent Developments
In November 2024, Tata Power entered into a joint venture with Druk Green Power Corporation Ltd. (DGPC) to develop over 5,000 MW of renewable energy capacity in Bhutan. This partnership is the largest clean energy initiative between India and Bhutan and includes projects such as the 1,125 MW Dorjilung Hydroelectric Project and 740 MW Gongri Reservoir. Additionally, Tata Power secured a 40% equity stake in Khorlochhu Hydro Power Limited for the development of a 600 MW hydropower project in Bhutan, valued at Rs 69 billion.
In the same month, Tata Power also commissioned a 126 MW floating solar project in Khandwa, Madhya Pradesh, which will supply power to the Madhya Pradesh Power Transmission Company Limited (MPPTCL).
Additionally, Tata Power has committed Rs 5.5 billion toward establishing solar and wind power capacities to supply clean energy to the Noida International Airport in Uttar Pradesh. The company will provide 10.8 MW of wind energy and develop a 13 MW onsite solar facility.
In line with its renewable energy push, Tata Power invested Rs 43 billion in a solar cell and module plant in Tirunelveli, Tamil Nadu, with a production capacity of 4.3 GW each for solar cells and modules.
In December 2024, Tata Power Renewable Energy Limited (TPREL) partnered with Tivolt Electric Vehicles Private Limited, a subsidiary of TI Clean Mobility, to build an electric vehicle charging ecosystem. Under the agreement, TPREL will establish charging stations at Tivolt dealerships, customer locations, and high-traffic public spaces across the country.
Additionally, Tata Power announced an investment of Rs 1.2 trillion in Rajasthan to develop various renewable energy projects, including rooftop solar installations and EV charging infrastructure.
In December 2024, the firm commissioned a 431 MW DC solar project in Neemuch, Madhya Pradesh.
The firm signed a Memorandum of Understanding (MoU) with the Asian Development Bank (ADB) during COP29 in Baku, Azerbaijan, to explore financing for projects to enhance India’s power infrastructure and advance renewable energy. The partnership includes a 966 MW solar-wind hybrid system, pumped hydro storage, and energy transition initiatives, with an estimated cost of $4.25 billion.
Financial Performance
Tata Power’s total revenue for FY24 was Rs 550 billion, a 12% increase from Rs 490 billion in FY23. Renewable energy revenue contributed Rs 90 billion, marking a 20% year-over-year growth. EBITDA margins improved to 25.8% in FY24, driven by higher solar EPC volumes and improved operational efficiencies across segments.
Net profit for FY24 stood at Rs 31 billion, a 15% growth compared to Rs 27 billion in FY23. This growth was supported by improved performance in renewables and distribution, offsetting higher coal procurement costs for its thermal business.
As of September 2024, Tata Power’s net debt stood at Rs 440 billion, reflecting a debt-to-equity ratio of 1.4x. The company allocated Rs 70 billion for capital expenditure in FY24, with 60% directed toward renewable projects and EV infrastructure.
Key Metrics for FY24
- Installed Capacity: 14.2 GW (5.4 GW from renewables, 38% share)
- Renewable Energy Revenue: Rs 90 billion (20% YoY growth)
- EBITDA Margin: 25.8% (up from 24% in FY23)
- Net Profit: Rs 31 billion (15% YoY growth)
- EV Charging Network: 20,000 points (60% YoY growth)
Future Outlook
Tata Power has earmarked Rs 210 billion for FY24 capex, rising to Rs 260 billion in FY25. Approximately 60% of the capex will be directed toward renewable energy projects.
Tata Power also plans a major expansion, with a targeted investment of Rs 1.46 trillion to double its operational capacity to 32 GW by 2030. The company plans to increase its transmission line capacity to 10,500 ckm, up from 4,633 ckm, and grow its customer base to 40 million from the current 12.5 million.
By 2030, the company targets Rs 1 trillion in revenue and Rs 0.1 trillion in profit after tax.
With planned expansions in solar manufacturing, EV infrastructure, and clean energy projects, Tata Power is well-positioned to sustain growth and deliver value.
Photo credit: Tata Power