Renewables biz may recharge Tata Power’s growth

livemint.com:

Tata Power Co. Ltd’s stock plunged 8% on Monday after the company reported sombre earnings for the December quarter (Q3FY24). Still, the power producer’s outlook is upbeat owing to an expected scale-up in its renewables business.

In Q3, the renewables segment’s revenue surged 30% year-on-year to nearly ₹2,484 crore, forming 15.5% of total gross segment revenue. Tata Power plans to shift towards clean energy. As on 31 December, the company’s operational capacity was 4,270 MW in the renewables segment.

Tata Power Renewable Energy is currently executing projects totaling 4,752 MW, and Tata Power Solar Systems has 4,120 MW of projects under execution. The combined clean energy capacity will be over 10,000 MW in 12-24 months. The company estimates renewables to contribute 45% of Ebitda by FY27, up from 32% in FY23.

Tata Power expects to spend 45% of its ₹60,000 crore-capex on renewables between FY24 and FY27. The company’s strategy to tap high-margin group-captive renewable energy opportunities, venture into brownfield pumped hydro storage, expand its transmission business beyond distribution, and reach a resolution in the Mundra issue have positioned Tata Power for accelerated growth, said Sudhanshu Bansal, an analyst at JM Financial Institutional Securities. As of December, Tata Power Solar had a large engineering, procurement and construction order book for utility-scale solar projects, with orders worth ₹15,885 crore for 3,612 MW of capacity.