Summary
The Tata Power Company Limited - Q3 FY26 Earnings Call Summary Wednesday, February 4, 2026 5:30 PM
Event Participants
Executives 5 Anshul Verdia, Dr. Praveer Sinha, J.V. Patil, Kasturi Soundararajan, Sanjeev Churiwala
Analysts 8 Aniket Mittal, Anuj Upadhyay, Apporva Bahadur, Girish Achhipalia, Ketan Jain, Mohit Kumar, Nikhil Bhandari, Satyadeep Jain, Sumit Kishore
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| EBITDA | ₹3,913 crores | +12% YoY; Growth driven by solar manufacturing, rooftop solar, and Odisha Discoms. |
| PAT | ₹1,194 crores | Marginal YoY increase; Impacted by ₹800 crores YTD losses at Mundra due to 6-month shutdown. |
| Solar Manufacturing PAT | ₹251 crores | +124% YoY; Driven by ramp-up in cell and module production with 28% EBITDA margins. |
| Solar Rooftop PAT | ₹111 crores | +85% YoY; Executed 372 MW in Q3 vs 173 MW YoY; crossed 1 GW in 9M FY26. |
| Odisha Discoms PAT | ₹226 crores | +163% YoY; Significant improvement in billing/collection efficiency and loss reduction. |
| Net Debt to EBITDA | 3.4x | Maintained conservative leverage despite aggressive CAPEX cycle. |
| Net Debt to Equity | 1.2x | Stable YoY; Management aims to maintain this level for future growth. |
| Renewable Capacity Added | 1.9 GW | 9M FY26 total; includes 600 MW own capacity and 1.3 GW third-party projects. |
Geographic & Segment Commentary
- Renewables: Executed 1.9 GW in 9M FY26 with a target of 2.7 GW by fiscal year-end. Shift in strategy toward 100% internal projects from FY27 onwards to support the 5.5 GW pipeline; management noted execution is being phased to align with transmission line readiness.
- Manufacturing: Delivered 962 MW of modules in Q3 with a 28% EBITDA margin. Transitioning to full DCR (Domestic Content Requirement) cell consumption from June to maximize margins under ALMM policy.
- Distribution: Delhi Discom (TPDDL) recorded a ₹460 crore EBITDA boost via a regulatory true-up order for FY23. Odisha Discoms generated ₹800 crore in cash flow during Q3, reflecting successful operational turnarounds and lower credit losses.
Company-Specific & Strategic Commentary
- Mundra Resolution: Supplemental PPA (SPPA) terms agreed with Gujarat except for one final point; management expects closure in 2-3 weeks before engaging other states to restart the plant for summer demand.
- Nuclear Energy: Actively discussing Small Modular Reactors (SMRs) with the Department of Atomic Energy and NITI Aayog; target to initiate projects within the next 24 months as policy clarity emerges.
- Pumped Storage (PSP) & Hydro: Bhivpuri PSP and Bhutan hydro projects are progressing on “ambitious timelines” to meet future peaking and round-the-clock power requirements.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Renewable Capacity Addition | 2.5 - 3.0 GW (FY27) | Shift to 100% internal projects; timing synchronized with ISTS transmission commissioning. |
| Annual CAPEX | ₹15,000 - ₹25,000 crores | To be funded through internal accruals and calibrated debt; focused on Renewables and Distribution. |
| Mundra Restart | Late Feb 2026 | Dependent on in-principle approval from non-Gujarat procurer states following Gujarat SPPA finalization. |
| Solar Rooftop Growth | 50-60% YoY increase | Driven by PM Surya Ghar scheme (target 1.5 crore houses) and expansion of utility-led schemes. |
Risks & Constraints
| Risk | Context |
|---|---|
| Transmission Delays | Management cited interstate transmission line lags as a primary reason for staggering renewable commissioning to avoid stranded assets. |
| Regulatory Dependencies | TPDDL and Odisha performance rely heavily on timely true-up orders and regulatory asset recovery; TPDDL regulatory assets increased due to new orders. |
| Input Cost Volatility | Increasing Chinese wafer/polysilicon prices may raise gross blocks; however, management expects to offset this through higher DCR module realizations. |
Q&A Highlights
Mundra Status
- Question: Can the plant run for Gujarat in the interim before other procurers agree? (Mohit Kumar)
- Answer: Gujarat is leading the SPPA terms. Once agreed, we will seek in-principle approval from other states to start scheduling power for the summer months. (Praveer Sinha)
Delhi Distribution One-offs
- Question: What was the specific impact of the regulatory true-up in Q3? (Sumit Kishore)
- Answer: The Delhi Discom had a ₹460 crore EBITDA benefit (₹344 crore PAT) from an FY23 true-up order, which helped offset Mundra’s losses. (Sanjeev Churiwala)
Renewable Execution Pace
- Question: Why has the own-capacity addition been slow relative to the industry? (Satyadeep Jain)
- Answer: Execution was prioritized for third-party orders (SJVN, NHPC) first. Future internal projects are being timed to match transmission line completion to ensure immediate evacuation. (Praveer Sinha)
Manufacturing Margins
- Question: Are the current 28% manufacturing margins sustainable? (Nikhil Bhandari)
- Answer: Efficiency will improve as we master the plant operations. Being integrated with our own cell production provides a durable cost advantage under ALMM. (Praveer Sinha)
Key Takeaway
Tata Power delivered a resilient Q3 FY26, leveraging its diversified portfolio to offset ₹800 crores in YTD losses from the non-operational Mundra plant. Significant growth in “new energy” segments was evident, with Solar Manufacturing PAT rising 124% YoY and Rooftop Solar PAT increasing 85% YoY. The company has executed 1.9 GW of renewables in 9M FY26 and targets a 2.5-3.0 GW annual run-rate for internal projects starting FY27. Strategic focus remains on completing the 5.5 GW renewable pipeline, resolving the Mundra SPPA, and scaling the Odisha distribution turnaround, which is now generating substantial cash flows. Despite an aggressive ₹15,000-25,000 crore annual CAPEX outlook, management maintains a conservative leverage profile (1.2x Net Debt/Equity). The company is well-positioned to capitalize on upcoming distribution PPP opportunities and the national rooftop solar push.
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