Tata Power Strong Q4 FY25 and Full Year FY25 performance

Tata Power’s Q4 FY25 and Full Year FY25 performance based on the earnings call and financial results:

🧾 Key Financial Highlights

📈 Quarterly (Q4 FY25):

• Reported PAT: ₹1,306 crore (+25% YoY)

• Adjusted PAT: ₹1,288 crore (+16% YoY)

• EBITDA: ₹3,829 crore (+14% YoY)

📊 Full Year FY25:

• PAT (Pre-Exceptionals): ₹5,197 crore (+26% YoY)

• Reported Revenue: ₹64,502 crore (+5% YoY)

• Underlying EBITDA: ₹15,261 crore (+10% YoY)

• Milestone: Crossed ₹5,000 crore PAT for the first time

🔮 Strategic Outlook:

• Aims to double PAT and EBITDA by FY2030

• Focused growth across core utilities and renewable energy

⚡ Segment-Wise Performance

🟩 Renewables:

• FY25 capacity addition: 1,026 MW (first time >1 GW/year)

• Q4 commissioning: 166 MW

• Pipeline: ~5.5 GW (execution in 6–24 months)

• 2030 target: 70% clean and green energy

• Pumped Hydro Projects:

  • Bhivpuri (1,000 MW) – work started

  • Shirawata (1,800 MW) – work to begin later in FY26

  • Khorlochhu, Bhutan (600 MW) – started Jan 1

☀️ Solar Rooftop Business:

• Q4 Revenue: ₹865 crore (+40% YoY) Tata Power reported a robust performance in Q4 FY25 and the full-year FY25 results. The company showcased strong financial growth, with Q4 revenue reaching ₹865 crore, marking a significant 40% increase year-over-year. The positive momentum demonstrated in the fourth quarter indicates Tata Power’s resilience and steady progress in achieving its financial objectives.

• Q4 EBITDA: ₹132 crore (+72% YoY)

• FY25 Revenue: ₹2,210 crore

• PAT: ₹209 crore

• FY26 Outlook: Expected to double — strong push via PM Surya Ghar Yojana

• Leadership: #1 in rooftop solar; presence in 700+ cities

🏭 Solar Manufacturing (TP Solar):

• Fully ramped plant at Tirunelveli

• FY25:

  • Modules supplied: 3,300 MW

  • Revenue: ₹5,337 crore

  • EBITDA: ₹875 crore (margin ~16%)

  • PAT: ₹422 crore

• Q4 Production:

  • Modules: 913 MW

  • Cells: 650 MW

  • Revenue: ₹1,500 crore

  • EBITDA margin: 27%

• FY26 guidance: 3,700+ MW capacity production

• Utilization: >90% with order backlog ~1 GW (third-party EPC)

🏗️ EPC Business (excluding rooftop):

• FY25 Margin: 5% (vs 3.3% in FY24)

• Q4 Margin: <3%

• Order Book: ₹11,000 crore (₹4,000 crore external)

• Rooftop Order Book: ~₹1,000 crore

🔌 Transmission & Distribution (T&D):

🏙️ Quarter (Q4 FY25):

• Revenue: ₹9,590 crore

• PAT: ₹616 crore

📅 Full Year (FY25):

• Revenue: ₹39,122 crore

• PAT: ₹2,000 crore

📍 Odisha Discoms:

• PAT: ₹439 crore (up from ₹307 crore YoY; +3x growth)

• Driven by:

  • AT&C loss reduction

  • Better billing & collection

  • Write-back of Expected Credit Loss (ECL) provisions

• Future outlook remains robust due to operational improvements

🌐 Expansion:

• Looking to bid in more distribution franchises, especially in Uttar Pradesh

• Sees itself as the largest private player in power distribution

💰 Capex & Balance Sheet (highlights to be shared further):

• Ongoing investments in renewables, solar manufacturing, and pumped hydro

• Financial closure for hydro projects underway

• Focus remains on maintaining healthy balance sheet while investing for long-term growth

🧠 Takeaways & Investment Rationale:

✅ Consistent Profit Growth: 22 straight quarters of YoY PAT growth
✅ Strong Renewable Pipeline: Ready to scale — 5.5 GW pipeline, solar and hydro integrated
✅ Profit Engine in Solar Manufacturing: High-margin business, already running near full capacity
✅ Resilient Core (T&D): High-quality earnings from urban + rural power distribution
✅ Solar Rooftop Leadership: Capitalizing on government support (PM Surya Ghar, net metering)

Strong Capacity Addition & Pipeline

• FY25 milestone: First-ever 1+ GW renewable capacity addition in a year (1,026 MW).

• Q4 FY25: 166 MW commissioned.

• Pipeline strength: ~5.5 GW to be added in the next 6–24 months.

• Insight: This consistent scale-up reflects Tata Power’s maturity and execution strength in the RE (Renewable Energy) space. Pre-secured land and connectivity highlight operational preparedness.

📈  Ambitious 2030 Clean Energy Goal

• Target: 70% of total energy from clean and green sources.

• Strategy: Focus on solar, wind, and especially pumped hydro for 24/7 renewable solutions.

🚧  Pumped Hydro Projects – Long-Term Green Base Load

• Projects:

  • Bhivpuri – 1,000 MW (work commenced)

  • Shirawata – 1,800 MW (to begin this year)

  • Khorlochhu (Bhutan) – 600 MW (completion by Nov 2029)

• Insight: These are crucial to delivering baseload + dispatchable clean energy, especially as India’s grid needs firm capacity to complement solar/wind intermittency.

🏠  Rooftop Solar – Market Leader & High-Growth Segment

• FY25 Revenue: ₹2,210 Cr; PAT ₹209 Cr

• Q4 YoY Growth:

  • Revenue: +40%

  • EBITDA: +72%

• FY26 Outlook: Business expected to nearly double, boosted by:

  • PM Surya Ghar Yojana (massive subsidy-driven household solar program)

  • Presence in 700+ cities with 600+ partners

• Insight: Rooftop solar remains a high-margin, high-visibility segment where Tata Power enjoys strong brand recall and market leadership.

🏭  Solar Manufacturing (TP Solar) – Strong Utilization & Profitability

• Capacity: 4 GW Mono-PERC; 300 MW TOPCon

• FY25 Metrics:

  • Revenue: ₹5,337 Cr

  • EBITDA: ₹875 Cr (27% margin)

  • PAT: ₹422 Cr

• FY26 Forecast: >3,700 MW production (near full capacity)

• Insight: High in-house consumption insulates TP Solar from demand volatility. As India moves towards import substitution, Tata Power’s vertical integration gives it an edge.

🧰  Solar EPC (ex-Rooftop) – Gradual Margin Expansion

• Order Book: ₹11,000 Cr (₹4,000 Cr external)

• FY25 Margin: ~5% (up from 3.3%)

• Rooftop EPC order book: ₹1,000 Cr

• Insight: Margin improvement suggests better pricing discipline and execution. Further gains expected as supply chain stabilizes and scale improves.

🌬️  Wind Energy

• Availability: 99%+

• PLF: Disappointing FY25 due to weak wind patterns (normal is ~19.5%–20%)

• Insight: Wind is supplementary in Tata Power’s portfolio; hydro and solar are the major focus. Wind volatility remains a known risk.

⚡  Battery Energy Storage Systems (BESS) – Strategic Enabler

• Positioned as part of hybrid renewable solutions.

• BESS will be essential in combining solar/wind with pumped hydro to offer grid-stable clean energy.

• Insight: Tata Power is investing in “firm renewable” solutions ahead of many peers, aligning with evolving grid needs.

🛠️  Challenges & Mitigation

• Delays: In Q4 due to evacuation issues and RoW for transmission.

• Action Plan: Proactive land acquisition + early connectivity applications.

• FY26 Expectation: 2.5–2.7 GW to be commissioned.

• Insight: Management is focused on de-risking execution bottlenecks, a crucial factor in meeting targets.

Power Demand Growth: FY25 vs FY26

🔺 Peak Power Demand Projections

• Implication: This 20 GW rise in peak demand shows ongoing structural growth, likely driven by:

  • Industrial rebound

  • Data center and cooling demand

  • Electrification of transport and rural power access

🌦️ Weather Impact on Demand Timing

• Peak demand is weather-sensitive:

  • Last year: Occurred in May

  • Historically: Can happen in July or October

• FY26 Summer Outlook: Expected to extend till August, which could:

  • Prolong high power consumption period

  • Push sustained base load needs

⚙️ Sector Readiness

• Dr. Sinha asserts that India’s power infrastructure is ready to meet the increased demand.

• Tata Power plants will run at full capacity to ensure supply obligations are met.

Transmission and Distribution (T&D) segment—especially distribution—has emerged as a core growth engine for the company.

Performance Snapshot (FY25):

• This represents record performance in both revenue and profit.

• All distribution companies under Tata Power performed exceedingly well, driven by operational efficiency and technology adoption.

🔹 Key Driver: Odisha Discoms

• PAT surged by over 3x, rising from ₹307 Cr to ₹439 Cr YoY.

• Operational Improvements:

  • Sharp reduction in AT&C losses (Aggregate Technical & Commercial).

  • Better billing & collection efficiency.

  • Proactive Expected Credit Loss (ECL) management.

🔍 Strategic Significance:

• Odisha is a model for Tata Power’s ability to turn around and modernize underperforming DISCOMs.

• Improvements are structural, not cyclical—suggesting a sustainable PAT trajectory.

🔹 Other Distribution Areas Performing Well:

• Delhi, Mumbai, and Ajmer DISCOMs are also stable and profitable.

• The combination of urban and rural domain expertise gives Tata Power a unique edge.

🔹 Future Outlook:

1. Expansion Plans:

• Tata Power is targeting UP DISCOM privatization bids.

  • Consultants appointed.

  • Bid documents expected by end of this month (June 2025).

• This aligns with the company’s strategy to expand its distribution footprint across India.

2. CAPEX Plan for FY26:

• ₹25,000 Cr total planned CAPEX.

  • ~30% (₹7,500 Cr) earmarked for T&D (both expansion and system strengthening).

3. Operational Outlook:

• Odisha’s strong Q4 showing expected to continue.

• Transmission projects have faced minor delays (due to right of way issues), but are being addressed.

🔹 Strategic Positioning:

• Tata Power sees itself as the largest private distribution player in India.

• Its demonstrated ability to run both urban and rural DISCOMs profitably is a core competitive moat.

• The company is actively marketing its operational improvements—offering on-site visits to showcase the Odisha transformation.

🧠 Summary & Implications:

• Distribution is the stable, cash-generating backbone of Tata Power.

• The company is positioning this segment for scale expansion and margin improvement, especially in UP.

• Execution on UP bids, sustained AT&C reduction, and timely CAPEX in T&D will be key to monitoring future performance.

• Investors should watch for new order wins, regulatory updates in UP, and quarterly trend continuation in Odisha and other regions.