Tata Power Mulls To Double Capex To Rs 12k Cr In FY24; Focus On Renewables

New Delhi: Tata Power has planned to double its capital expenditure to Rs 12,000 crore in the current fiscal, with a focus on renewables, distribution, transmission and solar equipment manufacturing capacity. "To meet the growth targets, your company (Tata Power) plans to invest about Rs 12,000 crore, which is double the capex spent in FY23," Tata Power Chairman Natarajan Chandrasekaran said while addressing the 104th annual general meeting on Monday.

This capex, he informed, includes the investment in the upcoming 4 GW manufacturing plant, under-construction renewable projects, transmission and distribution businesses in Odisha, Delhi and Mumbai, and new opportunities.

"Your company plans to fund these projects largely from internal accruals and cash on books," he told the shareholders. He assured that the 4 GW cell and module manufacturing plant in Tamil Nadu is well on track, and we expect the module line to be ready by October 2023 and the cell line by the end of the year.

Tata Power will also focus on the power distribution business in the country and bid for discoms utilities in the country. "Given the company's successful track record in turning around Discoms, it will look to participate in privatisation opportunities as and when the policy reforms are undertaken," he said.

Tata Power plans to become an ESG benchmark in the power sector with progress being made on the 3 key goals outlined - becoming Carbon Net Zero by 2045, 100 per cent Water Neutral by 2030, having No Net Impact on Biodiversity before 2030 and an organisation with Zero Waste to Landfill before 2030. Based on the performance, directors have recommended a dividend of 200 per cent, which is Rs two per equity share of Rs one, he stated.

As a result of the better performance across its businesses, there was a consolidated revenue growth of 32 per cent at Rs 56,033 crore against Rs 42,576 crore in FY22, he noted. Consolidated Reported PAT (net profit) increased by 77 per cent at Rs 3,810 crore against Rs 2,156 crore in FY22 due to better performance across all business clusters.

In 2022, the renewables sector saw the maximum investment of USD 500 billion out of the USD 1.11 trillion low-carbon energy investments made globally, he pointed out. In India, Chandrasekaran said that the combination of accelerated economic growth, rising industrial and commercial activities, and shifting weather patterns (including heatwaves) propelled the peak power demand in the early months of FY23 to record high levels of 216 GW.

India's power demand grew rapidly at about 9 per cent in FY23 and in the last five years, power demand growth has surpassed the GDP growth rate of the country by 1.11x. In spite of the high growth, India's per capita power consumption continues to be the lowest in the world, he noted. In the coming years, renewables will continue to be the key focus with a target of achieving 500 GW of non-fossil installed capacity in 2030, he noted.

India is the only major economy, which is using renewable growth towards meeting the country's power demand growth and not replacing/substituting thermal power, he said.

"Your company, being one of the largest integrated power players, is well positioned to take advantage of the growth opportunities in the sector," Chandrasekaran told shareholders.
In solar rooftop, he told shareholders that the company has built an extensive channel network of 450 dealers across 275 districts, providing a significant advantage.

During the last quarter of the fiscal FY23, solar rooftops, along with the captive solar EPC projects, crossed Rs 1,000 crore in revenue, doubling from the previous year, he stated.
For the full year, the company delivered a revenue of 2,770 crore growing at 83 per cent year-on-year. The business has a healthy closing order book of thousand and hundred crores as of March 2023, in the solar rooftop segment, he noted.

The Distribution business has done well. It continues to serve more than 12 million customers, making your company the largest private power distribution utility in the country, Chandrasekaran stated.
While the country is in the midst of an energy transition, it is critical for conventional power plants to continue to run at optimal capacity given the surge in the power demand, he pointed out.
"In this regard, your company's conventional plants continued to be available at close to 90 per cent," he stated.