Tata Power's Renewables Business Revenue Up 7% YoY in Q2 FY23

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Tata Power reported a profit of ₹18.19 billion (~$220.89 million) in 1H FY 2023, registering a growth of 87% over the same period a year ago. For Q2 FY 2023, profit stood at ₹9.35 billion (~$113.55 million), an increase of 87%.

The company attributed the increase in profit to improved performance across all businesses.

The company posted a 49% jump in revenue at ₹289.39 billion (~$3.51 billion) in the first half (1H) of the financial year (FY) 2023 over the corresponding period a year ago. For the second quarter (Q2) FY 23, the revenue rose by 49% to ₹141.63 billion (~$1.72 billion).

The increase in revenue was mainly because of higher power prices in the distribution business, higher availability of power in its Mundra coal plant, and capacity additions in renewables.

The total renewable capacity increased to 5,660 MW from 5,524 MW in the previous quarter. Of the 5,560 MW, 3,870 MW is installed and 1,790 MW are under various stages of implementation.

The revenue from the renewables business rose to ₹16.03 billion ($190 million), a 7% YoY increase compared to the ₹14.94 billion (~$180 million) recorded in the same period last year.

The consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) stood at ₹41.5 billion (~$503.97 million) in 1H FY 2023, an increase of 1% compared to ₹40.97 billion (~$497.54 million) in the same period last year.

For Q2 FY 2023, the EBITDA figures stood at ₹20.43 billion (~$248.09 million) as against ₹17.32 billion (~$210.33 million) during the same period last year.

The increase in EBITDA was because of higher capacity addition in renewables and higher efficiencies achieved in the distribution business, especially in Odisha distribution companies (DISCOMs).

The company completed 625 MW of large-scale renewable engineering, procurement, and construction (EPC) projects with a strong EPC order book of 3,799 MW, worth ₹152.61 billion (~$1.85 billion). At the end of September, the rooftop solar business order book pipeline stood at ₹14.34 billion (~$174.14 million).

Revenue of ₹5.77 billion (~$70.07 million) was posted in the rooftop solar segment, marking an increase of 94% compared to ₹2.98 billion (~$36.18 million) in the same period last year. The numbers increased by 3% against ₹5.61 billion (~$68.13 million) in the last quarter. The company won orders of 330 MW during the quarter, of which 90 orders were from the C&I segment.

Also, Tata Power is planning to set up a green energy portfolio of 10,000 MW in Rajasthan in the next five years. It also aims to install 400,000 smart meters across Tata DISCOMs in Odisha, Delhi, and Mumbai.

Tata Power set up 450+ electric vehicle (EV) charging points across 350 national highways. It is also planning to set up 60+ EV charging points across JP Infra’s residential projects to accelerate sustainable mobility in Mumbai.

In August, a wholly-owned subsidiary of Tata Power, Tata Power Renewable Energy (TPREL), approved the allotment of 83.6 million equity shares with a face value of ₹10 (~$0.125) each at a price of ₹239.22 (~$2.99) per share, including a premium of ₹229.22 (~$2.87), to support TPREL’s growth plans financially. The allotted shares aggregated to ₹20 billion (~$251 million) on a preferential basis to GreenForest New Energies Bidco, a joint investment vehicle of BlackRock Real Assets and Mubadala Investment Company owned by the Abu Dhabi government.

Tata Power has planned an expenditure of more than ₹750 billion (~$9.46 billion) until 2027 on renewables. It also aims to scale its operations towards becoming a net-zero company by 2045, water-neutral by the end of the decade, and zero waste-to-landfills before 2030.