Tata Power Company Ltd: Pioneering a Green Energy Revolution

Introduction

Tata Power Company Ltd, India’s largest vertically integrated power company, is at the forefront of transforming the energy landscape. Committed to sustainability, the company is engaged in the generation, transmission, and distribution of electricity, with a focus on renewable sources. In this article, we delve into the key aspects of Tata Power’s operations, its global footprint, and its ambitious targets for the future.

 

Power Portfolio: A Diverse Mix

Tata Power’s power portfolio is an impressive testament to its commitment to diversity and sustainability. As of H1FY24, the company boasts a substantial energy capacity of 14,381 MW. This includes 8,860 MW from thermal sources, 1,007 MW from wind, 880 MW from hydro, 443 MW from waste heat recovery/BFG, and a significant 3,191 MW from solar. Notably, an additional 3,760 MW of renewable capacity is under construction.

The distribution of the installed capacity further reflects the company’s commitment to green energy. Solar leads the way with 22%, followed by thermal at 62%, wind at 7%, waste heat/BFG at 3%, and hydro at 6%.

Capacity Utilization and Operational Presence

In the dynamic energy sector, Tata Power maintains robust capacity utilization rates. In H1FY24, thermal capacity utilization stands at an impressive 77.2%, with specific projects such as Mundra and MO Hydro contributing significantly. Wind and solar utilization rates, at 28% and 23% respectively, underscore the company’s comprehensive approach to energy generation.

Tata Power’s presence across the value chain is noteworthy. From the generation of power through thermal and renewable sources to transmission and distribution, the company also offers ancillary services like EPC (Engineering, Procurement, and Construction) and O&M (Operations and Maintenance).

Renewable Energy Segment: A Driving Force

The Renewables Segment is a pivotal component of Tata Power’s operations, contributing to the company’s green energy initiatives. It involves the generation of power from renewable sources such as wind and solar. With a focus on sustainability, Tata Power has become a key player in the renewable energy sector, reflecting a broader industry trend towards cleaner energy alternatives.

 

 

Transmission & Distribution: Expanding Reach and Services

Tata Power’s Transmission & Distribution segment plays a crucial role in the energy value chain. The company’s retail customer base has expanded significantly, reaching approximately 12 million after acquiring a stake in Odisha’s distribution business. With 4,383 Ckm operational capacity and 906 Ckm in the pipeline, Tata Power is poised for continued growth in this segment. Noteworthy projects like Jalpura Khurja Power Transmission Limited and Rajasthan Phase IV Part C further showcase the company’s commitment to infrastructure development.

Tata Power EV Charge: Best EV charging stocks

As electric vehicles (EVs) gain traction globally, Tata Power is at the forefront of the EV charging infrastructure revolution. The Tata Power EZ Charge initiative stands out as the only charging point operator in India operating in bus charging, fleet, home, and public charging. With a market leadership share of approximately 55% in public charging and 85% in home charger installations, Tata Power is making substantial strides in promoting sustainable transportation.

 

 

Global Presence: Building a Sustainable Future Worldwide

Tata Power’s influence extends beyond national borders, with a strong global presence. The company has a significant stake in hydro projects in Georgia and Zambia, with installed capacities of 187 MW and 120 MW, respectively. In Bhutan, Tata Power holds a 26% stake in the Dagachhu hydro project with 126 MW capacity. Additionally, the company has coal mines in Indonesia through associate entities, highlighting its commitment to diverse energy sources.

Brownfield Projects: Meeting Future Energy Needs

Tata Power is investing in brownfield projects to meet the growing energy demand. The Bhivpuri PSP brownfield project, with a capacity of 1000 MW, is set to begin in mid-2024, aiming for completion by the end of 2027. Another notable project, the 1,800 MW Shirawta PSP brownfield project, is scheduled to start in mid-2024, with completion targeted for the end of 2028. These projects signify Tata Power’s strategic vision for sustainable energy solutions.

Ambitious Targets for a Sustainable Tomorrow

Looking ahead, Tata Power has set ambitious targets for itself. The company aspires to achieve 500 GW by 2030, implying an impressive annual capacity addition of 45 GW. With 179 GW installed by October 2023 and 97 GW of projects in progress, Tata Power aims to fulfill the remaining capacity through auctions until FY28. The company’s commitment to green energy is evident, with a target of over 20 GW by 2030, accounting for 70% of the total capacity. Tata Power EZ Charge also has its sights set high, targeting over 10,000 public chargers and over 200,000 home chargers by FY28.

 

Conclusion: Lighting the Path to a Sustainable Future

Tata Power Company Ltd’s journey reflects a commitment to sustainability and innovation in the energy sector. From a diverse power portfolio to global initiatives and ambitious targets, Tata Power is playing a pivotal role in shaping a sustainable and green energy future. As the world grapples with the challenges of climate change, Tata Power stands as a beacon of hope, lighting the path towards a brighter and more sustainable tomorrow.

 

Metric	Value
Market Cap	₹ 1,04,376 Cr.
Current Price	₹ 327
High / Low	₹ 347 / 182
Stock P/E	30.6
Book Value	₹ 94.3
Dividend Yield	0.62 %
ROCE	11.7 %
ROE	12.6 %
Face Value	₹ 1.00
Industry PE	19.6
PEG Ratio	0.67
Pledged Percentage	1.40 %
Free Cash Flow	₹ -447 Cr.
Promoter Holding	46.9 %
Debt to Equity	1.74
Market Cap to Sales	1.78
Debt Capacity	-0.04
Mkt Cap To Debt Cap	1.20
Reserves	₹ 29,817 Cr.

Quarterly Results

Period	Sales (+)	Expenses (+)	Operating Profit	OPM %	Profit before tax	Net Profit (+)	EPS in Rs
Sep 2020	8,290	6,323	1,967	24%	689	371	0.88
Dec 2020	7,598	5,864	1,734	23%	421	318	0.78
Mar 2021	10,363	8,937	1,425	14%	373	481	1.23
Jun 2021	10,132	7,984	2,149	21%	1,038	466	1.22
Sep 2021	9,810	8,481	1,329	14%	638	506	1.32
Dec 2021	10,913	9,279	1,634	15%	788	552	1.33
Mar 2022	11,960	10,091	1,869	16%	71	632	1.57
Jun 2022	14,495	12,812	1,683	12%	1,062	884	2.49
Sep 2022	14,031	12,270	1,760	13%	1,373	935	2.56
Dec 2022	14,129	11,810	2,319	16%	1,864	1,052	2.96
Mar 2023	12,454	10,526	1,928	15%	1,158	939	2.43
Jun 2023	15,213	12,500	2,713	18%	1,476	1,141	3.04
Sep 2023	15,738	12,967	2,771	18%	1,231	1,017	2.74

 

Profit & Loss:

Year	Sales (+)	Expenses (+)	Operating Profit	OPM %	Profit before tax	Net Profit (+)	EPS in Rs	Dividend Payout %
Mar 2012	26,069	21,185	4,884	19%	507	-898	-4.02	-27%
Mar 2013	33,177	27,583	5,595	17%	1,277	123	-0.32	-319%
Mar 2014	35,726	28,810	6,916	19%	975	12	-0.96	-114%
Mar 2015	33,593	27,292	6,301	19%	1,484	457	0.62	210%
Mar 2016	29,494	27,389	2,105	7%	1,281	786	2.45	53%
Mar 2017	27,588	22,114	5,473	20%	1,450	1,100	3.31	39%
Mar 2018	26,840	24,545	2,295	9%	2,773	2,611	8.90	15%
Mar 2019	29,881	26,811	3,070	10%	3,693	2,606	8.71	15%
Mar 2020	29,136	23,847	5,289	18%	1,958	1,316	3.76	41%
Mar 2021	32,703	25,747	6,956	21%	1,941	1,439	3.53	44%
Mar 2022	42,816	35,785	7,031	16%	2,535	2,156	5.45	32%
Mar 2023	55,109	47,381	7,728	14%	5,457	3,810	10.44	19%
TTM	57,534	47,803	9,731	17%	5,728	4,149	11.17	–

 

Balance Sheet

During the period from March 2012 to September 2023, the financial outlook of the entity showed significant growth. In 2012, the reserves were $12,437 million and borrowings were $33,860 million. Both showed fluctuations until 2018. However, in March 2022, the reserves surged to $28,468 million. Although the borrowings showed variations, they reached $52,923 million by September 2023. The total liabilities and assets also followed an upward trajectory, increasing from $61,604 million in 2012 to $132,106 million in September 2023. This financial evolution indicates the entity’s expansion and strategic financial management over the analyzed period.

Shareholding Pattern

Between June 2022 and September 2023, there were interesting changes in the ownership of the entity. The promoters held the largest stake throughout the period, with 46.86% ownership. Foreign Institutional Investors (FIIs) saw a small decrease in ownership, starting at 10.10% in June 2022 and ending at 10.00% in September 2023. Domestic Institutional Investors (DIIs) had a similar trend, starting at 14.70% and increasing to 15.68%. Government ownership remained constant at 0.32%. The public had varying levels of ownership, starting at 28.02% in June 2022 and decreasing to 27.15% by September 2023. During the same period, the number of shareholders ranged from 38,82,482 in June 2022 to 38,07,725 in September 2023. This information provides a comprehensive understanding of the evolving positions of stakeholders within the organization’s structure during the specified timeframe.