Mundra resolution, RE portfolio key drivers for Tata Power

Tata Power is the country’s largest private integrated utility and is present across the value chain in generation, transmission and distribution and it has set ambitious growth targets.

- DEVANGSHU DATTA

The company is building up its renewables portfolio with backward integration via in-house solar (engineering procurement and construction (EPC) and module/cell manufacturing.It has also turned around the Odisha discoms it acquired in 2021. It has a substantial execution pipeline of hydro/PSP and transmission projects. To achieve a 15 per cent operating profit over FY25-30, it envisages ₹24,000-25,000 crore annual capital expenditure during FY26-30. It is targeting a mix of renewables at 60 per cent, transmission at 20 percent, power distribution at 7 per cent, and pumped hydro storage (10 per cent).

Tata Power expects to report an annual operating cash flow of ₹15,000 crore and it has the required balance sheet strength with a net-debt-to-equity ratio at 1.1 times.

The management targets to sustain project returns in the mid-teens. There are concerns about the Mundra thermal plant where operations continued under a temporary arrangement on a cost-plus basis. This was not extended beyond June, 2025. As a consequence, all five units of the plant remain inoperative.

The company is working on setting up a long-term agreement with power purchase agreement counterparties and the state government.