# 1. Financial Performance ## A. Key Figures * **Continuing Revenue:** ₹13,639 Cr Q2 FY26 (+slight) · ₹27,807 Cr H1 FY26 (-2.4%) * **Continuing EBITDA:** ₹5,333 Cr Q2 FY26 (-1.3%) · ₹11,076 Cr H1 FY26 (-5.3%) * **PAT:** ₹2,906 Cr Q2 FY26 (-11.9%) · ₹6,212 Cr H1 FY26 (-13.9%) * **Total Debt:** ₹47,254 Cr (Sep 2025) · ₹38,335 Cr (Mar 2025) * **Net Debt:** ₹36,776 Cr (stable) ## B. Revenue & EBITDA * **Resilient Core Performance:** Revenue and EBITDA held firm despite lower tariff realization, underpinned by cost-efficient operations and **remunerative PPAs**. * **One-Time Support:** Prior period income of **₹669 Cr** in Q2 FY26 provided uplift, primarily from late payment surcharges and legacy recoveries. * **Plant-Level Variance:** Mahan emerged as the top contributor with **EBITDA of ₹521 Cr**, while Tuticorin showed low profitability at **₹54 Cr EBITDA** on ₹677 Cr revenue. ## C. Profit After Tax * **Earnings Pressure from Tax:** PAT declined YoY despite stable PBT due to **higher deferred tax charges**, reflecting increased tax expense in both quarters. * **Cost Discipline Maintained:** Finance costs were controlled even as **depreciation rose** from recent plant acquisitions, preserving pre-tax margins. ## D. Cash Flow & Debt * **Debt Rises for Growth:** Increase in total debt driven by **bridge financing for capex and working capital**, aligned with expansion trajectory. * **Net Leverage Stable:** Strong cash accruals offset debt build, maintaining **net debt flat** and signaling disciplined capital allocation. * **Healthy Receivables:** Godda receivables at **~5 months’ payments**, with minimal delinquency (**only 0.5 months overdue**), indicating robust off-take and payment discipline. --- # 2. Capacity & Generation ## A. Key Figures * **Generation Capacity Target:** **42 GW** by 2032 (from 18 GW) * **Bids Outstanding:** **12,000 MW** across Rajasthan, Uttarakhand, Maharashtra, Uttar Pradesh, West Bengal * **Projects in Finalization:** **22,000 MW** advanced stage (up from 17,000 MW) * PLF: **64.8%** H1 FY26 (vs. 72.3% H1 FY25) · **72%** Godda Q2 FY26 (vs. 73% prior year) ## B. Installed & Planned Capacity * **Ambitious Expansion Trajectory:** Strategic capacity build-out to nearly 2.5x current levels by 2032, with accelerated commissioning expected in early phases. * **Robust Pipeline Visibility:** Significant project pipeline at advanced stages, driven by recent large-scale additions in Gujarat and Assam. * **Geographic Diversification:** Bidding activity spans key states, enhancing regional footprint and risk dispersion. * **Thermal Siting Trade-offs:** State-led location decisions balance fuel logistics savings against transmission inefficiencies. ## C. Projects Under Construction * **Rapid Asset Revival:** Successful re-commissioning of the 600 MW Butibori plant within two months post-acquisition, demonstrating operational agility. * **Assam 2 GW Project Secured:** Company confirmed as L1 bidder with commission approval received; formal award pending. * **Cross-Border Progress:** Godda Power Plant grid integration on track for December 2025. ## D. Plant Load Factor * **Sector-Wide Demand Pressure:** Weak power demand due to prolonged monsoon weighed on merchant tariffs and system-wide PLF, though overall volumes improved YoY. * **Outperformance at Godda:** Plant maintains **~72% PLF**, significantly above national thermal average, reflecting strong operational execution and import competitiveness. --- # 3. Power Sales & PPAs ## A. Key Figures * **PPA Portfolio Coverage:** **~91%** (up from 88%) * **Operational Capacity Under PPA:** **16,300 MW** out of 15 GW operational * **Power Sales Volume:** **2,370 Cr units** in Q2 FY26 (+7% YoY) * PPA Tariff Realization: ₹5.70/unit (stable) * Merchant Tariff Realization: ₹5.37/unit in Q2 FY26 (~10% decline YoY) ## B. PPA Volume & Coverage * **Extensive Long-Term Visibility:** Secured over **9 GW** of long-term PPAs from 5 GW awarded, with all agreements aligned through **FY29-30**, ensuring de-risked commissioning and cash flow stability. * **Robust Pipeline Momentum:** Additional **17 GW** of PPA bids in process, supported by proactive government demand planning, signaling strong confidence in future capacity absorption. * **High Contract Coverage:** Total PPA-tied capacity reaches **52 GW** out of a planned 72 GW pipeline, underpinned by recent wins including **2 GW in Assam (L1)** and **1,100 MW from existing assets**. ## C. Merchant vs. Contracted Mix * **Resilient Volume Growth:** Achieved **strong double-digit growth** in power sales despite adverse monsoon conditions, driven by competitive PPAs and low-cost merchant operations. * **Flexible Market Access:** Godda plant retains optionality to sell power domestically under pre-defined conditions, enhancing dispatch flexibility despite Bangladesh PPA. ## D. Tariff Realization * **Stable Contracted Pricing:** PPA realizations remain resilient at **₹70/unit**, with minimal repricing risk due to long-term fixed terms. * **Merchant Volatility Persists:** Sharp decline in merchant realization reflects market dynamics, though full-period average expected to stabilize around **₹6/unit**. * **Structural Shift in Bidding:** New standard bidding model quotes tariffs only for Year 1—**no 25-year levelization**—increasing repricing frequency and requiring active portfolio management. * **Cost Pass-Through Intact:** Fuel charges fully passed through; capacity charges broadly flat despite regional WPI fluctuations. --- # 4. Fuel & Cost Management ## A. Key Figures * **Fuel Expenses:** **₹7,205 Cr** Q2 FY26 (+4%) · **₹14,514 Cr** H1 FY26 (−8%) * **Other Expenses:** **₹814 Cr** Q2 FY26 (+24%) ## B. Fuel Cost Trends * **Cost Volatility:** Fuel expenses rose modestly in Q2 due to higher volumes and new plant operations, but H1 saw an **8% decline** driven by favorable regulatory changes and efficiency gains. * **Regulatory Benefit:** **Removal of coal cess and higher GST** led to a net reduction in fuel costs for most thermal plants, supporting margin resilience. ## C. Cost Pass-Through Mechanism * **Effective Recovery:** Fuel cost pass-through is systematically managed via a formula tied to **station heat rate**, ensuring alignment between actual performance and cost recovery. ## D. Mine Development Progress * **Strategic Self-Supply:** Dhirauli mine, located near the Mahan plant, will reduce logistics costs and enhance fuel security, with **box cutting completion expected by year-end** and production to follow next year. --- # 5. Capital Expenditure ## A. Key Figures * **Planned Expansion Capacity:** **23 GW** * **CAPEX Estimate:** **₹2 lakh crore** * **Projects Under Construction:** **4 projects (6,120 MW)** * **Equipment Ordered:** **Full 23.7 GW capacity** (8×800 MW to L&T, balance to BHEL) ## B. CAPEX Plan & Funding * **Execution Advantage:** Brownfield focus with **100% land availability** and near-final clearances enables faster, lower-risk development and reinforces capital cost leadership. * **Funding Strategy:** Majority of CAPEX self-funded via internal accruals; interim bridge financing to be sourced from domestic debt markets and banks over next 2–3 years. * **State Incentives:** Host states benefit from **material GST revenue** on both CAPEX and coal-based OPEX, enhancing local government support for project approvals. ## C. Equipment Ordering Status * **Supply Chain De-risked:** **100% advance ordering** of boilers, turbines, and generators across all under-construction projects ensures execution certainty. * **Vendor Confidence:** Delivery timelines remain on track despite cost pressures, with strong coordination between OEMs and project teams. ## D. Project Execution Timeline * **Ahead of Schedule:** All four under-construction projects are progressing **ahead of schedule**, with high confidence in on-time delivery and **no anticipated cost overruns**. --- # 6. Risks & Regulatory ## A. CERC Regulatory Proceedings * **Suo Motu Action Initiated:** CERC has launched a **suo motu petition** to adjudicate the ongoing regulatory matter, signaling heightened scrutiny. ## B. State-Level Tariff Adjustments * **Grid Access Conditional:** Regulations restrict power sales to the Indian grid solely to cases of **persistent scheduling failure by Bangladesh** or **PPA payment default**, both explicitly covered. * **In-State Power Allocation Burden:** Coal-rich states face a structural disadvantage due to mandatory power allocation at variable cost—**5% in Chhattisgarh**, **varying shares in Odisha**—impacting commercial flexibility. * **Tariff Adjustment Momentum:** **Several states have issued change-in-law notices** for tariff revisions; broader adoption expected as formal processes advance. --- # 7. Guidance & Outlook ## A. Key Figures * PPA Capacity Secured: 8.52 GW of 23.72 GW target by FY32 * **Commissioning Plan:** **3 GW** next year · **2.4 GW** following year · **3.2 GW** in third year · **7.2 GW** in FY29-30 * **Capacity Targets:** **30 GW** by FY30 · **42 GW** by FY32 ## B. EBITDA Expectations * **Positive Demand Outlook:** Power demand recovery expected to lift long-term offtake and short-term market participation, supported by recent **1 GW of new PPA awards**. * **Thermal Resilience:** Thermal tenders persist due to **baseload necessity**, as current battery projects remain **symbolic in scale** and insufficient for continuous supply. * **Strategic Positioning:** State-level tenders follow rigorous resource adequacy assessments, reinforcing thermal’s role even in renewable-rich regions like Gujarat. ## C. Commissioning Schedule * **Earnings Growth Catalyst:** New capacity commissioning begins next FY, enabling a **new cycle of rapid earnings growth** aligned with India’s energy security goals. * **Phased Ramp-Up:** First 12 GW addition exceeds original plans, with staged commissioning de-risking execution and enabling earlier cash flow generation.