SJVN Ltd Q1 FY2025 Concall Summary

Key Takeaways

• Execution on track, but disclosure gaps frustrate: Q1 saw the COD of Raghanesda Solar and a record month at Nathpa Jhakri, yet management deflected multiple analyst questions on tariffs and project-level EBITDA, asking for queries by mail instead.
• Portfolio diversification accelerates: SJVN secured its first pumped storage project (Darzo Lui, 2,400 MW) and signed an MoU for green ammonia, while its renewable energy implementing agency (REIA) status positions it for the national 500 GW target.
• Arun-3 is the critical path to near-term growth: The 900 MW Nepal hydro project is now targeting a Q3 FY26 commissioning, with civil works awards expected in the next 2-3 months after CCEA clearance.
• Balance sheet is stretching for the build-out: Management guided for approximately ₹6,500 crores in debt addition over the next two years, taking total debt to roughly ₹28,000 crores, while also planning a ₹2,000 crore stake sale in its green energy subsidiary.
• What to watch next quarter: The award of civil works for the 669 MW Lower Arun project in Nepal, progress on the SGEL stake dilution, and whether management provides the project-level disclosures investors have requested.

Project Execution & Milestones

• Hydro fleet delivered record output: Nathpa Jhakri (1,500 MW) recorded its highest ever monthly generation of 122.22 crore units in July 2024 since commissioning in 2004, and all three hydro plants achieved their highest single-day generation ever.
• Plant availability remained strong: Nathpa Jhakri operated at 104.94% availability and Rampur at 104.83% during the quarter.
• Arun-3 tunnel breakthrough achieved: Heading excavation of the 11.8 km head-race tunnel for the Arun-3 Hydro Electric Project in Nepal was completed in June, a key derisking event for the project's timeline.
• Buxar Thermal readies for commissioning: The 400 KV Buxar-Naubatpur line was charged in May 2024 to provide start-up power, and the power reduction system is ready, with the first 660 MW unit expected this financial year.
• Omkareshwar Floating Solar partially online: 90 MW was commissioned on 8th August 2024, with a power sale agreement signed with REWA Ultra Mega Solar Limited and MP Power Management Company Limited.

Sushil Sharma: "With the commissioning of this project, our total installed capacity of SJVN now stands at 2466.50 MW."

Portfolio Expansion & New Business

• First pumped storage entry: The Government of Mizoram allotted the 2,400 MW Darzo Lui Pumped Storage Project to SJVN, marking the company's first PSP in its portfolio, with DPR preparation now under progress.
• Green hydrogen adjacency: SJVN Green Energy Limited signed an MoU with AM Green Ammonia India Private Limited for a green ammonia platform, diversifying beyond pure-play generation.
• Rooftop solar mandate secured: Under the PM Surya Ghar Muft Bijli Yojana, SJVN was allotted three states (Himachal Pradesh, Punjab, Arunachal Pradesh) plus responsibility for rooftop solar on government buildings across 18 ministries, with vendor empanelment initiated.
• Assam solar JV formed: A joint venture with Assam Energy Renewable Limited was established for the development of 1,000 MW of solar projects exclusively in Assam.
• REIA tender target met: In Q1 FY25, SJVN achieved 100% of its target by floating tenders for 4.8 GW, reinforcing its role as a renewable energy implementing agency for the national 500 GW goal.

Financials & Capital Management

• SGEL delivered a profit: SJVN Green Energy Limited reported Q1 revenue of ₹41 crores and a profit of ₹29 crores, though the profit was elevated due to interest and other income.
• Incentive income contributed meaningfully: Q1 incentive income from UI and capacity incentives totaled ₹65 crores.
• Stake dilution planned to fund growth: Management is targeting ₹2,000 crores through the dilution of a 20% stake in SJVN Green Energy Limited in FY25, subject to approval from NITI Aayog and DIPAM.
• Debt to rise with the capex cycle: Estimated debt addition of approximately ₹6,500 crores over the next two years will take total debt to roughly ₹28,000 crores by the end of the next fiscal year, alongside a plan to securitize approximately ₹2,000 crores of Nathpa Jhakri assets.
• FY25 revenue guided at ~₹3,200 crores: Management provided a top-line expectation for the full year, though it declined to share FY27 addition plans on the call, asking analysts to send queries by mail.

Tariff & Disclosure Pushback

• Tariff question went unanswered: An analyst noted the Q1 landed tariff appeared to be ₹2.60 per unit, roughly 17% lower than the prior-year quarter, and asked for the rate on excess power sold above design capacity. Management did not address the decline or the excess power rate, stating only that tariffs differ by project and cannot be averaged.
• Omkareshwar EBITDA challenged: When an analyst calculated that the Omkareshwar Floating Solar project should generate approximately ₹55 crores in EBITDA against management's estimate of ₹10 crores, management declined to reconcile the figures on the call, requesting the question be sent by mail.
• Rooftop solar capacity target withheld: A request for the capacity target under the solar rooftop scheme was deflected with a request to email the query.

Management: "You can put your questions through mail, and we will reply properly. I think it won't be proper to just guess and everything. We will come out with the exact figures."

Guidance & Commitments

Key Metrics