SJVN Ltd Q3 FY2025 Concall Summary

Key Takeaways

• Generation surged, but project delays persist: Total generation jumped 26.3% YoY to 1,008.4 crore units, with all three hydro plants beating MOU targets. However, flagship projects Arun 3 and Buxar face geological and legacy delays, pushing key commissioning timelines out by 1-1.5 years.
• Profit growth muted by rising finance costs: Despite strong incentive income, surcharge income, and higher PLF, PBT growth was held back by higher finance costs tied to the growth-phase capex cycle and the monetization of return on equity.
• The RE pipeline is massive, but offtake is the bottleneck: A 7.2 GW awarded portfolio sits against only 2.2 GW under construction, with the gap entirely explained by delays in DISCOMs signing Power Sale Agreements (PSAs). Management expects this to improve within two months.
• FY26 is set to be a transformational year for installed capacity: The company plans to commission roughly 3 GW in FY26, effectively doubling its operational capacity, driven by the Buxar thermal plant and a large solar push.
• What to watch next quarter: Whether the MNRE-led intervention with state utilities actually unlocks the PSA/PPA logjam within the promised two-month window, and any further clarity on the Arun 3 geological challenges.

Operational Performance

• Hydro fleet delivered exceptional output: Nathpa Jhakri generated 683.02 crore units (vs 573.11 crore units YoY), Rampur generated 190.51 crore units (vs 161.2 crore units YoY), and all three hydro plants, including Naitwar Mori, met their MOU targets ahead of the fiscal year-end.
• Total generation growth was broad-based: Aggregate generation from all plants reached 1,008.4 crore units, an excess of 209.7 crore units and 26.3% ahead of the prior year.
• Profitability headwinds are structural and temporary: The increase in finance costs is attributed to borrowing for under-construction projects, a temporary burden until these plants are commissioned in FY26. Depreciation also rose because Naitwar Mori, commissioned in Q3 last year, now carries a full nine months of depreciation charges.
• O&M execution is a core strength: Management highlighted that the Nathpa Jhakri plant is running at a 110% Plant Load Factor (PLF) and the Rampur project at 109% PLF, positioning SJVN as a top-tier PSU on operational yardsticks.

R.K. Chaudhary: "I must assure you that are the best PSU having the O&M yardstick. Our Jhakri plant is running at 110 PF and the Rampur project is also 109 PF."

Project Execution & Delays

• Arun 3 dam faces geological setbacks: The 900 MW Nepal project is delayed by 1-1.5 years due to geological challenges at the dam site, pushing its commissioning to the last quarter of FY27. Barrel concreting for Unit 2 and the hydro test of the spiral for Unit 3 have been completed, indicating progress on other fronts.
• Buxar thermal plant nears first fire: Boiler light-up for Unit 1 was achieved in October 2024. The first 660 MW unit is expected to achieve Commercial Operation Date (COD) in May, with the second unit following four months later, meaning the entire 1,320 MW should be commissioned this year.
• Solar execution hit by module supply chain: The 1,000 MW Bikaner solar project, awarded to Tata as EPC contractor, was delayed because their factory could not commence module production in time, an industry-wide issue under the CPSU scheme requiring Indian modules. 137 MW of modules are now installed.
• Land acquisition remains a friction point: Other project delays are attributed to ongoing issues with the completion of land acquisition, though most capacities are still slated for completion in FY26 alongside Bikaner.

R.K. Chaudhary: "Unfortunately, at dam site, we are facing certain geological challenges. And because of that geological challenges, the commissioning is expected to be -- to get delayed. And during the last quarter of the financial year '27, we will commission the Arun 3."

Growth Pipeline & Offtake Risk

• A massive RE pipeline is stalled by DISCOM inaction: The gap between 7.2 GW of awarded tenders and only 2.2 GW under construction is solely due to delays in signing PSAs and PPAs. As a Renewable Energy Implementing Agency (REIA), SJVN must first secure a PSA with an interested DISCOM before a PPA can be signed with the developer.
• Government intervention is the catalyst: Management expects the situation to improve within two months, citing an upcoming MNRE-led meeting with state utilities to push them to embrace PSA signings.
• Pumped storage and floating solar MOUs expand the addressable market: A 1,000 MW pumped storage plant MOU was signed with the Government of Bihar, and a mega MOU with Rajasthan covers 5 GW of pumped storage and 2 GW of floating solar. Once DPRs are cleared, construction for pumped storage plants takes another four years.
• New business lines are being seeded: SJVN has been allotted three states under the PM Surya Ghar scheme for rooftop solar on government buildings, assigned a 1,500 MWh Battery Energy Storage System (BESS) target, and listed as an REIA by MNRE.

R.K. Chaudhary: "We are expecting that the things will improve within the next -- within 2 months."

Capacity Addition Trajectory

• FY26 is an inflection point for installed base: The company plans to commission roughly 2 to 2.5 GW, effectively doubling its current capacity. This includes the full 1,320 MW Buxar thermal plant, the 1,000 MW Bikaner solar project (hopefully by Q3 FY26), and another 200-250 MW of solar capacity.
• A 3 GW annual run-rate is the new normal: Management articulated a clear trajectory of adding roughly 3 GW of capacity every year, comprising a mix of solar, wind, hydro, and thermal assets.
• The 2030 vision is heavily tilted toward renewables: The 25 GW by 2030 target is split into 16 GW from renewable sources (solar and wind), approximately 8 GW from hydro, with the balance from thermal. The 50 GW by 2040 mission target underscores the long-term ambition.
• Arunachal Pradesh is the next frontier: A 5 GW portfolio in Arunachal, including what will be India's largest hydro project, is set to commence construction. Tenders for the largest project (3,097 MW) are targeted for award in FY26, with commissioning expected in FY30-31.

R.P. Goyal: "As of now, we are doubling our capacity in FY '26. And every year, we are going to — by FY '26, we are going to add, say, roughly around 3 gigawatt of capacity every year."

Strategic & Financial Considerations

• SJVN Green Energy listing is on the horizon: Management is planning and weighing options for a potential listing of its renewable energy subsidiary, possibly in the third or fourth quarter of FY26.
• O&M cost structure is under review: To tackle high O&M costs for solar and wind, the company is deliberating proposals, including creating a small subsidiary or a joint venture with a private player to operate outside the constraints of central government salary scales.
• Management declined to provide specific financial projections: On the call, management refused to share current or projected regulated equity figures or a depreciation run-rate for upcoming projects, asking analysts to request these numbers via email instead.
• A CBI case inquiry was deflected: When asked about a CBI case and internal procurement checks, management stated the matter is sub-judice and declined to comment on specifics, offering only a general assurance on governance.

Guidance & Commitments

Key Metrics