SJVN Ltd Q4 FY2025 Concall Summary

Key Takeaways

• Generation surge drives the quarter: Total generation jumped 25.44% YoY to 10,647 crore units, led by a strong recovery at Nathpa Jhakri, while a solar asset impairment and lower other income weighed on reported profit.
• The build-out is accelerating: Management targets 4,995 MW of capacity additions in FY26, backed by a ₹8,300 crore capex plan, with Buxar Thermal Unit 1 and the balance of Bikaner Solar both due by October 2025.
• PPA execution de-risks the pipeline: PPAs were signed for 210 MW Luhri, 115 MW Sunni Dam and 200 MW Arun-3, and 5.2 GW of the 12.7 GW REIA-awarded capacity is now tied up, with the rest expected in FY26.
• A new, recurring income stream is taking shape: The REIA vertical is projected to contribute a ₹200 crore trading margin to the bottom line in FY27, scaling to roughly ₹1,200 crore by 2030, all without the capital intensity of owned generation.
• What to watch next quarter: The pace of solar commissioning toward the 3,675 MW FY26 target, the July 2025 synchronization of Buxar Unit 1, and any reversal of the solar impairment provision if generation recovers.

Operational Performance

• Hydro rebound: Nathpa Jhakri generation rose to 742.14 crore units from 631.18 crore units, an increase of ~110 crore units, while Rampur rose to 207.4 crore units from 177.8 crore units, driving the overall 25.44% YoY generation growth.
• Solar impairment taken: An impairment exercise on solar assets was completed this quarter, following a similar exercise on wind assets last year, primarily because actual PLF and generation deviated from design energy due to natural factors beyond the company's control.
• Depreciation spike: Depreciation and amortization nearly doubled QoQ because of a ₹143 crore impairment loss provision for three to four projects, booked as an accounting requirement rather than an exceptional item.
• Other income squeeze: Other income declined nearly 50% QoQ as capital deployed into under-construction projects reduced the fixed deposits with banks that had been the major constituent of interest income.

Management: "Though as a good corporate governance practice most of the industry players are not there with the impairment, but being a CPSU and we follow the highest of the corporate governance practices, so we provided for whatever will feel, as you know that impairment as would be done on every balance sheet date."

Capacity Addition & Commissioning Schedule

• FY26 target: 4,995 MW of capacity additions planned, comprising 1,320 MW thermal and 3,675 MW renewable, of which 320 MW of Bikaner Solar is already commissioned.
• Buxar Thermal: Steam blowing for Unit 1 (660 MW) was completed in January 2025, with synchronization and commercial operation date set for 15th July 2025; the second unit is expected between October and December 2025.
• Bikaner Solar ramp-up: 320 MW of the 1,000 MW project is now operational, with the second phase of 78 MW commissioned on 15th May 2025 and the balance capacity due by October 2025.
• Solar pipeline: 680 MW scheduled for September 2025, with other projects staggered from June 2025 through March 2026, putting total thermal-plus-solar commissioning at roughly 2,500 MW by December 2025.
• Arun-3 progress: Civil works are complete and the front has been given to the electromechanical contractor to start activities for Unit 2.
• Pumped storage early stage: Recently identified projects require a PFR followed by a DPR, an exercise that normally takes around two years to complete.

PPA & Offtake Security

• Major PPAs signed: A PPA was executed with Damodar Valley Corporation for the entire 210 MW Luhri Hydroelectric Project, 115 MW out of 382 MW from Sunni Dam, and 200 MW out of 900 MW from Arun-3 HEP.
• REIA PPA progress: Out of 12.7 GW awarded under the REIA vertical, 5.2 GW of PPAs and PSAs have already been signed, with the remaining 7.3 GW likely to be completed during FY26.
• REIA positioning: SJVN is faring better than all other three REIAs and has been listed by MNRE as one of the Renewable Energy Implementing Agencies for the 500 GW renewable energy target by 2030.

Bhupender Gupta: "This is really a great significant development because once we generate then we need to sell the power also so to sign the PPA prior to commissioning is a big achievement for any company."

REIA Vertical: The New Earnings Engine

• Income mechanics: The REIA vertical earns a trading margin plus a one-time success fee, with the trading margin recurring for 25 years once an asset is commissioned; management does not bank on the success fee as a material contributor.
• FY27 contribution: Roughly ₹200 crore is expected to be added to the bottom line from the trading margin in FY27, with FY26 contributing a smaller number because capacity under construction will be fully commissioned only in FY27.
• 2030 ambition: Management projects roughly ₹1,200 crore of trading margin through the REIA vertical by 2030, representing a material, capital-light income stream layered on top of the owned-generation business.
• Pipeline open-ended: MNRE has not given any specific capacity targets under REIA, so the company is doing its level best to add maximum renewable capacity through this vertical.

Capex, Debt & Regulated Equity

• Capex trajectory: ₹8,300 crore targeted for FY26, stepping up to ₹12,000 crore for FY27 as the project pipeline moves deeper into construction.
• Debt headroom: Incrementally, the company may raise another ~₹2,000 crore in FY26 if required, depending on project progress.
• Regulated equity floor: At the end of FY26 and FY27, minimum regulated equity will be around ₹1,945 crore, providing a base for the regulated-return business.
• No income guidance: Management declined to provide revenue or EBITDA guidance for FY26-27, stating it is company policy not to give future income guidance.

Himachal Dispute & Other Updates

• Cost reimbursement assured: For the disputed Himachal projects, the state government will reimburse all costs already incurred and those to be incurred until a final decision is taken, with interest.
• No probability assessment given: When asked about the chances of winning the court case, management pointed to the state government's actions (signing an MOU and allowing construction for years) as acceptance, but did not offer a legal probability or timeline for resolution.
• Italian hydro project: Forest Clearance Stage 1 is expected next month, environment clearance within two months after that, land acquisition disbursement by end of June, and investment approval from the Cabinet Committee by end of September or October.
• Attunli project (680 MW): Forest and environment clearances expected by September or October this year, with land acquisition being expedited.
• PM Surya Ghar scheme: SJVN has been assigned responsibility for installing rooftop solar on government buildings covering 18 ministries under the scheme.

R. P. Goyal: "They will be reimbursing all the costs which we have already incurred and which we are going to incur till the final decision is taken. The reimbursement will be along with interest."

Guidance & Commitments

Key Metrics