SJVN Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Flat revenue despite capacity adds: Q2 FY26 revenue held at ~₹1,000 crores, comparable to Q2 FY25, as new project contributions were offset by Himachal flood-driven plant closures, the expiry of an 80 IEA tax benefit (₹52 cr impact), and higher finance costs.
• Buxar Unit 1 is the quarter's operational win: The 660 MW unit completed 72-hour full-load running on 5 November 2025, with commercial operation declaration imminent, marking a major de-risking event for the 1,320 MW thermal project.
• The REIA tender book is large but the PPA pipeline is stuck: 13.74 GW of LOAs have been issued against 19.8 GW floated, yet only 3.74 GW of PPAs/PSAs are executed; management cites grid connectivity and transmission shortages as the bottleneck and expects clarity on untied power in two to three months.
• Capex is on track and steady: H1 spend of ₹3,600 cr puts the company on pace to comfortably meet the ₹7,500 cr FY26 target, with FY27 guided at ₹8,000 cr and a similar range for FY28 as hydro projects ramp slowly.
• What to watch next quarter: The commercial operation declaration for Buxar Unit 1, progress on Buxar Unit 2 (targeted Jan/Feb COD), the 320 MW Bikaner solar addition by mid-December, and any concrete resolution on the ~10 GW of untied REIA PPAs.

Buxar Thermal: The Near-Term Catalyst

• Unit 1 at the finish line: The unit was synchronized with the National Grid on 21 August 2025, virtually inaugurated by the Prime Minister on 22 August, and completed 72-hour continuous full-load running on 5 November 2025. Management stated commercial operation declaration is expected within one or two days.
• Unit 2 progressing on schedule: COD is targeted for January or February next year, and management confirmed it will definitely be commissioned within this financial year.
• Financial impact: Once units commission, capital work in progress shifts to fixed assets and the project starts generating revenue. Management does not foresee a large increase in the loan portion over the next two years and expects to service debt from Buxar's own cash generation.

Gupta: "Yes, regarding Buxar, as I told earlier, that we are going to declare the commercial operation of the plant within one or two days because already full load operation has been completed."

The Revenue Flatline: Why New Capacity Has Not Lifted the Top Line

• Floods hit the hydro fleet: High silt levels in Himachal Pradesh forced plant closures at Rampur and Nathpa Jhakri, reducing both energy charges and capacity charges. This was the primary operational drag on the quarter.
• Tax benefit expiry: The 80 IEA benefit for one project ended after completing its 10-year MAT utilisation period, causing a ₹52 crore income decrease.
• Finance cost and other income headwinds: Finance costs rose by approximately ₹50 crore, bank interest income fell by ₹26 crore, and late payment surcharges dropped by ₹17 crore as beneficiaries paid on time.
• Generation was actually up: Total H1 FY26 generation reached 944.2 crore units, a ~6.3% improvement over H1 FY25, driven primarily by the commissioning of Unit 1 of the Bikaner Solar Power Project. Nathpa Jhakri and Rampur also generated more than the prior year.

REIA Tenders: A Growing Book With a PPA Problem

• The tender pipeline is massive but back-end loaded: SJVN has floated 19.8 GW of tenders as a Renewable Energy Implementing Agency, issued LOAs for 13.74 GW, but executed PPAs/PSAs for only 3.74 GW. The gap between LOAs and signed PPAs is the central investor concern.
• Grid connectivity is the stated bottleneck: Management pointed to a surge in solar tenders across the market colliding with transmission line shortages, which means power cannot be evacuated even for commissioned plants. This is the "frankly speaking" reason offered for the PPA logjam.
• Stakeholder consultation underway, no firm deadline: Management acknowledged a notification regarding PPA signing timelines but did not confirm whether the deadline will be met. A consultation with the Ministry of Power, Ministry of Renewable Energy, and bidders is ongoing, with clarity on the action to be taken on untied power expected in two to three months.
• Balance PSAs: Management stated the remaining ~10 GW of PSA signing will happen "very soon or otherwise we will take some other call on these tenders," leaving open the possibility of re-bidding without committing to it.

Gupta: "The problem, frankly speaking, you must be knowing yourself also because there is a lot of like tenders which are coming out in the market, specifically for solar, there is some issue now because of the grid connectivity, there are transmission line shortage and because of that power is not getting evacuated even for the commission plant."

Project Pipeline: What Commissions When

• Near-term solar additions: 320 MW from Bikaner is expected this month or by 15 December at the latest, bringing total operational capacity to around 3,500 MW. An additional ~330 MW (Jamui 75 MW, Assam 120 MW, Bagodara 35 MW, Nawa 100 MW) is targeted this fiscal year, for a total of ~650 MW of RE solar commissioning in FY26.
• Next-year solar ramp: Management guided approximately 1.5 GW of solar commissioning next year.
• Hydro projects in advanced stages: Arun-III (900 MW, Nepal), Sunni Dam (380 MW), and Luhri Stage-I (210 MW) are progressing; a PPA with Uttar Pradesh Power Corporation has been signed for all three. At Arun-III, Unit 1 pit free is complete and electromechanical activities have commenced.
• Nepal construction start: Lower Arun (680 MW) and Upper Karnali (900 MW) are expected to go into construction in Q1 of the next financial year.
• Arunachal Pradesh portfolio is years away: Three of the five projects (totaling 5 GW) are still at the PFR stage; management acknowledged these will take time to move through PFR, DPR, and into construction. Tendering for Etalin and Attunli has started in parallel, with actual site construction targeted for next financial year, subject to clearances.

Capex: Steady State, Not Accelerating

• FY26 target is locked: The full-year target is ₹7,500 crore, with ₹3,600 crore spent in H1. Management expressed 100% confidence in comfortably meeting the government MOU target.
• FY27 and FY28 stay in the same range: FY27 capex is guided at ₹8,000 crore, with FY28 expected to be similar. The flat trajectory reflects Buxar (a capex-heavy thermal project) completing this year, while new hydro projects in Nepal start with low initial capex that ramps only after one or two years.
• Other tenders in motion: A 1,250 MW battery energy storage tender will be floated within a month or two, a 1,200 MW wind tender is already out, and pump storage plant tenders will be floated on a tariff-based competitive bidding basis.

Gupta: "So in the beginning when we start any hydro project the capex is not very high but after one or two years then the capex start increasing. So that is the reason why the capex is in the same range and not increasing year on year basis."

Strategic Positioning & Other Updates

• REIA mandate: SJVN is listed as a Renewable Energy Implementing Agency by MNRE to contribute to the 500 GW renewable energy target by 2030. Management affirmed it will meet the target given by the government.
• PM-Surya Ghar scheme: SJVN has been entrusted with implementation across Himachal Pradesh, Punjab, and Arunachal Pradesh, plus rooftop solar installation on government buildings covering 18 ministries. Vendor empanelment for government buildings is complete.
• SJVN Green Energy listing on hold: Management stated there is no plan for a listing for at least the next year; a decision will follow after assessing market conditions and the commissioned project portfolio.
• Consolidation, not acceleration: Management described the current posture as one of consolidating its position, with the priority being to complete under-construction projects quickly so they can start generating revenue.

Gupta: "SJVN Limited is in a very sound footing. There is no issue as of now regarding the growth of the company and we are slightly trying to consolidate our position as of now, mainly the under-construction projects which are there and we just want to complete them fast so that we can start generating the revenue."

Guidance & Commitments

Key Metrics