Tata Power's Ambitious Plan to Double Profits and Revenue through Renewable Energy Expansion

In an ambitious move, Tata Power is charting a course to double its profits and revenue within the next three years, with a primary focus on expanding its presence in the renewable energy sector, as stated by Chief Executive and Managing Director Praveer Sinha on Tuesday.

Addressing reporters at the Bhivpuri power plant near Mumbai, Sinha outlined the company's targets, stating, "We will aim to double our revenues and PAT (profit after tax) by FY27." He projected a profit exceeding Rupees 4,000 crore and anticipated revenues crossing Rupees 60,000 crore in FY24.

Tata Power has already made significant strides, posting a PAT of Rupees 2,158 crore on revenue of Rupees 30,446 crore in H1FY24. Sinha highlighted the accelerated pace, stating, "In revenues, what we used to achieve in a full year, we are now accomplishing in half a year. In PAT, what took us a year is now achieved in a quarter."

The company, experiencing quarterly improvements in its financial performance, is poised for even greater success in the upcoming quarters, according to Sinha.

Emphasizing a commitment to renewable energy, Tata Power has allocated a substantial capex of Rupees 60,000 crore until FY27, with 45% earmarked for clean energy projects. Sinha disclosed that approximately 4000 MW is under construction and set to be completed within 24 months.

Looking ahead, Sinha outlined a bold vision, stating, "By 2030, 70% of the company’s capacities will be derived from clean energy, and by 2045, we aim for a complete transition to 100% clean energy, up from the current 40%."

Presently boasting 5500 MW of clean energy, including 3200 MW of solar, 1000 MW of wind, and 1300 MW of hydel power, Tata Power plans to augment its capacities to 9500 MW in the next 24 months. Notable projects in the pipeline include a 1000 MW pumped hydro storage project in Bhivpuri and an additional 1800 MW in Shirota near Pune, with a combined investment of Rupees 13,000 crore.

Sinha affirmed the company's strategic approach, stating, "We will pursue a debt-to-equity ratio of 70:30 for both projects, with Bhivpuri scheduled to be operational by mid-2027 and Shirota by 2028." Additionally, Tata Power is exploring the generation of 9 GW of power in existing reservoirs.

In the realm of transmission projects, Sinha indicated the company's intention to bid for projects that can be executed on time and align with their targeted returns. This forward-looking strategy underscores Tata Power's commitment to sustainable growth and a robust presence in the evolving energy landscape.