Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SJVN Ltd (BOM:533206) successfully commissioned the 90 MW Onkareware floating solar power project, which is now fully operational.

• The company signed an MOU with the government of Bihar for a 1,000 MW pump storage plant, expected to generate significant energy annually.

• SJVN Ltd achieved a 26.3% increase in power generation compared to the previous year, with a total of 10,084 million units generated.

• The company has a robust under-construction portfolio of 4,936 MW, including hydro, thermal, and solar projects.

• SJVN Ltd was recognized as the first runner-up in the SHRM award for excellence in managing workforce in the public sector enterprises category.

Negative Points

• There is a delay in signing Power Purchase Agreements (PPA) due to pending Power Sale Agreements (PSA), affecting project timelines.

• Geological challenges have delayed the commissioning of the Arunachal hydro project, pushing it to the last quarter of FY 2027.

• Interest expenses have increased significantly due to borrowing for ongoing projects, impacting financial performance.

• The company faces delays in solar projects due to issues with module production and land acquisition.

• There is a need for improved communication with investors, as suggested by requests for detailed project presentations.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with BOM:533206.

Q: Is there a gap in signing the Power Sale Agreement (PSA) and Power Purchase Agreement (PPA) for the renewable portfolio? A: Yes, the gap exists due to the delay in signing the PSA. Once the PSA is signed with interested companies, the PPA will follow, allowing developers to proceed with plant installations. (Respondent: Unidentified_3)

Q: When is the Buxar Thermal Power Project expected to be commissioned? A: The first unit of 660 megawatts is expected to be commissioned in May, with the second unit following four months later. The entire capacity of 1,320 megawatts will be operational within this year. (Respondent: Unidentified_3)

Q: What is the expected capacity addition for FY 2025-26? A: Approximately 1,500 megawatts will be added, including 1,320 megawatts from the Buxar project and 200-250 megawatts from solar projects. (Respondent: Unidentified_7)

Q: What is the reason for the increase in interest expenses? A: The increase is due to borrowing for capital expenditures as the company is in a growth phase, with significant capacity expected to be commissioned in FY 2025-26. (Respondent: Unidentified_10)