Investor Presentaiton
TATA
TATA POWER Indian Power Sector - Challenges galore
Low Capacity Utilization:
Installed capacity (345 GW) is twice of the peak demand (177 GW) resulting in low
utilization
24 GW thermal assets stranded putting pressure on the banking system
While Energy demand has grown, it has not kept pace with growth in Indian
Economy
Capacity glut & weak SEB finances impacted thermal PLFs; FY18 saw initial signs
of reversal of decline in PLF
Stress on financials of Discom not yet resolved:
UDAY impactful with shifting of losses & reduction of AT&C losses but ARR-ACS
gap needs to be addressed
Cross subsidy burden on
Sharp increase in receivables stretching developers and lending system
Declining trend in Solar tariffs:
Intense competition coupled with declining module prices driving tariffs down;
renewable tariffs have achieved grid parity
Discoms preferring 3-5 year PPAs and avoiding LT PPAs for thermal assets
Power demand & GDP growth data
12
10
8
B
4
2
0
GDP growth (%)
Power demand growth (%)
Power demand to GDP growth (x)
1.4
1.2
1.0.
0.8
0.6
04
0.2
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Source: MoSPI, CEA, I-Sec Research
ACS-ARR Gap (Rs p.u.)
0.6
0.51
0.5
0.45
0.4
0.3
0.2
0.1
FY17
FY18
7MFY19
0.35
0.29
0.27
0
Dec 16
Mar 17
Dec 17
Jun 18
Sept 18
Discoms' dues increasing in FY19
Wind power-minimum tariffs
Solar power - minimum bids
9
8.40
Discoms' outstanding dues (Rs bn)
300
8
7.00
7
8.50
250
High revenue dependence on Industrial segment
Industrial/Commercial Domestic Agriculture Others
(Rs/kWh)
5.27
5.03
5.07
4.77
4.37
4.34
100.0%
10.2%
9.4%
259.8
248.2
7.7%
234.0
80.0%
22.4%
23.3%
189.7
200
184.1
60.0%
161.1
27.09
150-
5.05
4
3.48
100
m N
3
2.44
2.43
40.0%
58.8%
20.0%
40.4%
2.47
50
2.
+
+
+
FY12 FY13 FY14 FY15 FY18 FY17
FY18
0.0%
0
Mar'18
% of power sale revenues
Apr'18
May 18
% of power sale volumes
Jun'18
Jul 18
Aug 18
Source: Industry, CERC, I-Sec Research; FY17 data for wind tariff is bid-based
Source: PFC AR 16, 1-Sec research
A
Tata Power's controlled aggression in Renewables driving healthy business growth
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