Power utilities likely to see moderate growth in Q3FY25 earnings

Power utilities may report moderate growth in earnings for 3QFY25. Generation is up 3 percent Y-o-Y in Q3 on lower cooling demand and high base, to 429 billion units (BU).

 

Peak demand was steady at 224GW in Q3FY25, a 10 per cent decline from the record highs of 250GW in May 2024. Coal-based generation held steady at 319BU, hydro generation surged by 27 per cent to 34BU. Gas-based generation fell by 20 per cent Y-o-Y to 5.4BU. Renewable generation rose 14 per cent Y-o-Y to 47BU. Year-to-date, generation has increased 5 per cent Y-o-Y to 1,387BU.

   

Global coal prices are down due to oversupply and weak demand in China. The e-auction premium was in the range of 65-70 per cent in Q3FY25. Trading volume grew 16 per cent Y-o-Y to 30BU in Q3FY25, which contributed to lower prices on exchanges. In the day ahead market (DAM), average prices for Q3FY25 stood at Rs 3.71 per unit, a 26 per cent Y-o-Y decline.

   

Renewable energy tenders issued in Q3FY25 dropped by 51 per cent Y-o-Y to 18GW. Battery storage tenders gained traction, up 320 per cent Y-o-Y to 1,825MW. Around 155 MW of solar capacity was commissioned by NTPC in Q3. It recorded a 3.82 per cent Y-o-Y increase in generation to 326BU. It has an ambitious target of 60GW of renewable capacity (RE) by CY32. Management plans to commission 16GW of RE capacity over the next three years.

   

Power Grid Corporation of India has a capex and capitalization guidance of Rs 18,000 crore for FY25. It has capex and capitalization targets of Rs 25,000-30,000 crore in FY26 with a project pipeline of Rs 2 trillion for the next 7–8 years. Regulated equity to increase to Rs 87,900 crore in Q3FY25 while revenue and net profit may increase 4 per cent and 5 per cent, respectively. 

   

In Tata Power, expect revenue to rise 11 per cent Y-o-Y and net profit up by 13 per cent Y-o-Y. Generation for JSW Energy increased 12 per cent Y-o-Y to 4,600 MU. JSW Energy aims to achieve 10 GW operational capacity by FY2025 and currently has 7.7GW operational. It also has 16.2GWh of locked-in energy storage capacity through battery energy storage system and hydro pumped storage project. Revenue and net profit may likely increase 12 per cent and 31 per cent, respectively.

   

In NHPC, hydro generation for Q3 rose 27 per cent Y-o-Y. Overall generation increased 4 per cent Y-o-Y to 3762MU. Revenue and net profit may rise 7 per cent and 8 per cent, respectively.

 

Torrent Power's generation declined 27 per cent Y-o-Y to 1,147MU on reduced generation from its gas-based plants. Revenue and net profit are likely to decline 15 per cent and 9 per cent, respectively.

 

Volume momentum continues for IEX in Q3. Expect a 16 per cent Y-o-Y rise in revenue and net profit by 14 per cent Y-o-Y. Generation for SJVN increased 12 per cent Y-o-Y to 1,337MU in Q3FY25. Revenue to grow by 8 per cent Y-o-Y while net profit may increase by 12 per cent Y-o-Y. It has lowered FY25 capacity addition target to 1,800MW,

   

Coal India’s coal production increased by 1.5 percent Y-o-Y to 202 million tonnes in Q3FY25. Its offtake increased 1.5 per cent Y-o-Y to 194 million tonnes in Q3FY25. Expect revenue to increase by 1 per cent Y-o-Y and net profit by 5 per cent Y-o-Y. In NLC India, generation declined 6 per cent Y-o-Y to 4,411MU. 

   

It aims to expand its mining capacity to 104 mtpa from 50 mtpa currently. Revenue and net profit to decline 5 per cent and 1 per cent , respectively. CESC reported a 9.8 per cent Y-o-Y rise in revenue to Rs 3,600 crore in Q3FY25. EBITDA rose by 76 per cent Y-o-Y to Rs 610 crore, with operating profit margin improving to 17 per cent from 11 per cent in Q3FY24. Interest expenses grew by 14.5 per cent Y-o-Y to Rs 340 crore, and net profit declined by 6.3 per cent to Rs 280 crore.

   

CESC plans to invest in 3.2GW of hybrid renewable energy (RE) projects in the next three years through its subsidiary, Purvah Green Power Private, with 1,200MW under implementation.