- 01 Apr 2025
- ICICIdirect Research
TATA POWER IS LOOKING AT THERMAL POWER CAPACITY EXPANSION
TATAPOWER - 384 Change: -8.95 (-2.28 %)News: As per media sources Tata Power is looking at Thermal power capacity expansion through acquisitions and brownfield expansions at some of it's existing facilities. This is a change in its commitment to exit coal based plants by FY40-45. The reason for change is due to muted returns from it's wind energy business. The company is looking to order 1 GW of wind energy turbines however the price at which turbines are being offered is beyond tata powers expectations. Company personal mentioned that the company has a cost of debt of 9% and one would not work on a project which is less than 13% equity return that is where the gap is. Tata power is aiming to double profit to ₹10K crore by FY30 from ~₹4500 crore.
View: This could increase downward pressure on wind turbine prices and limit growth for wind turbine OEMs like Suzlon, Inox Wind among others. Tata power's CEO had mentioned in August 24 that company would look at new thermal projects based on opportunities and returns they offer.
Impact: Neutral