Tata Power Company Limited · NSE:TATAPOWER
Tata Power — Investor Presentation (April 2019)
41 slides from Tata Power's investor presentation, April 2019
Slide 1: Investor Presentation April 2019
Investor Presentation April 2019 …Message Box ( Arial, Font size 18 Bold) 1
Slide 2: Disclaimer
Disclaimer This document does not constitute or form part of and should not be construed as a prospectus, offering circular or offering memorandum or an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries or affiliates in any
Slide 3: Indian Power Sector – Challenges galore
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 i
Slide 4: Light at the end of the tunnel?
………light at the end of the tunnel? Demand augmentation: Peak demand surge – 13GW in 7MFY19 over FY18 - probably the highest ever SAUBHAGYA will likely result in 8-10% peak demand increase, and 3-5% base demand increase initially Load shedding reduction contributed >60bps to FY18 power demand g
Slide 5: Tata Power
Tata Power …Message Box ( Arial, Font size 18 Bold) 5
Slide 6: Consolidated 11 GW portfolio with 30% in clean, non-fossil power
Consolidated 11 GW portfolio with 30% in clean, non-fossil power CONVENTIONAL GENERATION (EX – CGPL) TRASNSMISSION & DISTRIBUTION ASSURED RETURNS MERCHANT REGULATED – TRANS. REGULATED – DISTRN. MW MW CKM Mln Cust Regulated 2,855 Merchant + Short 246 Mumbai 1,188 Distrib. License 2.4 term PPA Fixed R
Slide 7: Robust business fundamentals
Robust business fundamentals All figs in Rs Crores * Before exceptional items Despite pressures from under-recovery in CGPL, robust underlying EBITDA growing by ~ 30% in last 3 yrs. …Message Box ( Arial, Font size 18 Bold) 7
Slide 8: Conventional Generation – A steady warhorse
Conventional Generation – A steady warhorse Plant MW Remarks Reg Equity Before Eliminations All figs in Rs crs MO Thermal 930 100% Regulated with 5 yr Rs 1,803 crs PPA (BEST & TPC-D) MO Hydro 477 Jojobera 428 100% regulated Rs 284 crs Maithon 1,050 74% JV; 100% regulated Rs 1,582 crs IEL (Captive) 3
Slide 9: Conventional Generation – Value Drivers
Conventional Generation – Value Drivers Existing Business • RCM, Digitalization & Artificial Improve Cost Giving Consistent Intelligence push improving Returns availability & generating savings Competitiveness • 24 GW of stressed assets with almost 10 GW with FSA/PPA etc. Growth Growth in Stressed •
Slide 10: T & D – opportunities to leverage experience
T & D – opportunities to leverage experience Before Eliminations All figs in Rs Crs Transmission CKM Reg Equity Mumbai 1,188 Rs 1,164 crs Powerlinks 2,328 Rs 468 crs Total 3,516 Rs 1,632 crs Distribution Mln Cust Reg Equity Mumbai License 0.7 Rs 830 crs Delhi License 1.7 Rs 1,371 crs Ajmer DF 0.1 N/
Slide 11: T&D – Value Drivers
T&D – Value Drivers Existing Business • Digitalization, AI & IOT Driven customer interactions Stable return Giving Consistent Returns • Innovative & customised portfolio solutions • Several License as well as DF opportunities • Expertise of turning around Distn & Huge Growth seamless integration Gro
Slide 12: Renewable Developer Business: Overview
Renewable Developer Business: Overview Renewable Developer Company Overview Tata Power is 6th largest Renewable energy player in India with a portfolio of 2,064 MW (Tata Power assets, TPREL & Walwhan) operational and 500 MW under construction in India and 230 MW operational in South Africa Balance
Slide 13: A well diversified Renewable Portfolio
A well diversified Renewable Portfolio Solar 1295 MW Wind 931 MW State wise installed capacity State GJ RJ MP MH AP TS KN PB TN UP BH Total Solar 100.0 66.0 130.0 128.0 205.0 15.0 314.0 36.0 249.0 1.0 40.0 1284.0 Wind 193.6 185.0 44.0 238.6 100.0 0.0 50.4 0.0 120.0 0.0 0.0 931.6 Total 293.6 251.0 17
Slide 14: Solar EPC Business
Solar EPC Business Cell Module In-House Manufacturing of Solar Cells and Modules Over 1GW modules shipped globally 300 400 MW MW Rated as Tier-1 bankable manufacturer by several rating agencies such as GTM, BNEF Highly automated manufacturing lines ensuring best quality product Manufacturing C
Slide 15: Integrated Renewables Business Financials
Integrated Renewables Business Financials All figs in Rs crs * FY 17 financials for Walwhan is from Sept 16 Robust EBIDTA growth generating significant cash for incremental capacity addition …Message Box ( Arial, Font size 18 Bold) 15
Slide 16: CGPL, Coal & Shipping Companies
CGPL, Coal & Shipping Companies: All figs in Rs crs • Sharp rupee depreciation & increased coal prices widened CGPL losses. • Coal blending increased to reduce the losses by securing higher discount to market prices • DMO obligations have put the natural hedge under stress. • However, Company refina
Slide 17: Growth strategy
Growth strategy …Message Box ( Arial, Font size 18 Bold) 17
Slide 18: 3S Strategy to achieve leadership and sustainability
3S Strategy to achieve leadership and sustainability 1 2 3 Simplify Synergize Scale/Stretch • Reorganized businesses • Aligning with initiatives in • Achievement of scale in internally to drive new / emerging business focus businesses focused operation & areas at the Group level growth for maximum b
Slide 19: Calibrated Growth Model
Key Themes Calibrated Growth Model VALUE Deleveraging Balance Sheet DRIVERS CGPL Resolution …Message Box ( Arial, Font size 18 Bold) 19
Slide 20: Calibrated Growth Model
Calibrated Growth Model Renewable Value Added Asset Light Model Growth Business …Message Box ( Arial, Font size 18 Bold) 20
Slide 21: Building capability for the future
Building capability for the future • Steady businesses generating Rs 10,000 crores (~USD 1.5 Billion) operational cash flow every year. • Our refinancing capabilities have helped to achieve sustenance of debt service providing more time for resolution of CGPL under-recovery. • Current cash flows can
Slide 22: Robust Renewable Growth Strategy
Robust Renewable Growth Strategy Non-Fossil based capacities to be 40%- 50% of the total portfolio 500 MW of projects in pipeline, further bids being pursued Adequate potential capacity still available to be tapped Growth plans to be pursued with a cautious approach; capability to tap inorganic oppo
Slide 23: Renewables sector outlook- more opportunities for growth
Renewables sector outlook- more opportunities for growth Solar Wind 750 GW 102 GW Solar Tariff (Rs/unit) 5.3 4.6 4.3 4.4 4.4 3.3 3.5 Small Hydro Bio-Energy 2.9 2.7 2.5 20 GW 25 GW 2.4 Apr Jun Oct Jan Jul Oct May Jul Sept Dec Feb 15 15 15 16 16 16 17 17 17 17 18 • India has a target of 175GW by 2022
Slide 24: Tata Power Renewable's competitive edge
Tata Power Renewable’s competitive edge EPC cost / Module Pricing Engineering optimisations in own manufacturing / EPC, Long term tie up for module procurement, Better quality monitoring in procurement being a manufacturer Low financing cost and ability to raise long term funds Demonstra
Slide 25: Leveraging Platform Structure – Resurgent Power
Leveraging Platform Structure – Resurgent Power Platform incorporated with USD 830 M Five to six commitment from Prayaagraj Power generating assets, To acquire following Generation Tata Power will shortlisted and Thermal, Hydel sponsors / Company Limited provide strategic, being evaluated; and Inves
Slide 26: Future trends – Shift to Integrated Solutions
Future trends – Shift to Integrated Solutions Transformation phase in sector to offer new opportunities …Message Box ( Arial, Font size 18 Bold) 26
Slide 27: Opportunities ahead
Opportunities ahead Tata Power is fully geared to capitalize on opportunities in Value Added Distribution …Message Services as well as incubate Box ( Arial, innovative projects Font such as size 18 Storage Bold) & Micro-Grid 27
Slide 28: Distribution – Grid level opportunities
Distribution – Grid level opportunities Although the debt has reduced in all cases, but most states have been unable to reduce AT&C Current State: losses as well as ACS-ARR gap ACS-ARR Gap: 29p/kWh as per the yearly targets. AT&C Loss: 21.8% The full impact of transfer of loans and losses on State G
Slide 29: Distribution – Microgrid opportunities
Distribution – Microgrid opportunities The Need MICRO GRID The Solution • Packaged solution “Utility In • Only a small fraction of rural a Box” with solar, storage households (10%) electrified and biomass • Over 3.5 crore households in India are yet to be electrified • Development of low cost and hi
Slide 30: Key Focus Areas for growth
Key Focus Areas for growth EV Charging Home Automation and Storage and Smart Homes Smart meters Transmission & Distribution and cities Distributed Generation: Renewable LED Lighting Generation and Rooftops …Message Box ( Arial, Font size 18 Bold) 30
Slide 31: Deleveraging the Balance Sheet
Deleveraging the Balance Sheet Monetization of Non-Core Assets Targeted Leverage …Message Box ( Arial, Font size 18 Bold) 31
Slide 32: Monetization of non-core investments
Monetization of non-core investments Sold holdings in IEX (Rs 199 crs) & Tata Comm (Rs 2,150 crs) Realized USD 160 M out of USD 400 M from Arutmin Sale Sale of Defense business under regulatory approvals – Rs 1,050 crs to be received on approvals and RS 1180 crs on contract realization Tata Projects
Slide 33: De-leveraging the Balance Sheet
De-leveraging the Balance Sheet All figs in Rs crs PARTICULARS STANDALONE CONSOLIDATED Rupee Forex Total Rupee Forex Total Long term 8,338 - 8,338 22,722 3,782 26,504 Short term 6,942 19 6,961 14,275 2,604 16,879 Current Maturity of LT 1,758 - 1,758 3,427 81 3,508 Total Debt 17,038 19 17,057 40,424
Slide 34: Targeted Leverage
Targeted Leverage STANDALONE D/E CONSO D/E 2.72 2.66 0.87 0.87 2.28 0.65 FY17 FY18 MONETIZATION OF NON- FY17 FY18 POST MONETIZATION CORE OF NON-CORE STANDALONE NET DEBT/EBITDA C O N S O N E T D E B T/ E B I TD A 7.57 7.36 6.81 4.40 5.28 5.02 3.96 FY1 7 FY18 POST P OST M O N E T I Z A T I ON M O N E
Slide 35: Resolution of CGPL under-recovery
Resolution of CGPL under-recovery Compensatory Tariff Coal Hedging Coal Blending Other Initiatives …Message Box ( Arial, Font size 18 Bold) 35
Slide 36: CGPL – High Powered Committee report on Compensatory Tariff
CGPL – High Powered Committee report on Compensatory Tariff Gujarat Government initiated a High Powered Committee Report to find out solutions for the imported coal based power projects. HPC took inputs from earlier reports and engaged with all stakeholders and made various recommendations on 3rd
Slide 37: Natural hedge between Mundra & Coal Cos
Natural hedge between Mundra & Coal Cos Fig in Rs crs Generation at Mundra Natural hedge has 9 Month 9 Month worked in favor till FY CGPL FY 18 FY 17 FY19 FY18 18 Revenue 5,094 4,556 6,419 6,109 Lower prices due to EBITDA (117) 150 16 552 slow Chinese demand PAT (1,363) (871) (1,408) (855) and t
Slide 38: Blending to reduce landed costs
Blending to reduce landed costs Optimizing Coal Blending to reduce Under-recovery CGPL is firing different Off Spec Coal to reduce the fuel cost CGPL has significantly changed the coal blend mix to reduce the coal cost Sale of additional Power beyond 80% CGPL is in discussion with Procurers to sell
Slide 39: Other Initiatives
Other Initiatives Around 2-3 MMT of coal being procured at the discounts Competitive Coal Procurement ranging from 5% to 8% on sustainable basis Exploration of Russian mine underway with a no-go decision Alternate Sourcing of Coal in next 12-15 months. This can supply 8 MTPA of coal at cost plus bas
Slide 40: Key take away
Key take away An Integrated player across the value chain, well positioned to withstand sectoral challenges and capitalize on opportunities Underlying business performance robust with regulated conventional and good renewable assets Thrust on renewable growth (without compromising on returns) Shift
Slide 41: Thank You!
Disclaimer: The contents of this presentation are private & confidential. Please do not duplicate, circulate or distribute without prior permission. Thank You! Website: www.tatapower.com Email Id: rahuls@tatapower.com Contact: +91 (0) 22 6717 1305 Private and Confidential | …Message Box ( Arial, Fon
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