Tata Power Company Limited · NSE:TATAPOWER
Tata Power — The Tata Power Company — Investor Presentation (February 2019)
62 slides from Tata Power's investor presentation, February 2019
Slide 1: Investor Presentation Feb 2019
` Presentation The Tata PowerTitleCompany Limited ( Arial, Font size 28 ) Investor Presentation ..( Arial, Font size Date, Venue, etc 18 ) Feb 2019 …Message Box ( Arial, Font size 18 Bold)
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: Index
Index …Message Box ( Arial, Font size 18 Bold) 2
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Slide 5: India Generation Capacity – current status
India Generation Capacity– current status India Installed Capacity (GW) Nuclear, 6.8, 2% Diesel, 0.8, 0% 344 Gas, 24.9, 7% 326 301 272 246 Renewable, 69.0, 20% 223 Coal, 197.2, 58% Hydro, 45.3, 13% FY13 FY14 FY15 FY16 FY17 FY18 Coal Oil & Gas Nuclear Hydro Wind Solar Other RE Total Generation Capaci
Slide 6: Capacity – addition trend and break-up
Capacity – addition trend and break-up Coal capacity addition slowed in last 2 years Renewable capacity addition driven by private 25 15 capex 13 20 11 15 9 (GW) (GW) 7 10 5 5 3 1 - (1) FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 (5) (3) State
Slide 7: Co-relation between growth in Economy and Energy Demand
Co-relation between growth in Economy and Energy Demand Indian Economy - GDP Growth (%) Energy Demand (%) 9 9.0 8.4 7.9 8 7.2 8.0 7.1 7 6.5 6.7 7.0 6.0 6.1 6 5.5 6.0 5.6 5 5.0 4.7 4.0 % % 4 4.0 3 3.0 2 2.0 1 1.0 0 0.0 FY13 FY14 FY15 FY16 FY17 FY18 FY13 FY14 FY15 FY16 FY17 FY18 GDP Demand Growth Whil
Slide 8: Power demand growth expected to outpace GDP growth in FY19
Power demand growth expected to outpace GDP growth in FY19 12 Power demand growth GDP Growth 10 8 6 (%) 4 2 0 FY19E FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 CEA’s Load Generation Balance Report, 2018 expects power de
Slide 9: Thermal PLF trend showing signs of recovery
Thermal PLF trend showing signs of recovery Trend of thermal power plant PLFs 85.5 85.1 83.9 82.1 80.7 79.2 76.1 73.96 72.52 71.98 72.35 69.5 Central 70.9 65.6 State 68 62.1 66.7 60.58 60.49 Private 64.1 55.73 55.32 59.1 59.83 56.83 55.41 54.35 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Capacity g
Slide 10: India's Energy Deficit & Peak Deficit have narrowed in FY18
India’s Energy Deficit & Peak Deficit have narrowed in FY18….. Electricity demand and supply (Billion Units) Peak Demand and Supply (in GW) 1,400 12 180 164 12 1,212 160 153 1,031 1,114 1,143 160 1,200 7 141 161 7 1,204 140 157 1,000 1,135 148 1,091 Domestic Power Sector 120 148 2 1,069 2 800 100 BU
Slide 11: But, are we really power surplus?
…. But, are we really power surplus ? UP, Punjab and Telangana are expected to face Most major states reported higher than significant peak shortages in FY19 anticipated peak demand in Q1FY19 (MW) Peak Peak Peak (MW) Peak Q1FY19 - Q1FY19 - Demand Supply Surplus/(D Surplus/(D Actual LGBR eficit) efic
Slide 12: Sharp surge in exchange power prices
….As highlighted by the sharp surge in exchange power prices 5.0 Monthly exchange Price (Rs/kWhr) 5yr-average exchange price (Rs/kWhr) 4.5 4.0 Domestic Power Sector 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Sep-13 Nov-13 Jan-14 Sep-14 Nov-14 Jan-15 Sep-15 Nov-15 Jan-16 Sep-1
Slide 13: Estimated Demand growth projections
Estimated Demand growth projections There has been a larger contribution of agricultural and services sector in last few years GDP growth than manufacturing Actual demand growth has trailed projections leading to significant over capacity Source: Govt Websites …Message Box ( Arial, Font size 18 Bold
Slide 14: Lower Demand Growth – a major cause for stressed assets
Lower Demand Growth – a major cause for stressed assets Installed capacity (344 GW) is more than twice the peak demand (164 GW) resulting in low utilization Source: Govt Websites 13 …Message Box ( Arial, Font size 18 Bold)
Slide 15: AT&C loss reduction trajectory projection under UDAY
AT&C loss reduction trajectory projection under UDAY AT&C loss reduction trajectory of states that have signed up for UDAY vs. reported AT&C as on Dec’17 State Act FY15 Proj FY16 Proj FY17 Act Dec’17 Proj FY18 Proj FY19 Proj FY20 Chhattisgarh 22.5% 21.0% 18.9% 29.9% 18.0% 15.0% NA Gujarat 14.6% 14.5
Slide 16: AT&C Losses – India Vs World
AT&C Losses – India Vs World • India’s average AT&C loss is AT&C Loss(%) 21.32% 30.00 25.00 • As per the UDAY scheme, State governments are 20.00 required to reduce these 15.00 losses to 15% by 2018-19 10.00 • Only six States (Himachal 5.00 Pradesh, Andhra Pradesh, Gujarat, Telangana, 0.00 Uttarakha
Slide 17: UDAY – debt takeover successful, all eyes now on operational improvement
UDAY – debt takeover successful, all eyes now on operational improvement Losses continue to mount, albeit a slightly lower pace External borrowings decline on UDAY debt takeover ARR (with subsidy received) ACS Capital Employed External borrowing as % of capital employed Deficit as a % of ARR - RHS 9
Slide 18: SEB losses decline but sticky AT&C losses could prompt discom privatisation
SEB losses decline on debt reduction/re-pricing but sticky AT&C losses could prompt discom privatisation State-wise discom loss trend in Rs bn AT&C losses State FY13 FY14 FY15 FY16 FY17 State AT&C losses (%) Haryana 23.3 Uttar Pradesh (97.8) (167.2) (86.8) (76.9) (66.2) J&K 57.3 Rajasthan (123.5) (1
Slide 19: SHAKTI – Coal for all
SHAKTI – Coal for all Under this scheme, allocation of linkages to power sector are to be awarded to the LOA holders while the other private capacities will have to participate in auctions. Four categories of plants under SHAKTI : 185GW capacity with Thermal plants which valid LOAs but did not 30GW
Slide 20: Saubhagya – details and rationale
Saubhagya – details and rationale Details of SAUBHAGYA – ‒ Government launched ‘Saubhagya’ (Pradhan Mantri Sahaj Bijli Har Ghar Yojna) scheme to electrify all households across the country by 31st March 2019 ‒ The scheme will have a total outlay of Rs163.2bn, of which Rs140.3bn will be earmarked tow
Slide 21: UJALA – mass scale distribution driving energy efficient LED availability
UJALA – mass scale distribution driving energy efficient LED availability Unnat Jyoti by Affordable LEDs for all (UJALA) • Central government launched the UJALA on 1st of May, 2015, with the aim to replace 770mn incandescent bulbs with energy-efficient LED bulbs by 2019 • This is expected to result
Slide 22: Agenda
Agenda 21 …Message Box ( Arial, Font size 18 Bold)
Slide 23: Tata Power - Overview
Tata Power - Overview 100+ years presence in the Indian Power Sector and pioneer with a number of firsts 10,857 MW Gross Capacity with presence across value chain 3,196 MW Non-fossil fuel based power, ~ 30% of total capacity ~ US$ 3 billion Market Cap Largest Integrated Private Power Player 22 …Mess
Slide 24: Integrated Power portfolio
Integrated Power portfolio Power Business Generation Fossil fuel Clean Energy Solar incl EPC, wind Transmission & Coal & Freight Thermal Hydro Distribution logistics • Transmission Assets in Mumbai Diversified yet simplified …Message Box ( Arial, Font size 18 Bold) 23
Slide 25: Tata Power - Snapshot
Tata Power - Snapshot Transmission & Generation MW Clean Energy MW Other Businesses Distribution Domestic 7,661 Mumbai Distribution Domestic Coal mines, Indonesia No. of Consumers Tata Power Standalone 2,030 6.80 TPREL 775 Shipping (Lakhs) Trombay 1,430 MU sales 4,719 WREL 1,010 Tata Power Solar (
Slide 26: Pan India footprint
Pan India footprint Operational: Thermal Hydro Wind Solar Transmission Distribution Domestic MW Total 10327 Thermal 7286 Hydro 447 WHR 375 Wind 932 Solar 1288 10,327 MW of generation across States in India 25 …Message Box ( Arial, Font size 18 Bold)
Slide 27: International Presence
International Presence Hydro Project - Hydro Projects Bhutan - Georgia Distribution Consultancy Logistics Assignment - Nigeria Office - Singapore Hydro Project- Coal Mines Zambia - Indonesia Wind Project – South Africa 530 MW* of operating capacity internationally …Message Box ( Arial, Font size 18
Slide 28: Tata Power – Market position across segments
NTPC 49,663 MahaGenco(Maha 3800 6000 10,842 rashtra) Adani Power 10,440 Tata Power 7,715 8500 DVC 7,090 RRVUNL 5,794 (Rajasthan) Operational 4100 UPRUVNL (UP) 5,778 Reliance Power 5,760 (CKms) GSECL (Gujarat) 5,325 3520 TANGEDCO (TN) 5,179 NLC (Neyveli) 4,240 860 Thermal Generation (MW) 1622 MPPGCL
Slide 29: Key financials Tata Power (Consolidated) – last three years
Key financials Tata Power ( Consolidated)– last three years Revenue (₹ Cr) PAT* (₹ Cr) 29,500 1,800 1,549 28,921 1,600 29,000 1,375 28,526 1,400 28,500 1,200 28,000 1,000 760 27,500 27,287 800 600 27,000 400 26,500 200 26,000 - FY16 FY17 FY18 FY16 FY17 FY18 EBIDTA (₹ Cr) 6,380 6,300 6,219 6,193 6,20
Slide 30: Key financials – last three years
Key financials – last three years Consolidated Net Debt(₹ Cr) 50,000 46,855 46,978 45,000 40,000 37,850 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - FY16 FY17 FY18 Continued focus on the balance sheet deleveraging …Message Box ( Arial, Font size 18 Bold) 29
Slide 31: Agenda
Agenda 30 …Message Box ( Arial, Font size 18 Bold)
Slide 32: Monetization of non-core investments
Monetization of non-core investments Holding in Indian Energy Exchange – Rs 199 Cr Holding in Tata Communications( direct & indirect) – Rs 2150 Cr Strategic Engineering Division – Rs 2230 Cr Other Quoted Investments – ~Rs 150 Cr Tata Projects, Nelito, Tata Ceramics, NELCO- Classified as “ Assets Hel
Slide 33: De-Leveraging the Balance Sheet
De-Leveraging the Balance Sheet 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 6,467 46,891 Less:
Slide 34: Leverage Management- Debt Profile
Leverage Management- Debt Profile 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 OF CORE NON-CORE STANDALONE NET DEBT/EBITDA C O N SO N ET DEBT/ EBITDA 7.57 7.36 6.81 4.40 5.28 5.02 3.96 FY1 7 FY18 POST P OS T M O N E T I Z A T I ON
Slide 35: Agenda
Agenda 34 …Message Box ( Arial, Font size 18 Bold)
Slide 36: Natural hedge between Mundra Generation & Coal Assets
Natural hedge between Mundra Generation & Coal Assets Fig in ₹ Cr Generation at Mundra CGPL FY18 FY17 Variance % Revenue 6,419 6,109 309 5% Incremental EBITDA loss of Rs. 537 Cr EBITDA 16 552 (537) -97% PAT (1,408) (855) (554) 65% Coal mining & Coal Infra Companies Coal & Infrastructure FY18 FY17 Va
Slide 37: Initiatives at CGPL to Optimize the Cost
Initiatives at CGPL to Optimize the Cost 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
Slide 38: CGPL – Cost optimization initiatives
CGPL – Cost optimization initiatives Around 2-3 MMT of coal being procured at the discounts ranging Competitive Coal Procurement from 5% to 8% on sustainable basis Achieved 200 bps reduction in the Interest cost and repayment Lower cost of financing tenure was elongated for Rupee loans. Refinancing
Slide 39: CGPL – High Powered Committee report on underrecovery
CGPL – High Powered Committee report on underrecovery 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 Oct 1
Slide 40: Agenda
Agenda 39 …Message Box ( Arial, Font size 18 Bold)
Slide 41: Unit wise snapshot for Trombay Units
Unit wise snapshot for Trombay Units Parameters U#5 U#6 U#7 U#8 180 MW Capacity 500 MW 500 MW (120 MW GT & 250 MW 80 MW ST) Fuel Imported Coal Oil & Gas CCGT Imported Coal CoD 25.01.1984 23.03.1990 29.07.1993 29.03.2009 Current Operating 33 Years 27 Years 24 Years 8 Years Age Remaining Written off –
Slide 42: TP-Generation Power Tie up with TP-Distribution and BEST
TP-Generation Power Tie up with TP-Distribution and BEST Tata Power – PPAs till 31st DISCOMs Generation March 2024 ~51% Both BEST & TP-D almost equally 1. Share the TP-G capacity incl. Tata Power – Green – Hydro Power Distribution 2. Get power at blended rates. U5 (500 MW) 3. Enjoy competitive peaki
Slide 43: Agenda
Agenda 42 …Message Box ( Arial, Font size 18 Bold)
Slide 44: Future trends – Shift to Integrated Solutions
Future trends – Shift to Integrated Solutions Transformation phase in sector to offer new opportunities 43 …Message Box ( Arial, Font size 18 Bold)
Slide 45: Opportunities ahead
Opportunities ahead Tata Power is fully geared to capitalize on various opportunities in the sector for growth 44 …Message Box ( Arial, Font size 18 Bold)
Slide 46: Distribution – Outlook (1/2)
Distribution – Outlook (1/2) Although the debt has reduced in all cases, but most states have been Current State: ACS-ARR Gap: unable to reduce AT&C losses as well 29p/kWh AT&C Loss: as ACS-ARR gap as per the yearly 21.32% targets The full impact of transfer of loans and losses on State Govt. financ
Slide 47: Distribution – Outlook (2/2) Micro Grid
Distribution – Outlook (2/2) MICRO GRID The Need The Solution • Only a small fraction of rural households (10%) electrified • Packaged solution “Utility In a • Over 3.5 crore households in India Box” with solar, storage and are yet to be electrified biomass • Nearly 80% of rural households in • Deve
Slide 48: Transmission Scenario - India
Transmission Scenario - India Transmission Capacity Addition 149,800 105,900 55,500 107,354 105,580 59,074 11th Plan 12th Plan 13th Plan 2007-12 2012-17 2017-22 Ckm Addition 59,074 107,354 105,580 Investment (Rs crs) 55,500 105,900 149,800 • ~ 80,000 ckms of transmission lines to be added between FY
Slide 49: Key Focus Areas for growth
Key Focus Areas for growth EV Charging Home Automation and Storage and Smart Homes Transmission & Distribution Smart meters and cities Distributed Generation: Renewable LED Lighting Generation and Rooftops 48 …Message Box ( Arial, Font size 18 Bold)
Slide 50: Efforts to Simplify, Synergize, Scale - to achieve growth
Efforts to Simplify, Synergize, Scale - to achieve growth 1 2 3 Simplify Synergize Scale/Stretch • Reorganize the business to • Aligning with initiatives in • Achievement of scale in grow new / emerging business focus businesses areas at the Group level for • Value added businesses maximum business
Slide 51: Agenda
Agenda …Message Box ( Arial, Font size 18 Bold) 50
Slide 52: Renewable Portfolio - Overview
Renewable Portfolio - Overview Company Overview TPREL is the 3rd largest Renewable energy player in India with an operating portfolio of 2,064 MW (including Tata Power assets) with 500 MW under Construction Balanced portfolio with complimentary renewable energy sources and presence across 11 state
Slide 53: Renewable Portfolio – State wise exposure
Renewable Portfolio – State wise exposure Solar 1284 MW Wind 931.6 MW Well diversified portfolio Statewise Capacity ( MW) 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 44.0 238.6the RE 100.0 0.0has grown 50.4 ov
Slide 54: Risks associated with renewable portfolio- Perception vs Reality
Risks associated with renewable portfolio- Perception vs Reality Risk Perception Reality Likely reneging of high tariff PPAs No such precedence, Courts have upheld the legal tenability of PPAs Retrospective withdrawal of “must Government has suggested that such policy run” status changes cannot be a
Slide 55: Renewables sector outlook- more opportunities for growth
Renewables sector outlook- more opportunities for growth Solar Wind Solar Tariff (`/unit) 750 GW 102 GW 5.3 4.6 4.4 4.4 4.3 3.3 3.5 2.9 2.7 2.5 2.4 Small Hydro 20 GW Bio-Energy Apr Jun Oct Jan Jul 16 Oct May Jul 17 Sept Dec Feb 25 GW 15 15 15 16 16 17 17 17 18 Wind Tariff (`/unit) • India has a targ
Slide 56: Tata Power's competitive edge (1/3)
Tata Power’s competitive edge (1/3) Tata Power Solar is India’s No.1 Rooftop EPC Company for the last 4 years as per BTI and is well poised to grow with the fast growing rooftop market in India Executed World’s Largest Rooftop System# 12 MW for RSSB-EES, Punjab Built India’s Largest Car-port Insta
Slide 57: Tata Power's competitive edge (2/3)
Tata Power’s competitive edge (2/3) Cell Module In-House Manufacturing of Solar Cells and Modules 400 300 Over 1GW modules shipped globally Rated as Tier-1 bankable manufacturer by several rating agencies such as GTM, BNEF Highly automated manufacturing lines ensuring best quality product Manu
Slide 58: Tata Power's competitive edge (3/3)
Tata Power’s competitive edge (3/3) 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 demonstrated
Slide 59: Clean Energy Portfolio- key takeaways
Clean Energy Portfolio- key takeaways Non-Fossil based capacities to be 40%- 50% of the total portfolio 500 MW of projects in pipeline, bids being pursued Adequate potential capacity still available to be tapped Growth plans to be pursued with a cautious approach 58 …Message Box ( Arial, Font size 1
Slide 60: Tata Power Platform – Resurgent Power
Tata Power Platform – Resurgent Power Platform incorporated with the following Recently, Prayagraj sponsors / Five to six To acquire Tata Power will Power Generation Investors: generating assets, Thermal, Hydel provide strategic, Company Limited one transmission and Transmission -Tata Power (26%) op
Slide 61: Key take away
Key take away An Integrated player across the value chain, well positioned to withstand sectoral challenges and capitalize on opportunities Deleveraging have been key focus to strengthen the balance sheet, to achieve a D:E ratio and Net Debt to EBITDA which are reasonable Integrated Power (Mundra) a
Slide 62: Investor Relations contact
Website: www.tatapower.com Email ID: investorrelations@tatapower.com Investor Relations Team: S Kasturi / Rahul S Contact : Tel : +91 22 6717 1345 / 1305 …Message Box ( Arial, Font size 18 Bold) 61
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