NHPC Limited Q4 FY24 Earnings Conference Call Insights

Key highlights from NHPC Limited (NHPC) Q4 FY24 Earnings Concall

• Load Factor
  • Generation in FY24 was 21,773 million units, 12% lower than FY23.
  • Plant Availability Factor (PAF) in FY24 was 77.6%, lower by 11% compared to FY23.
  • Q4 FY24 generation was 2,304 million units, 20% lower than Q4 FY23.
• Financial Performance
  • Revenue from operations in FY24 was Rs. 8,405 crore, 10% lower than FY23 due to lower generation.
  • Other income in FY24 was Rs. 1,624 crore, 94% higher than FY23.
  • Other income in Q4 FY24 was Rs. 591 crore, 133% higher than Q4 FY23.
  • Net profit increased by Rs. 129 crore or 26% to Rs. 698 crore in Q4 FY24 from Rs. 569 crore in the previous year.
  • Capex for FY24 was Rs. 8,652 crore against a target of Rs. 10,857 crore.
• Expenses
  • Generation expenses decreased from Rs. 936 crore in FY23 to Rs. 814 crore in FY24 due to lower generation and reversal of water cess earlier levied.
  • Employee cost remained almost flat, decreasing marginally from Rs. 1,300 crore in FY23 to Rs. 1,297 crore in FY24.
  • Finance cost decreased from Rs. 476 crore in FY23 to Rs. 425 crore in FY24 due to changes in interest rates and loan requirements.
  • Depreciation and amortization expenses decreased from Rs. 1,145 crore in FY23 to Rs. 1,111 crore in FY24.
  • Other expenses increased from Rs. 1,708 crore in FY23 to Rs. 2,316 crore in FY24.
• Receivables Position
  • Trade receivables stood at Rs. 3,984 crore as of March 31, 2024, including Rs. 2,264 crore in unbilled revenue.
  • Net billed receivables were Rs. 1,721 crore after adjusting for unbilled revenue and discounted bills.
  • Net amount due as of March 31, 2024, was only Rs. 818 crore, with more than 45 days dues at Rs. 277 crore.
• Project Updates
  • Subansiri Lower project: 3 units expected to be commissioned by March 2025, remaining by May 2026. Estimated cost: Rs. 21,248 crore, incurred: Rs. 20,834 crore.
  • Uri-II project: Targeted completion by December 2024. Estimated cost: Rs. 12,164 crore, incurred: Rs. 11,127 crore.
  • Dibang Multipurpose project: Major contracts awarded, estimated cost: Rs. 31,876 crore, incurred: Rs. 2,307 crore.
  • Updates provided on Teesta VI, Bangalore, HEP, Pakal Dul, and other projects under construction.
• Renewable Energy
  • 1,000 MW solar project progressing well, land acquisition ongoing for 700 MW capacity.
  • Received letter of intent for 200 MW solar project in Gujarat at Rs. 2.66/unit tariff.
  • Exploring pumped storage solar projects with indicative capacity of 20,000 MW across multiple states.
• Project Delays
  • Subansiri project delayed due to subsidence in diversion tunnel 1 and hill slope slide on Left bank.
  • Major portion of restoration works completed, but hill slope restoration ongoing.
  • Diversion tunnel 1 seepage reduced from 8-9 cumecs to less than 1 cumec.
  • Remaining diversion tunnel 1 plug work to be done after monsoon season.
  • Parbati 2 project delayed due to excavation issues, now completed.
• Capital Expenditure
  • FY25 capex target Rs. 11,761 crore, excluding pump storage projects.
  • Breakup: Subansiri, Rs. 450 cr; Deban, Rs. 950 cr; new projects, Rs. 950 cr; solar, Rs. 1,623 cr.
  • Chenab Valley projects (Pakal Dul, Kiru, Kawar) – Rs. 3,370 cr.
  • Other projects: BSUL solar, Rs. 1,550 cr; Sikkim hydro, Rs. 1,198 cr; Rangit-IV, Rs. 464 cr; Ratle, Rs. 954 cr.
  • FY26 capex plan around Rs. 13,317 crore.
• Cash Flows
  • Strong cash flows to meet 30% equity portion of capex from internal accruals.
  • PBDIT around Rs. 3,800 cr, depreciation Rs. 1,600 cr – cash accruals Rs. 5,400 cr.
  • After dividends, around Rs. 3,600 cr available annually for equity capex.
• Floating Solar Power
  • Signed MoU with Norway’s Ocean Sun to identify water bodies for floating solar projects.
  • Currently executing 88 MW floating solar at Omkareshwar reservoir.
  • Exploring 300 MW floating solar at Rengali, Odisha – re-tendering after earlier bid attracted only 20 MW.
• Pump Storage Projects
  • NHPC plans 20,000 MW pump storage capacity over next 10 years.
  • Work to start in 2 years on 5,000-6,000 MW pump storage projects.
  • These projects targeted for commissioning by FY2030.
• Subansiri Commissioning
  • 3 units to be commissioned together in March 2025 after completing civil/hydro-mechanical works.
  • Remaining 5 units to be commissioned one by one by May 2026.
  • No possibility of commissioning 1-2 units earlier than March 2025.
• Bursar Storage Project
  • DPR prepared in 2008, declared national project by Ministry of Water Resources.
  • Viable only if government provides grant for storage component, else tariff very high at Rs. 25-30/unit.
  • NHPC to develop if government rethinks and directs, given strategic importance of storage projects.
• Dibang Project Status
  • Construction of roads, bridges, railroads by L&T (Package 1) ongoing.
  • Power house and tunnel works by Patel-GR Infra JV (Package 2) in progress.
  • NHPC getting ready to tender main concrete dam package.
  • All land acquisition complete.
• EPC Tender Awards
  • NHPC preparing to award EPC tenders for Sawalkot and Dugar projects simultaneously.
  • Sawalkot tender subject to approval from J&K government and Ministry of Power.
  • Dugar tender contingent on court verdict and Himachal Pradesh granting agreed concessions.
  • Both projects likely to be awarded under single EPC package.
• Solar Project Timelines
  • 88 MW Omkareshwar floating solar project awarded to Tata Power, commissioning by Oct 2024.
  • 300 MW Rengali project under tendering, targeted commissioning in FY 2026-27.