(FE)
Renewable energy is going to be in focus as power companies gear up to report the fourth quarter results, according to analysts.
During the quarter, the nationwide capacity addition saw a pick-up, with January and February seeing 8.4 GW of new total capacity, primarily in renewable energy, compared to 20 GW addition in nine months of FY25, Kotak Institutional Equities said.
Electricity demand in Q4 stood at ~417 billion units (BUs) , over 4% higher on a yearly basis, with the peak power demand increasing to 238 GW, over 6% higher from a year ago.
Key drivers of earnings growth include growth in regulated equity from capacity expansion, new transmission line addition, improved hydro generation, sustained volume growth in the short-term market and contribution from solar engineering, procurement and construction (EPC), and rooftop installations, Elara Securities said.
Tata Power’s earnings from the renewable portfolio will benefit from the higher capacity base and strong execution at Tata Power Solar. Kotak expects contained losses at Mundra thermal plant, as the plant was operating under the cost-plus tariff model during the quarter.
For JSW Energy, the brokerage expects generation of 7.4 BU in Q4, up 16% y-o-y due to contribution from Ind-Barath Power Infra & the new renewable assets and the recently acquired 1,800 MW KSK Mahanadi Power Company capacity. JSW Energy recently acquired the 4.7-GW O2 Power platform from EQT and Temasek, which is expected to help it achieve the 20-GW generation goal earlier than planned.
For wind turbine marker Suzlon, which was added by Motilal Oswal to its model portfolio, execution is set to rise from 710 MW in FY24 to 1.4 GW in FY25 (977 MW done in 9M FY25) and 2.5 GW/3.4 GW in FY26/FY27, the brokerage said.
On the profit front, the power companies are expected to see modest or lower growth in Q4 but are expected to see strong revenuegrowth.
According to Bloomberg poll of analysts, Tata Power is expected post profit of Rs 872 crore , about 3% lower than Q4 FY24. It is expected to post revenues of Rs 18,946 crore, a y-o-y growth of 20%.
JSW Energy’s profit is estimated at Rs 288 crore , a decline of 18% while revenue at Rs 3,549 crore will be a growth 29% y-o-y.
For NTPC, Kotak Expects weak generation (-2% y-o-y) owing to modest demand trends and modest PAT growth (over 6% y-o-y), reflecting limited capacity addition during the current financial year.
Analysts expect Suzlon to post a profit of Rs 467 crore in Q4, with a growth of 84% y-o-y. The company is expected to post revenue of Rs 3,709 crore , a growth of 70%.
