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Distribution, renewables biz will contribute 40% each to EBITDA: Tata Power

business | Feb 25, 2022 12:34 PM IST

Distribution, renewables biz will contribute 40% each to EBITDA: Tata Power

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Praveer Sinha, MD & CEO, Tata Power, said that all three of the company's businesses currently contribute equally to EBITDA (earnings before interest, tax, depreciation and amortisation), however going ahead, he expects distribution and renewables to contribute 40 percent each towards EBITDA. He also mentioned that fundraising plans for renewable business are still being finalised.

In an interview to CNBC-TV18, Praveer Sinha, MD & CEO, Tata Power, said that all three of its businesses- generation, transmission and renewables currently contribute equally to its EBITDA (earnings before interest, taxes, depreciation and amortisation). However going ahead, he expects distribution and renewables to contribute 40 percent each towards EBITDA. He also remains buoyant about margin and believes the best is yet to come for the company.

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Sinha said, “Our three businesses – conventional generation business, transmission and distribution, and renewables give virtually an equal amount of contribution to our Rs 9,000 crore of EBITDA.”
"What we are looking at, going forward, is that our EBITDA contribution, both from renewables as well as from transmission and distribution will go up and that will become nearly 40 percent each of our total EBITDA, which also will rise and not remain at the same levels. The existing core business of generation will, of course, continue to do very well and provide the money that is required to be put into these two areas," he explained.
Sharing details, he said that the renewables business is doing well for the company. He mentioned that the solar EPC (engineering, procurement and construction) orderbook, in fact, stands at Rs 10,000 crore. Going ahead, he plans to set up 4 gigawatts of manufacturing facility over the next 18 months.
“We have seen a huge amount of traction in rooftops, solar pumps and also in the EPC business. So we already have an orderbook of Rs 10,000 crore and it should get added as some more orders are expected in this quarter (Q4FY22). Therefore, we are confident that the growth that we have envisaged for ourselves, we will have enough cash with us to fund this growth; I see much better results in the coming quarters,” Sinha said.
On fundraising plans, he clarified that it will be exclusively for the renewables business. He specified that the nature of funding is still under finalisation. “The investment will be exclusively for renewables business, which means we will have, every year, about 2 gigawatts of investment; 2 gigawatt means about Rs 9,000-10,000 crore of investment that we will require,” said Sinha.
On electric vehicles, he shared that the company has tied up with all the big names to provide charging facilities. “We are virtually tied up with all the big names in the automobile whether it’s JLR, Tata Motors, MG, and we are also getting into the two-wheeler space where we have tied up with TVS Motor. We have tied up with oil companies like HPCL, BPCL, IOC,” he said.
“We are also working with many of the other retail outlets where we can provide services. Therefore, the objective is how we enhance our presence in various cities and intercity expressways. Our next program is Kashmir to Kanyakumari and we will be having, at every 150 km, a charging station so that people having electric vehicles can have a seamless travel experience,” added Sinha.
For the entire interview, watch the accompanying video
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