GIPCL - Guj Inds. Power

📊 NSE: GIPCL 🏢 Power Generation And Supply 📅 Last Updated: 12/13/2025 22:40

💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) was INR 1,349 Cr in FY24, a marginal decline of 0.5% from INR 1,356 Cr in FY23 due to lower tariff realizations following a decrease in fuel prices. Lignite-based thermal power remains the primary revenue driver, while renewable capacity (374.40 MW) provides stable revenue through compulsory off-take agreements.

Geographic Revenue Split

100% of revenue is generated within India, specifically in Gujarat, as the company is a state-promoted entity serving Gujarat-based PSUs and the state grid.

Profitability Margins

Profitability has remained stable; PAT margin improved from 13.90% in FY23 to 15% in FY24 and further to 17% in FY25. This stability is driven by the cost-plus tariff structure in PPAs which ensures a 13.5% ROE on lignite plants, though actual ROE has historically been lower due to fixed cost under-recovery.

EBITDA Margin

EBITDA margin stood at 29% in FY24 (INR 381 Cr) compared to 30% in FY23 (INR 408 Cr). In Q1FY25, the margin improved significantly to 36% (INR 116 Cr) due to better Plant Availability Factors (PAF) and Plant Load Factors (PLF) at lignite-based facilities.

Capital Expenditure

Planned CapEx includes INR 1,353 Cr for developing a 2,375 MW solar park at Khavda and approximately INR 5,105 Cr for 1,100 MW of solar power projects. The solar park is funded via 30% MNRE subsidy, 40% user charges, and 30% internal accruals; solar projects are funded at an 80:20 debt-to-equity ratio.

Credit Rating & Borrowing

GIPCL maintains a strong credit profile with an overall gearing of 0.19x as of FY24. Interest coverage was 10.86x in FY23. Borrowing costs are minimized through low leverage and strong parentage from GUVNL, GACL, and GSFC (all rated CARE AA+ or AA).

⚙️ Operational Drivers

Raw Materials

Lignite (approx. 3 MMT consumed in FY25) and Natural Gas (for 310 MW capacity). Lignite is the primary fuel for the 500 MW SLPP plants.

Import Sources

Lignite is sourced locally from captive mines in Gujarat. Natural gas is sourced through Administered Price Mechanism (APM) and spot market purchases.

Key Suppliers

Captive mines provide lignite; natural gas is sourced from various domestic suppliers under APM and spot tie-ups.

Capacity Expansion

Current installed capacity is 1,184.40 MW (Thermal: 810 MW, Solar: 262 MW, Wind: 112.40 MW). Planned expansion includes doubling capacity by adding 1,175 MW of solar power by December 2026.

Raw Material Costs

Fuel costs are a pass-through in the cost-plus tariff model for thermal plants. Lignite costs are stabilized by captive mining, while gas-based plants (310 MW) remained non-operational in FY24/Q1FY25 due to high natural gas prices making them unviable.

Manufacturing Efficiency

Lignite plants target an assured 13.5% ROE. Efficiency is measured by PAF and PLF, which showed improvement in Q1FY25, driving the 36% EBITDA margin.

Logistics & Distribution

Power is distributed through the state grid with GUVNL as the primary counterparty, minimizing distribution-related credit risks.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

The company plans to double its operational capacity from 1,184 MW to over 2,350 MW by 2026. This will be achieved through the development of a 2,375 MW solar park in Khavda, with GIPCL developing 1,175 MW for itself and sub-letting the remainder. Strategic MoUs with NHPC and IOCL for renewable solutions and exploration of pumped storage and offshore wind projects further support this CAGR.

Products & Services

Electrical power generated from lignite, natural gas, solar radiation, and wind energy.

Brand Portfolio

GIPCL (Gujarat Industries Power Company Limited).

New Products/Services

Expansion into green hydrogen and renewable energy solutions through MoUs with NHPC and IOCL; 600 MW of new solar capacity expected by September 2025.

Market Expansion

Focusing on the Khavda region in Kutch for massive solar expansion and exploring group captive modes for C&I customers.

Market Share & Ranking

A major power generation player in Gujarat; specific state-wide market share percentage not disclosed.

Strategic Alliances

MoUs signed with NHPC Ltd. and Indian Oil Corporation Limited (IOCL) for joint exploration of renewable energy solutions.

🌍 External Factors

Industry Trends

The industry is shifting toward renewables; GIPCL is positioning itself to double capacity with a focus on solar and wind to align with state and central government green energy objectives.

Competitive Landscape

Competes with other state and central power utilities, but protected by long-term PPAs with promoter-group off-takers.

Competitive Moat

Moat is derived from strong state parentage (Gujarat Govt PSUs), captive lignite mines ensuring fuel security, and long-term PPAs that guarantee fixed cost recovery. These are highly sustainable due to the strategic importance of GIPCL to Gujarat's power sector.

Macro Economic Sensitivity

Highly sensitive to fuel price volatility (Gas/Coal) and interest rate changes for the INR 5,105 Cr project debt.

Consumer Behavior

Increasing demand for green energy from C&I customers is driving the shift toward renewable group captive models.

Geopolitical Risks

Geopolitical disruptions near project sites previously delayed the first 100 MW of solar commissioning.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by CERC/GERC regulations, pollution norms for thermal plants, and MNRE guidelines for solar park development.

Environmental Compliance

The company is mitigating environmental risks by transitioning to a renewable-heavy portfolio and selling fly ash to the real estate sector for green cement.