💰 Financial Performance

Revenue Growth by Segment

Total operating income grew 18.4% YoY to INR 3,071 Cr in FY25, primarily driven by a 25% increase in power generation (10,647 MU vs 8,489 MU). Hydro capacity (65% of total) remains the dominant revenue driver, while renewable energy (Solar/Wind) is the fastest-growing segment following the commissioning of new solar plants.

Geographic Revenue Split

The majority of revenue is generated from Himachal Pradesh and Uttarakhand, where 1,972 MW of hydro capacity is located. Other operational regions include Gujarat (Solar), Maharashtra (Wind), and Uttar Pradesh (Solar), with cross-border revenue from transmission lines to Nepal.

Profitability Margins

EBITDA margin remained stable at 72.3% in FY25 (vs 72.0% in FY24) due to the regulated cost-plus tariff structure. However, PAT margin declined as net profit fell 10% to INR 818 Cr in FY25 from INR 908 Cr in FY24, impacted by higher finance costs and tax expenses.

EBITDA Margin

72.3% in FY25, reflecting a marginal YoY improvement of 30 basis points. Core profitability is protected by CERC norms that allow for full cost recovery and a fixed 15.5% return on equity for hydro and thermal projects.

Capital Expenditure

SJVN plans an annual capital expenditure of INR 10,000 Cr to INR 12,000 Cr over the next few years to fund its 5,091 MW under-construction pipeline. Total debt for capex has reached approximately INR 30,000 Cr.

Credit Rating & Borrowing

Ratings reaffirmed at 'CRISIL AA+/Stable' and 'CARE AA+; Stable'. Borrowing costs are influenced by Navratna status and GoI guarantees (INR 939 Cr for World Bank loans), though finance costs increased by INR 50 Cr in Q2 FY26 due to higher debt levels.

⚙️ Operational Drivers

Raw Materials

Water (for 1,972 MW hydro), Solar radiation (for 700 MW solar), Wind (for 97.6 MW wind), and Coal (for 1,320 MW Buxar thermal). Natural resources represent 0% of direct material cost for RE, while coal costs for thermal are a pass-through.

Import Sources

Raw materials (water, wind, sun) are sourced domestically across Himachal Pradesh, Uttarakhand, Gujarat, and Maharashtra. Coal for the Buxar project is sourced from domestic Indian mines.

Key Suppliers

Not disclosed in available documents, though the company relies on the Ministry of Power for coal linkages and international lenders like the World Bank for project financing.

Capacity Expansion

Current installed capacity is 3,146 MW. Planned expansion includes 5,091 MW under construction (1,558 MW Hydro, 1,320 MW Thermal, 2,213 MW Solar), aiming to nearly triple capacity by FY27-28.

Raw Material Costs

Direct raw material costs are negligible for hydro and RE segments. For the thermal segment, fuel costs are pass-through under CERC regulations, mitigating price volatility risk.

Manufacturing Efficiency

Hydro plants consistently operate above the Normative Annual Plant Availability Factor (NAPAF) and designed energy levels, allowing the company to earn capacity incentives.

Logistics & Distribution

Distribution is managed via a JV-owned 86-km 400 KV transmission line across the Indo-Nepal border, facilitating cross-border power trade.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

Growth will be achieved by commissioning the 5,091 MW under-construction portfolio, monetizing operational assets through an FPO or stake sale in SJVN Green, and participating in the PM-Surya Ghar: Muft Bijli Yojana.

Products & Services

Electricity generated from Hydro, Solar, Wind, and Thermal sources; Power transmission services via cross-border lines.

Brand Portfolio

SJVN (Navratna CPSE).

New Products/Services

Commissioning of the Bikaner Solar Power Project (Unit 1) contributed to a 6.3% YoY improvement in total generation in H1-FY26.

Market Expansion

Expansion into Nepal for cross-border hydropower development and increasing footprint in the Indian solar market to meet the national 500 GW RE target by 2030.

Strategic Alliances

Joint ventures with Power Grid Corporation of India Ltd and IL&FS for transmission infrastructure.

🌍 External Factors

Industry Trends

The industry is shifting toward renewable energy to meet India's 500 GW target by 2030. SJVN is positioning itself by pivoting from pure hydro to a multi-source RE major (Solar/Wind/Hybrid).

Competitive Landscape

Key competitors include other central power utilities like NHPC and NTPC, as well as large private RE players.

Competitive Moat

Durable advantages include Navratna status, 55% GoI ownership providing high financial flexibility, and a cost-plus regulatory moat that guarantees returns on approved capital costs.

Macro Economic Sensitivity

Low sensitivity to market price fluctuations due to the regulated cost-plus model, which ensures recovery of fixed costs regardless of demand volatility.

Consumer Behavior

Increasing national demand for clean and sustainable energy is driving the shift toward SJVN's growing solar and wind portfolio.

Geopolitical Risks

Project execution in Nepal involves cross-border regulatory and political risks, though supported by GoI's strategic objectives.

⚖️ Regulatory & Governance

Industry Regulations

Operations are strictly governed by CERC Tariff Regulations and environmental norms for hydro and thermal plants. Approval of project costs by CERC is critical for investment recovery.

Environmental Compliance

SJVN reduced Scope 1 and 2 emissions intensity by 38% YoY to 1.48 tCO2e/MU in FY24. Compliance costs are integrated into the CERC-approved project costs.

Taxation Policy Impact

Effective tax rate impacted by MAT utilization and the expiry of 80 IEA tax exemptions for certain projects, leading to higher tax expenses in FY26.

⚠️ Risk Analysis

Key Uncertainties

Project execution risk is the primary uncertainty; delays in the 5,091 MW pipeline could lead to cost overruns and deferred revenue, impacting the 1.9x gearing ratio.

Geographic Concentration Risk

High concentration in the Himalayan region (HP/Uttarakhand) for hydro, exposing 65% of capacity to regional hydrological and geological risks.

Third Party Dependencies

High dependency on state DISCOMs for revenue collection and CERC for timely tariff approvals and cost disallowance risks.

Technology Obsolescence Risk

Low risk as SJVN is actively diversifying into Solar and Wind technologies to stay ahead of the transition away from fossil fuels.

Credit & Counterparty Risk

Exposure to weak state DISCOMs is a key monitorable, though mitigated by a healthy cash balance of ~INR 3,000 Cr and government-backed payment security mechanisms.