CEOInterviews.AIFuture of NTPC Green Energy: Premium, Plans, and Growth | Exclusive Interview Jayakumar Srinivasan

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Host0:04

Let's discuss Views on News. Today another company listed is NTPC Green Energy. We will talk about their plans and outlook. Joining us is the Director Finance, Jaikumar Srinivasan. Welcome, sir. The listing happened today, opening at around 6-7% up and now showing strength at 12-13%. The company was established in April 2022 as a wholly owned subsidiary of NTPC. In February 2023, NTPC transferred 15 renewable energy assets to the company. By September 2024, it became the largest renewable energy PSU in the country (excluding hydro). Their business is in solar and wind power generation. Mr. Srinivasan is an associate member of the Institute of Cost and Works Accountants of India, has a B.Com from Nagpur University, and has over 17 years of experience in the power sector. Congratulations on the good listing. We want to know your outlook for the next 3-5 years: what will be your focus and growth areas?

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Jaikumar Srinivasan1:37

Thank you very much. First of all, through your channel, I want to thank all investors, especially our retail investors and existing shareholders of NTPC who have appreciated and responded positively even in the current market conditions. As far as our plans are concerned, our listing has gone well and our growth plans are very ambitious. We have a target of 60 GW by 2032. Currently, our operational capacity is 3.3 GW. About 13 GW is under construction, and another 9 GW is in the pipeline, totaling around 26 GW of capacity we are working on. In the current year, we will commission 3 GW, next year the target is 5 GW, and thereafter we aim for an average of 7-8 GW per year. Thus we aim to reach 60 GW by financial year 2032, and we are confident we will achieve it even before that. We are tying up resources and funds. There are also large capacity expansion plans.

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Host3:30

Sir, we would like to understand how this capacity expansion will reflect in revenue. If we talk about the next one to two years, how do you see revenue growth from here?

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Jaikumar Srinivasan3:44

Look at revenue growth: if we look back two years, our capacity has increased 2.3 times, and our operational revenue has grown more than 40% annually. Profitability has also increased significantly by 80-90%. Basically, in the renewable business, we are getting an EBITDA margin of about 65 lakh per MW, and our EBITDA margin is very healthy at 86-87%. So with these capacity addition plans, we will see steep growth in revenue and profitability. As I said, with 3 GW this year and 5 GW next year, we will reach around 19 GW by 2027. With this margin, our PAT margin is also good, around 17% in the first half of the financial year. We can expect similar growth in revenue and profitability.

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Host4:54

Sir, tell me your current capacity in solar and wind segments. How much is it, and how much do you plan to expand it in the next two financial years?

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Jaikumar Srinivasan5:10

Our operational capacity today is 3.32 GW, predominantly from solar energy. However, in our upcoming under-construction plants, the ratio will be about 80% from solar projects and 20% from wind projects. There will also be storage plans.

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Host5:40

Sir, we were looking at your operating performance: margins have been in the range of 87-90% for the last three years. Going forward, do you see these same levels or some improvement? What is your outlook?

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Jaikumar Srinivasan6:02

Operating margins will improve from here. As more capacities come in, economies of scale will operate, our O&M costs will reduce. Also, the company was established only two years ago and has already received the best rating – Triple A – in two years. The company is able to raise finance at the cheapest rates, similar to what NTPC has been getting for years. So with cheap finance opportunities and our management team's experience of decades in project implementation, combining all, our profit margin will increase further.

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Host6:57

One last question: We saw that the company's cash flows have been quite good in the last three years. What is your planning to ensure they remain strong?

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Jaikumar Srinivasan7:12

Sir, from a cash flow perspective, as I said, our treasury management will improve further. Already our cost of finance is 150-200 basis points lower compared to others. Going forward, we will raise loans at very cheap rates from foreign financial institutions that are inclined towards green projects, and this will further improve our operational financial margin.

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Host7:51

Thank you so much for taking time to join us today. Once again, congratulations on the good listing of NTPC Green Energy. We hope we will get a chance to talk to you again and discuss the company's performance further. Thank you so much for joining us.

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Jaikumar Srinivasan8:10

Yes, thank you very much, thank you very much, thank you sir.

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Host8:16

So NTPC Green Energy has been listed. You heard from the management about the kind of plans going forward.