Vedanta Power Q1 FY27 Earnings Call — Analysis (NSE: VEDPOWER)
Vedanta Power reports turnaround with ₹245 Cr PAT on merchant surge, guides 80%+ PLF and ~25% EBITDA margin for FY27
The take
Q1FY27 Revenue ₹2,607 Cr ( +14% YoY ) . New guidance — FY27 fy27 plf above 80% .
Results
Revenue ₹2,607 Cr +14% YoY; EBITDA ₹571 Cr +80% YoY; EBITDA margin 21.9% (+1,300 bps YoY); PAT ₹245 Cr vs. loss of ₹423 Cr in Q1FY26
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue | ₹2,607 Cr | +14% | yoy · Q1FY27 · vs Q1FY26 |
| EBITDA | ₹571 Cr | +80% | yoy · Q1FY27 · vs Q1FY26 |
| EBITDA Margin | 21.9% | +1,300 bps | yoy · Q1FY27 · vs 8.9% in Q1FY26 |
| Profit After Tax | ₹245 Cr | +₹668 Cr | yoy · Q1FY27 · vs loss of ₹423 Cr in Q1FY26 |
| Plant Load Factor | 68.89% | +9.94 ppts | yoy · Q1FY27 · vs 58.95% in Q1FY26 |
| Average Realization | ₹5.82/kWh | +15% | yoy · Q1FY27 · vs ₹5.06 in Q1FY26 |
| Fuel Cost | ₹1,476 Cr | -13% | yoy · Q1FY27 · vs Q1FY26 |
| Gross Debt | ₹5,447 Cr | +na | point_in_time · Q1FY27 · as of Jun 30, 2026 |
| Net Debt | ₹4,885 Cr | +na | point_in_time · Q1FY27 · as of Jun 30, 2026 |
Guidance
FY27 PLF >80%, EBITDA margin ~25%; Unit-3 660 MW commissioning by Q3 FY28 with no equity dilution
What management committed to
- Vedanta Power expects full-year FY27 Plant Load Factor (PLF) above 80% — above 80%, FY27
- Vedanta Power targets an EBITDA margin of around 25% for FY27 — around 25%, FY27
- TSPL [Unit-3] 660 MW supercritical unit will be commissioned by Q3 FY28 — Q3FY28
- Vedanta Power will add 800 MW of renewable capacity (solar and wind) over the next 3-4 years
Key themes
Merchant-driven margin surge and capacity expansion
Operational commentary
- Merchant sales volume surged to 32.5% of generation (vs 21.4% YoY) driving 60% of EBITDA; merchant realizations up 15% YoY
- Plant availability improved to 75.59% and PLF to 68.89%, supported by sufficient domestic coal linkage (SECL/MCL/ECL) with inventory at 7.5 days
- Unit-3 660 MW supercritical expansion on track for commissioning by Q3 FY28; balance capex ₹1,800 Cr to be funded via internal accruals and project debt, no equity dilution
- 800 MW renewable (solar+wind) target over next 3-4 years with ₹4,000 Cr capex, project-financed; first 200 MW expected by end FY28
- Debtor days rose to ~75 days (from 55 in Q4) due to higher merchant mix; management expects normalization to 45-50 days by Q3 FY27
- NCD refinancing expected at 50-75 bps lower rates; interest coverage ratio stood at 4.5x
- Exploring 1,500 MW pumped storage projects
- Coal linkage sufficient for full-capacity operations; no import dependency
Analyst Q&A
Q. Sustainability of 80% PLF target through FY27 given seasonality and demand patterns in Q2/Q3
We are confident; demand remains robust across quarters, we have sufficient coal linkage and improving availability, and we see advance scheduling for Q2. Government policy and economic activity support 80%+ full-year PLF.
Q. Management of merchant vs PPA mix and sensitivity of EBITDA to merchant prices
We have short-term flexibility up to 35-40% merchant but will maintain 25-30% for FY27. A ₹0.50/kWh change in merchant realization impacts annualized EBITDA by ₹100-110 Cr. Supply constraints and strong discom demand support robust merchant realizations.
Q. Unit-3 capex and expected returns; funding plan
Total project cost ₹5,600 Cr, ₹3,800 Cr already spent, remaining ₹1,800 Cr via internal accruals and tied-up project debt, no equity dilution. Expected IRR 16-18% based on current PPA and merchant assumptions.
Q. Rise in debtor days to 75 days and structural risk given higher merchant share
Increase due to merchant cycle length (30-45 days vs PPA 15-20 days) and quarter-end timing; normalization to 45-50 days expected by Q3 FY27. PPA counterparties paying within 30 days; no significant overdue.
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