India's power utilities to double down on capex, leverage to peak by FY30: Equirus
New Delhi, July 12
India's power utilities are entering a "different current" of aggressive capacity buildout, said Equirus, in a research report and initiated coverage on the sector, calling for a multi-year capex cycle led by renewables, storage and thermal additions. The brokerage expects balance sheet leverage across private players to rise sharply through FY30 before easing as new assets stabilise.
"Going forward, the capex cycle spanning renewables, Nabha, Raigad PSP and the MP thermal project is expected to materially increase leverage," Equirus noted on Torrent Power. It forecasts net debt to rise from Rs 129 billion in FY26 to Rs 637 billion by FY30, while gross block expands to Rs 954 billion. Consequently, net debt/EBITDA is expected to peak at 4.9x in FY30. Return ratios are likely to stay subdued during execution before recovering.
The growth ambition is broad-based. Equirus highlights Torrent Power's plan to target 10GW of renewable capacity by FY30 alongside an 8.4GW pumped storage pipeline, which "would more than double TORNT's operational platform over the next 5-7 years". Today the utility has ~6.5GW installed and serves over 4.2mn customers across 12 cities.
Private players are mirroring this push. JSW Energy, with 14.5GW operational and 32.1 GW locked in, is "entering the next phase of growth under its Strategy 3.0 roadmap, which seeks to transform the company from a conventional power generator into an integrated energy products and services provider". The roadmap targets 30GW of generation capacity and 40GWh of energy storage by FY30.
That expansion comes with higher gearing. "We forecast net debt/EBITDA to remain in the 6-7x range through FY30, peaking around FY29," Equirus says on JSWEL, as it funds thermal, pumped storage and hybrid projects. Gross block per MW is projected to rise to Rs 63mn/MW by FY30, reflecting more capital-intensive assets.
For state-owned NTPC, the driver remains regulated equity. "Looking ahead, we expect standalone regulated equity to reach Rs. 1,107bn by FY30, driving PAT to Rs. 240bn alongside capacity expansion to 67 GW," the report said. Leverage should stay comfortable at 3.5-4.0x Net Debt/EBITDA, with RoE and RoCE broadly stable.
Equirus framed the cycle as structural. From the 1973 oil shock that led to the creation of NTPC and NHPC to today's renewables + storage push, India's utilities are again pivoting. The key watchpoint through 2026-2030 will be the timing of commissioning. As Equirus puts it, "timely commissioning and capitalisation of under-construction projects remain the single biggest earnings catalyst through FY30".
— ANI
Reader Comments
This is the kind of structural shift we need. India's power demand is only going up with all the data centers, EV adoption, and manufacturing push. The Equirus report rightly connects this to the 1973 oil shock moment - we're basically securing our energy future. Pumped storage and renewables make so much sense for our geography. Just hope discoms are ready to absorb this capacity without going bankrupt again. State governments need to step up too.
JSW Energy is becoming a behemoth - 30GW target is no joke. But I'm a bit worried about the debt levels. 6-7x net debt/EBITDA through FY30 is high by any standard. What happens if interest rates stay elevated or there's a delay in projects? The report itself says commissioning timing is the biggest catalyst - that's also the biggest risk. Let's see if they can execute as well as they plan.
Good to see NTPC maintaining manageable leverage at 3.5-4.0x. State-owned PSUs are the backbone of our power sector. But I wish there was more focus on distribution reforms - what's the point of generating more power if discoms can't pay for it? Also, 67GW standalone by FY30 for NTPC seems conservative compared to private players' ambitions. Maybe they should be more aggressive in renewables? 🌿
As someone who worked in the power sector for 30 years, I've seen these cycles before. The 1973 shock created NTPC, the 1990s reforms brought IPPs, and now renewables + storage is the next chapter. But please, let's not repeat the same mistakes - proper project appraisal, realistic timelines, and most importantly, ensure that fuel supply (coal linkage, gas availability) is sorted before commissioning. Balance sheets can recover, but lost trust is harder to regain.
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