Today the world is primarily running from power, which is used in day-to-day activities from operating machines, to cooling and transportation. The electric energy is derived from hydropower, which is a key part of India’s energy landscape, providing support to the electricity grid and helping to make it more reliable and resilient.
It is utilized by turbines and generators to convert that kinetic energy into electricity. The other source is Thermal power which involves burning fuels like oil, coal, and natural gas to generate steam, which then powers a turbine and a generator to produce electricity.
One such company that is focused on both hydropower and thermal power is Jaiprakash Power Ventures Limited. In this article, we explore the company overview, financial highlights, and future outlook.
Industry Outlook
India is the third-largest producer and consumer of electricity worldwide, with a projected power capacity of 492.86 GW in 2024 to 752.90 GW by 2029, growing at a CAGR of 8.80%.
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In Budget 2024, the government allotted 50% more funds to energy sectors. Funding for solar energy and green hydrogen. By 2026, 81 thermal units with renewable energy generation will take the place of coal, according to the Ministry of Power. The government is planning to target 40 GW of power through solar rooftops and to set up 21 new nuclear power reactors with a total installed capacity of 15,700 MW by 2031.
Power is upgrading and adding the transmission system capacity to evacuate 500 GW of electricity from non-fossil fuel (renewable energy + nuclear) by FY 2030. The CEA estimates India’s power to reach 817 GW by 2030. Renewable energy generation would increase by 18% to 44% and thermal energy generation is expected to be reduced from 78% to 52% by 2030.
Company Outlook Of Jai Prakash Power Ventures
Jai Prakash Power Ventures was incorporated in 1994. It is India’s leading infrastructure conglomerate. And the world’s largest hydropower project in the private sector, accounting for 1.32 million, is the largest independent power producer in India.
The company is engaged in the business of thermal and hydropower generation, coal mining, and cement grinding. The company has interests in civil engineering, cement, power, real estate & expressways, hospitality, fertilizer, health care, and education.
The main objective is to carry on the business of general electric power supply to utilities and bilateral power exchanges. The company has executed 13 hydropower projects spread across 6 states and the neighboring country of Bhutan, generating 10,290 MW of power. The Group has developed 3300 megawatts of supercritical thermal power plants, of which a 1980 megawatt power station is in Bara, Uttar Pradesh.
Segments and Performance of JP Power Ventures
The company primarily engages in power generation, which is the only segment. The company has Amelia in the north coal mine, which is a captive consumption and the company received the right of exploration in the Banda North coal block. The turnover from cement grinding is nil and sand mining continued till May 2023 in Andhra Pradesh.
Source: Annual Report
Business Operations Of JP Power Ventures
Company Plant and Operations
The company presently owns and operates three power plants with an aggregate capacity of 2220 MW. The company’s power projects are in Uttarakhand and Madhya Pradesh.
The Jaypee Vishnuprayag Hydro Power Plant
It has an installed capacity of 400 MW in Uttarakhand. The plant supplies 88% of the net power generated and the remaining 12% is supplied free of charge to the Government of Uttarakhand. The energy generated during the year ended March 31, 2024, was 1627.46 MUs as compared to 1910.83 MUs during the corresponding previous year and the net saleable energy of 1413.67 MUs, as against 1661.33 MUs during the previous year.
The Jaypee Bina Thermal Power Plant
It has an installed capacity of 500 MW (2 x 250 MW) in Madhya Pradesh. At a rate set by MPERC, the plant supplies 65% of its installed capacity, while the Madhya Pradesh government is required to supply 5% of actual generation at variable cost, which is also to be given to MPPMCL. The gross energy generated was 3328.97 MUs during the year 2023–24, as compared to 2979.74 MUs during the previous year, thus being higher by 349.23 MUs. The company achieved a PLF of 75.80% as compared to 68.03% in the previous year.
The Jaypee Nigrie Supercritical Thermal Power Plant
It has an installed capacity of 1320 MW in Madhya Pradesh. The plant supplies 30% of installed capacity at a tariff determined by MPERC guidelines and the government of Madhya Pradesh is to supply 7.5% of actual generation at variable cost, which is also to be supplied to MPPMCL.
The gross energy generation of the plant was 9840.56 MUs during the year 2023–24, as compared to 8036.35 MUs in the previous year, which was higher by 1804.21 MUs. During the year 2023–24, 5400.59 MUs of power were sold as merchant sales. The company achieved a PLF of 84.87% as compared to 69.50% in the previous year.
Coal Mining Operations
Amelia (North) Coal Mine: The peak rated capacity of 2.8 MTPA since 2015. Coal is used at 2×660 MW in the Jaypee Nigrie Supercritical Thermal Power Plant. Then, with the expansion from 2.8 MTPA to 3.36 MTPA in 2023 and 2023-2024 the company attained the PRC of 3.92 MTPA.
Bandha North Coal Mine: The company exploration work is going on in the coal block department.
Sand Mining Operations
The company continued its sand operations in May 2023 through its subcontractor, such as excavation, storage, sale, etc. in Andhra Pradesh. There has been a turnover of Rs. 721.97 crore in the previous year, with 885.06 crore from Sand Mining Operations till November 2023.
Diversified infrastructure developments and accomplishments of JP Power Ventures
Engineering & Construction: The company’s completed EPC projects across India are:
- The company completed the 1450 MW Sardar Sarovar Project, the largest water resource project in India.
- 1000 MW Tehri Dam, Asia’s highest rockfill dam.
- 1000 MW Indira Sagar Power House, the second-largest surface powerhouse in the country.
- 1500 MW Nathpa Jhakri Power House, the largest underground powerhouse in the country.
Cement: Jaypee Group is one of the largest cement producers in the country and has three decades of experience in producing quality cement.
Real Estate: The company developed golf-centric premium townships in the country that are stretching over 452 acres.
Expressways: The company has entered into the construction of expressways with the Yamuna Expressway project of 165 KM with 6 lanes.
Fertilizers: The company plant is situated in Panki, Kanpur, and is one of the oldest urea manufacturing plants in the country with an installed capacity of 7.22 lac MT per annum. Urea production started in June 2013 and the product is sold under the brand name “Jaypee Chaand Chaap Urea.”
Hospitality: The group business operates 6 properties across New Delhi, Uttar Pradesh, and Uttarakhand. 4 five-star hotels with a total capacity of 644 rooms. Another 5-star luxury for resorts and spas with SIX SENSES at Greater Noida with 170 living spaces.
Healthcare: The group promotes world-class health care amongst the masses by providing quality and affordable medical care with a commitment to the Jaypee Hospital. The hospital has been planned as a 1200-bed tertiary care multi-specialty facility and is currently in the process of commissioning 525 beds in the first phase.
Sports: The Group hosted India’s first-ever Formula OneTM Grand Prix in October 2011.
Information Technology: The group offers a range of IT infrastructure management, networking and communication, multimedia and content development services, e-learning, and software solutions. Today, partnering with leading IT companies such as IBM and CISCO
Education: The Group currently provides education across all spectrum of the learning curve through 31 Schools, 6 Private ITIs, 2 Polytechnics, 1 Post Graduate College, 1 B.Ed. College, 1 construction skills training institute, 1 international engineering and vocational center, and 4 universities catering to the learning of over 30,000 students.
Recent Orders
The company got a contract for Supply and Technical Field Advisory Support of Flue Gas Desulphurization (FGD) that was signed with M/s GE Power on 30 March 2024 for Rs. 284.40 Cr. The system will be installed by December 2026 in Jaypee Bina Thermal Power Plant to reduce the MoEF & CC prescribed limit of 600 mg/Nm3.
The company got a contract for the supply of flue gas desulphurization has been signed with M/s GE Power on 30 March 2024 for Rs. 490.50 crore. The system will be installed by December 2026. After the commissioning of this system, the emission level of SOx from both boilers will be reduced to the MoEF & CC prescribed limit of 200 mg/Nm3.
Financial Highlights Of JP Power Ventures
In FY2024, JP Power Ventures Ltd increased its net sales by 17%, reaching ₹6,762.78 crores compared to ₹5,786.67 crores in FY23. Over the past 3 years, from FY21 to FY24, the company achieved a strong net sales CAGR of 27%. In FY24, JP Power Ventures Ltd’s net profits soared by 1,487.6%, reaching ₹1,021.95 crores compared to ₹55.42 crores in FY23.
The reason behind JP Power Ventures Ltd’s consistent growth is that the company has significant operations that generate its revenues and with its diversified portfolio. The company decreased its interest expenses and cost expenses YoY and increased its other income YoY basis with strong business updates. The major income inflowed by changes in inventories JP Power Ventures Ltd. maintained strong financial metrics in FY24, with a return on equity of 13.33% and a return on assets of 13.91%.
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Future Outlook Of JP Power Ventures
The company is coming up with additions of 3200 MW projects (2700 MW Lower Siang and 500 MW Hirong) coming up in Arunachal Pradesh and 720 MW (270 MW Umngot and 450 MW Kynshi Stage II) in Meghalaya.
The company plans to improve its operational efficiency to reduce costs and improve profitability.
The company is investing in several initiatives to improve its sustainability.
India is anticipated to witness an increase of more than 70% in its electricity generation, making it one of the most significant increases among the world’s largest electricity producers.
It is anticipated that renewables will make up approximately 16.9% of the country’s total electricity generation by 2032.
The company is capitalizing on growth due to its impressive power generation and its diversified portfolio.
Key metrics Of JP Power Ventures
Conclusion
As we near the end of the article, we look in brief. The company has significantly grown in the last four years. The government is focused on the power sector and funded 50% higher for growth and expansions in Budget 2024. The growing population, faster urbanization, industrialization, and growing demand can sustain economic growth and continue to drive electricity demand in India.
JP Power Ventures Ltd. has strong operations and financials, with a return on equity grown at a 3-year CAGR of 48% and a return on capital employed grown at a CAGR of 39%. The company has followed steady growth. Strong government initiatives in the power sector allow the company to generate some profits and reestablish its existence in the markets.
The management is trying its best to control its costs and reduce borrowings to make it profitable in the coming years. And looking for high cash generation from its operations to become a debt-free company in the future. What do you think about the future of JP Power Ventures Ltd. and its industry? Let us know your views in the comments section below.
Written by Shashi
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