Gujarat Industries Power Company Ltd plans a significant ₹6,000 crore thermal power expansion. The company also guided for FY27 EBITDA between ₹950-1,000 crore, with its 600 MW Khavda solar project operational.
Gujarat Industries Power Company Ltd
Gujarat Industries Power Company Ltd (GIPCL) has announced a major strategic development, approving a ₹6,000 crore expansion for a 750 MW lignite-based power station. The company also provided a positive financial outlook, guiding for consolidated EBITDA between ₹950-1,000 crore for FY27.
Reader Takeaway: Aggressive growth phase with higher debt; long-term ROE hinges on execution.
What just happened
The company's board has approved a significant capital expenditure of approximately ₹6,000 crore for the expansion of a 750 MW lignite-based power station. This project is planned for commissioning between 2032 and 2033 on a Section 62 cost-plus basis. GIPCL also reported that its 600 MW Khavda solar project is now operational, achieving a 33.24% CUF. For FY27, the company estimates an annual revenue of ₹420 crore from this solar asset.
Why this matters
This substantial thermal expansion signals GIPCL's commitment to increasing its power generation capacity. The guidance for FY27 EBITDA indicates management's confidence in future profitability, driven by both existing thermal assets and the newly operational solar capacity. However, the company also faces challenges related to debt management and infrastructure development for new projects.
The backstory
Historically, GIPCL operated thermal and gas-based power plants. The company is now navigating a transition, focusing on scaling its renewable energy footprint while addressing legacy issues like stranded gas assets. The Khavda solar project represents a key step in this diversification.
What changes now
The approved thermal expansion marks a long-term strategic direction for GIPCL. The company is exploring repurposing land at its Baroda plant for Battery Energy Storage Systems (BESS) as its gas-based stations are deemed unlikely to be revived. Management has also committed to quarterly updates for enhanced transparency.
Risks to watch
Investors will need to monitor the company's rising debt levels, which are projected to peak between ₹4,500 crore and ₹6,500 crore due to the significant upcoming capital expenditure. Furthermore, the readiness of evacuation infrastructure for expansion projects is a critical watch point for timely capacity utilization. The company's profitability may also be sensitive to interest rate fluctuations, as borrowings currently have an average coupon rate of 7.8% on floating terms.
Peer comparison
(No specific peer comparison data was provided in the filing.)
Context metrics (time-bound)
- 600 MW Khavda Solar CUF: 33.24% (Current Quarter)
- FY27 EBITDA Guidance: ₹950-1,000 crore
- Future Thermal Expansion Capex: ₹6,000 crore
- Total Non-current Debt (as of Mar '26): ₹3,250 crore
- Peak Debt Projection: ₹4,500-6,500 crore
- Estimated Annual Revenue (600 MW Khavda): ₹420 crore (FY 2026-27)
- Solar Division EBITDA: ₹332 crore (FY 2025-26)
- Solar Division PBT: ₹62 crore (FY 2025-26)
- Thermal (SLPP 1 & 2) Revenue: ₹1,103 crore (FY 2025-26)
- Average Coupon Rate on Borrowings: 7.8% (Current)
What to track next
Investors should closely track the progress of the thermal expansion project, the company's debt management strategy, and the operational ramp-up and evacuation infrastructure for new renewable projects. Monitoring the transition to BESS solutions will also be key.