Reliance Power Ltd Management Discussions

Economic Overview

Global Economy Overview 1

The global economy sustained its growth momentum during Calendar Year (CY) 2025, supported by strong underlying momentum across major economies. Global GDP growth stood at around 3.4%, driven by sustained private consumption, continued expansion in services activity, technology-led investments and accommodative financial conditions. Global trade also remained robust, particularly in technology-related products, supported by investments in digital infrastructure and artificial intelligence.

Inflationary pressures moderated during CY 2025, with global inflation easing to around 4.1%, reflecting gradual normalization in supply chains and commodity markets. Growth trends, however, remained uneven across regions, with emerging and developing economies continuing to face challenges arising from elevated debt levels, trade uncertainties and external vulnerabilities. Towards the end of Fiscal 2026, energy markets witnessed significant supply-side disruptions arising from the Middle East conflict, resulting in a sharp increase in energy prices. Brent crude prices moved from around USD 70 per barrel towards USD 100 per barrel, creating renewed stagflationary risks for the global economy. Despite these headwinds, economic activity remained supported by resilient consumer demand, business investment and continued technological advancement across major economies.

Outlook

The global economic outlook remains positive, although growth is expected to moderate amid heightened geopolitical uncertainty and evolving trade dynamics. Global GDP growth is projected at 3.1% in CY 2026 and 3.2% in CY 2027, while global inflation is expected to increase to 4.4% in CY 2026 before moderating to 3.7% in CY 2027. The outlook remains subject to notable downside risks, particularly from geopolitical frictions and supply chain bottlenecks in the energy sector. Under adverse scenarios, global growth could weaken to around 2.5%, with inflation climbing to approximately 5.4%. More severe disruptions could further compress growth to around 2%. Overall, the global economy is expected to navigate a stable growth trajectory, albeit under elevated uncertainty and inflationary pressures.

Indian Economic Overview

The Indian economy recorded robust growth in FY 2025-26, supported by strong domestic demand, stable financial conditions and sustained policy support. Real GDP expanded by 7.7% in FY 2025-26, compared to 7.1% in the previous year, reflecting broad-based economic expansion despite an uncertain global environment. 2 Depreciation pressure on the Rupee intensified during the second half of the year, driven by foreign portfolio outflows and a surge in crude oil prices. Consequently, the Rupee recorded its steepest annual depreciation against the US Dollar, closing the year at around the 95 level.

Supported by favourable demographics and a large domestic market, India remains well positioned to sustain a high-growth trajectory. Trade engagements with the European Union and the United States are expected to strengthen market sentiment and support the ongoing growth recovery.

The growth momentum was further reinforced by the Governments continued focus on infrastructure development, manufacturing competitiveness and capital formation. Strong public investment, along with policy support for domestic manufacturing, logistics enhancement, clean energy and strategic sectors, contributed to economic activity across the country. Monetary conditions remained supportive, characterised by wwadequate system liquidity and improved credit flow to the commercial sector. While inflationary pressures persisted, primarily due to volatility in food prices, labour market conditions remained stable, with the Labour Force Participation Rate (LFPR) recorded at 59.3% in 2025. 3 The power and energy sector continued to benefit from rising economic activity, increasing industrial demand and ongoing infrastructure development. Continued investments in power generation, transmission infrastructure, renewable energy and energy storage systems remained integral to supporting the countrys long-term energy security and economic growth objectives.

Outlook 4

The Indian economy is expected to maintain a healthy growth trajectory in FY 2026-27, supported by resilient domestic demand, sustained investment activity and continued policy support. Real GDP growth is projected at 6.6%, while continued government focus on infrastructure development, manufacturing competitiveness and capital expenditure is expected to support investment-led growth and strengthen productive capacity across the economy. The Union Budget 2026-27 has provided a capital expenditure allocation of 11.21 lakh crore, reinforcing the Governments commitment to infrastructure-led development and long-term economic growth.

The outlook for the power sector remains favourable, driven by increasing electrification, industrial growth, expanding renewable energy capacity and investments in transmission infrastructure. Continued public investment and policy support for energy transition initiatives are expected to support growth across the sector. However, external risks including geopolitical tensions, elevated energy prices, global supply chain disruptions and weather-related uncertainties may continue to influence inflation and economic activity. Nevertheless, strong macroeconomic fundamentals, ongoing structural reforms and sustained infrastructure investments are expected to support Indias medium-term growth prospects and reinforce its position as one of the fastest-growing major economies.

Industry Overview

Global Power Market

Global electricity demand maintained strong growth in CY 2025, underpinned by increasing electrification across industries, transportation and buildings, alongside rising consumption from data centres and digital infrastructure. Growth was fuelled by industrial activity, increasing cooling needs and expanding electricity usage across emerging economies. Electricity consumption continued to outpace overall energy demand, highlighting the global shift towards a more electricity-driven economy. 5

30,900 TWh

Total Global Electricity Demand in CY 2025

The global power sector also witnessed a structural shift towards cleaner sources of generation. Global electricity demand increased by ~2.8% year-on-year, following a stronger growth of 4.4% in CY 2024. Record additions in renewable energy capacity enabled low-carbon power sources to meet incremental electricity demand growth during the year. These developments highlight the accelerating pace of the global energy transition and the increasing role of clean energy in meeting future electricity requirements. 6

Indian Power Market

The power sector in India continues to play a critical role in supporting economic growth and infrastructure development. As on March 31, 2026, the countrys total installed power generation capacity stood at approximately 532.74 GW, with renewable energy steadily increasing its share within the overall energy mix. 7 Electricity demand remained robust, driven by industrialisation, urbanisation and rising household consumption. The sector successfully met record peak power demand during the year while maintaining a strong supply-demand balance. Continued policy focus on infrastructure development, domestic manufacturing and the energy transition further supported sectoral expansion. Long-term sustainability is being strengthened through continued investments in renewable energy, grid infrastructure and energy storage solutions, while thermal power continues to provide essential base-load support to ensure grid stability and meet growing electricity demand.

7 https://vasudha-foundation.org/wp-content/uploads/Indias-Energy-Overview-year-end-report-of-FY-2025-26.pdf 8 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2215187r=3&lang=1 9 https://static.pib.gov.in/WriteReadData/specificdocs/documents/2026/jun/doc2026611890701.pdf

10 https://www.enerdata.net/publications/daily-energy-news/india-added-553-gw-non-fossil-power-capacity-fy-2025-26.html

Indias Installed Capacity 11

As of March 31, 2026, Indias total installed power generation capacity reached 532.74 GW. The enactment of the Electricity Act of 2003 historically accelerated conventional power generation. Over time, however, the sector has undergone a notable transformation, with investment focus increasingly shifting toward renewable energy to align with national and global climate commitments.

Total Installed Capacity of India

Installed Capacity (in MW) of the country as on March 31, 2026

Category	Installed Capacity (MW)	% Share in Total
Coal	221,940	41.66
Lignite	6,620	1.24
Gas	20,122	3.78
Diesel	589	0.11
Fossil Fuel
Total Fossil Fuel	249,272	46.79
Hydro (including PSPs)	51,415	9.65
Wind	56,095	10.53
Solar	150,261	28.21
BM Power	10,869	2.04
Waste to Energy	877	0.16
Non-Fossil Fuel Small Hydro	5,171	0.97
Nuclear	8,780	1.65
Total Non-Fossil Fuel	283,468	53.21
Total Installed Capacity	532,740	100.00

Source: https://cea.nic.in/wp-content/uploads/installed/2026/0 3/Website-1.pdf

Electricity Consumption Trends

Electricity consumption in India maintained a steady upward trajectory during FY 2025-26, driven by sustained economic growth and rising demand per capita electricity consumption increased to 1,460 kWh in FY 2024-25, reflecting improved access and rising usage levels. Consumption growth was primarily propelled by industrial expansion, rising residential demand and heightened power usage during peak periods 12 . From a sectoral perspective, the industrial sector accounted for the largest share of consumption at ~40.4%, followed by domestic consumption at approximately 25%, while agriculture and commercial segments contributed the remainder. This mix highlights the strong correlation between electricity demand and core economic activity. Improved power availability, the near-elimination of energy shortages to 0.03%, and surging cooling requirements further supported this structural consumption growth. 12

Thermal Power Generation

Thermal power remained the bedrock of Indias electricity generation mix during FY 2025-26, delivering the crucial base-load support required to satisfy rising demand. Within the thermal segment, coal-based generation continued to dominate total installed capacity and total output. The sector plays an essential role in ensuring grid stability, especially during peak load periods and in times of renewable energy intermittency.

During the FY 2025-26, thermal power generation experienced a marginal moderation, with coal-based output declining by roughly 3.69% during the period. This was primarily due to higher renewable energy integration and relatively subdued cooling demand. Despite this temporary easing, thermal capacity expansion continued in parallel, with 13.32 GW of coal-based capacity awarded and 7.21 GW commissioned during FY 2025-26 to meet future needs. 12 The total installed capacity of coal and gas-based thermal plants stood at 242.06 GW by March 31, 2026. The sector is progressively transitioning, with a strong focus on improving operational efficiency, increasing plant flexibility, and enabling smoother grid integration for green energy. 13

Coal Demand and Supply

With one of the largest coal reserves globally and among the highest levels of consumption, coal continues to play a central role in ensuring Indias energy security and reliable power supply. It remains a key source of base-load energy, particularly for the power and industrial sectors.

11 https://cea.nic.in/wp-content/uploads/installed/2026/03/Website-1.pdf

12 https://www.mospi.gov.in/uploads/publications_reports/publications_reports1774859128428_05e8ebb5-0598-4112-844c-bbe00e04aab8_33rd_Edition_of_ ES-2026_Final.pdf 13 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2250039r=3&lang=1#:~:text=So%20far%2C%20a%20total%20of,8.78%20GW%20Nuclear%20 Power%20capacity.

During the year under review, Indias coal sector continued to strengthen its production capabilities, supported by capacity expansion, operational improvements and enhanced mining efficiency. Coal production reached a record 1,157.52 million tonnes (MT) in FY 2025-26, compared with 1,047.57 MT in FY 2024-25, reinforcing coals critical role in supporting the countrys energy security and growing power demand. 14 Coal imports stood at 246.37 MT in FY 2025-26, compared with 243.63 MT in FY 2024-25. While domestic coal production continuedtoexpand,importsremainednecessarytomeetspecific industrial requirements, particularly coking coal demand from the steel sector. The sector remained focused on strengthening domestic production, improving operational efficiency and supporting the countrys rising energy requirements. 14 Coal production from captive and commercial mines continued to strengthen during FY 2025-26, crossing the 200 MT milestone for the first time. Production increased to 210.46 MT, compared with 173.01 MT in FY 2024-25, registering a growth of 21.65%, while dispatches rose to 204.61 MT from 170.66 MT in the previous year, reflecting growth of 19.89%. The performance was supported by capacity expansion, operational improvements and enhanced mining efficiency across captive and commercial coal blocks. 15 Overall, the sector continued to make progress in strengthening domestic coal availability, improving supply reliability and supporting the countrys growing energy requirements through increased production from both commercial and captive mining operations.

Renewable energy generation

Indias renewable energy sector witnessed strong growth, with a record annual non-fossil capacity addition of 55.29 GW. Total installed renewable energy capacity reached 274.68 GW as of March 2026. This progress reflects Indias advancement towards its target of achieving 500 GW of non-fossil fuel capacity by 2030 under the Panchamrit commitments. India currently ranks among the top three countries globally in renewable energy capacity. 16

274.68 GW

Total installed renewable energy capacity as of March-2026

Source: https://cea.nic.in/wp-content/uploads/installed/2026/03/Website-1.pdf

Solar energy continued to be the primary driver of Indias renewable energy expansion during FY 2025-26. The country crossed the 150 GW milestone, with cumulative installed solar capacity reaching 150.26 GW as of March 31, 2026. This comprised 110.43 GW of utility-scale capacity, 25.73 GW of rooftop solar capacity and 14.10 GW under Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) and off-grid projects. The sector recorded its highest-ever annual capacity addition of 44.61 GW during FY 2025-26, significantly exceeding the target of 34 GW and almost doubling the previous record addition of 23.83 GW achieved in FY 2024-25. Distributed solar installations also witnessed strong growth, with additions reaching 16.31 GW, including 8.71 GW of rooftop solar capacity and 7.67 GW under KUSUM projects. These developments highlight the increasing adoption of solar energy across utility-scale, commercial, industrial and residential segments, reinforcing solar powers central role in Indias clean energy transition.

150.26 GW

Total installed solar capacity in India as of March 31, 2026

Wind energy continued to strengthen its contribution to Indias renewable energy mix during FY 2025-26, with the sector recording its highest-ever annual capacity addition of 6.05 GW, up 46% from 4.15 GW in FY 2024-25. As a result, cumulative installed wind power capacity crossed 56 GW as of March 31, 2026.

Growth was largely driven by the commercial and industrial (C&I) segment, which contributed approximately 4.5 GW, accounting for nearly 75% of total additions during the year. Domestic manufacturing capabilities also improved, with wind turbine nacelle and hub manufacturing capacity increasing from 18 GW to 24 GW, further strengthening the sectors supply chain and supporting future capacity expansion.

56+ GW

Total installed capacity of Wind power in India, as of March 2026

14 https://coal.gov.in/major-statistics/production-and-supplies

15 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2248300r=48&lang=2

16 https://www.pib.gov.in/PressReleasePage.aspx?PRID=2250039r=3&lang=1#:~:text=So%20far%2C%20a%20total%20of,8.78%20GW%20Nuclear%20 Power%20capacity

Hydropower remained a critical component of the renewable energy mix, contributing to grid stability and long-term energy security. The sector comprises both large and small hydro projects, with small hydro supporting decentralised generation in hilly regions. Large hydro projects continue to provide essential base-load support and play a critical role in balancing renewable energy variability, especially with the increasing integration of solar and wind energy. Overall hydro capacity remained relatively stable compared to FY 2024-25, reflecting limited additions during the year. However, its importance in enhancing grid flexibility and supporting system stability remains significant.

56.58 GW

Total installed hydro power capacity as of March 31, 2026

5.17 GW

Small Hydro Power capacity

51.41 GW

Large Hydro Power capacity

Battery Energy Storage Systems

Energy storage systems are emerging as a key enabler in Indias energy transition, supporting grid stability and renewable energy integration. The Government of India plans to add over 47 GWh of battery energy storage capacity between 2022 and 2032, with an estimated investment of approximately 3.5 lakh crore.17

Battery Energy Storage Systems (BESS) are gaining traction through policy support and structured deployment initiatives. These include Viability Gap Funding (VGF) schemes with a total outlay of about 9,100 crore covering over 43 GWh of BESS capacity, including 30 GWh programme approved in June 2025 with an outlay of 5,400 crore.

Further initiatives include earmarking of the 10 GWh allocation under the ACC battery storage programme, along with measures such as ISTS charge waivers and co-location of storage with renewable energy projects to enhance efficiency and reduce costs. 18 Energy storage is emerging as a critical enabler of Indias clean energy transition, supporting grid stability, renewable energy integration and round-the-clock power availability. The sector is witnessing increasing policy focus and regulatory support, with growing deployment of both Pumped Storage Projects (PSPs) and BESS. As renewable energy penetration increases, energy storage solutions are expected to play an increasingly important role in enhancing grid flexibility, improving reliability and facilitating the efficient integration of variable renewable energy sources into the power system. 19

Bess Capacity (in MWh)

Source: https://www.pib.gov.in/PressReleasePage. aspx?PRID=2246898r=3&lang=2#:~:text=As%20per%20the%20 National%20Electricity,renewable%20energy%20in%20the%20grid.

Green Hydrogen 20

Green Hydrogen is emerging as a key pillar of Indias energy transition, particularly for decarbonising hard-to-abate sectors such as steel, refining and fertilisers. The government of India launched the National Green Hydrogen Mission (NGHM) to position India as a global hub for production, utilisation and export of green hydrogen and its derivatives. The Mission targets production of 5 million metric tonnes per annum (MMTPA) by 2030, supported by investments exceeding

8 lakh crore. It also aims to reduce fossil fuel imports by over 1 lakh crore and avoid nearly 50 million tonnes of greenhouse gas emissions annually.

Progress is underway, with around 8,000 tonnes per annum of green hydrogen production capacity commissioned as of early 2026. Production capacities have been allocated to multiple firms, alongside the development of electrolyser manufacturing capabilities. Pilot projects across mobility, shipping and industrial applications indicate early-stage ecosystem development. However, cost competitiveness remains dependent on renewable energy prices, which constitute a significant portion of production costs. With continued policy support, development of green hydrogen hubs and growing export opportunities such as green ammonia, the sector is expected to scale progressively over the medium term, supporting Indias long-term energy security and decarbonisation goals.

Power Transmission and Distribution

FY 2025-26 marked continued progress in Indias power transmission and distribution (T&D) sector, supported by network expansion and infrastructure strengthening. The sector successfully met a record peak demand of 242.49 GW, while power shortages declined to 0.03%, reflecting improved supply-demand balance and system reliability. 21 Indias transmission network is expanding to over 5 lakh circuit kilometres (ckm) of lines (220 kV and above), along with significant augmentation in transformation capacity and inter-regional transfer capability. 22

The Government has prioritised modernisation and expansion through the National Electricity Plan (Transmission) up to 2032, targeting peak demand of approximately 458 GW. The plan includes the expansion of the transmission network to around 6.48 lakh ckm. The plan also focuses on integrating renewable energy zones, enhancing grid flexibility and enabling evacuation of power from emerging renewable and green hydrogen hubs. The T&D sector continues to evolve with increased focus on grid resilience, reduction of transmission losses and integration of clean energy sources, supporting reliable and efficient power delivery across regions.

Source: https://iced.niti.gov.in/energy/electricity/transmission/transmission-lines

Power Sector Outlook

Indias power sector is well-positioned for sustained growth, supported by strong demand fundamentals and continued infrastructure expansion. The sector demonstrated resilience in FY 2025-26 by meeting a peak demand of 242.49 GW, while maintaining minimal power shortages to 0.03%, indicating improved supply-demand balance and system reliability. Electricity demand is expected to grow steadily, driven by economic expansion, electrification trends and emerging consumption drivers. Industry estimates suggest demand growth of approximately 5-6% in FY27, with long-term growth broadly aligned with real GDP growth.

The International Energy Agency has projected electricity demand growth at a CAGR of approximately 6.4% over 2025-2030, supported by rising demand from data centres, industrial activity and rising cooling requirements. 23 To meet this demand, significant investments in generation, transmission and storage infrastructure will be required. The National Electricity Plan targets peak demand of around 458 GW by 2032, necessitating substantial capacity additions. With continued policy support for renewable energy, energy storage and grid modernisation, the sector is expected to maintain a balanced growth trajectory, while ensuring reliability, flexibility and long-term energy security.

Company Overview

Reliance Power Limited, a constituent of the Reliance Group, is a leading private sector power generation company in India. The Company has developed a diversified portfolio spanning thermal and renewable power projects, with capabilities across development, construction and operation of power plants. During FY 2025-26, the Company continued to strengthen its business foundation through operational discipline, prudent financial management and continued reduction of debt, including through asset monetisation initiatives, with a focus on enhancing financial flexibility and creating long-term value for shareholders. It is progressively transitioning towards a more balanced and sustainable energy mix through future investments in renewable energy, including solar power and Battery Energy Storage Systems (BESS), supported by its renewable energy platform. The Company has further strengthened its financial position through continued deleveraging initiatives, achieving a standalone bank debt-free status and maintaining a robust balance sheet. Reliance Power continues to pursue growth opportunities aligned with Indias energy transition, with a focus on clean energy solutions, portfolio optimisation and disciplined capital allocation. Supported by a stronger balance sheet, reduced leverage and improved financial flexibility, the Company is well-positioned to strengthen its competitiveness and deliver sustainable long-term growth while contributing to Indias evolving energy landscape.

Operations of the Company

The Company is engaged in the development and operation of power generation projects, supported by integrated coal resources and long-term power offtake arrangements. Reliance Power has established a balanced portfolio comprising thermal and renewable assets, with a continued focus on operational efficiency and reliability.

As of FY 2025-26, the Company operates an installed generation capacity of 5,305 MW, predominantly comprising large-scale thermal assets. The Company is also advancing its energy transition through the implementation of solar power and BESS projects, which will strengthen its renewable energy portfolio. The Company remains focused on improving plant performance, optimising asset utilisation and pursuing growth opportunities in clean energy and emerging technologies.

5,305 MW

total capacity of power projects

Sasan Ultra Mega Power Project (Madhya Pradesh)

The 3,960 MW Sasan Ultra Mega Power Project (UMPP) is the Companys flagship asset and one of the largest integrated coal-based power plants globally, comprising six units of 660 MW each. Supported by captive coal mines, the project ensures fuel security and cost competitiveness. It has consistently demonstrated strong operating performance and high Plant Load Factors, forming the backbone of the Companys generation portfolio, while supporting base-load demand and grid stability, while contributing significantly to the Companys overall operational efficiency.

Rosa Coal-Based Power Project (Uttar Pradesh)

The 1,200 MW Rosa Power Project, comprising four units of 300 MW each, is a key asset in northern India. The plant has maintained stable operational performance, supported by improvements in efficiency and declared capacity. Long-term fuel supply arrangements ensures consistent generation and reliability across varying demand conditions.

Samalkot Power Project (Andhra Pradesh)

The Samalkot Power Project, owned through Samalkot Power Limited (SMPL), is a gas-based power plant located in Andhra Pradesh. The project has remained non-operational due to persistent challenges related to domestic gas availability and the commercial viability of gas-based power generation. In line with its strategy of portfolio optimisation and disciplined capital allocation, the Company is pursuing a planned exit from the asset, enabling greater focus on its core operating assets and future growth opportunities in clean and renewable energy.

Dhursar Solar (PV) Power Project (Rajasthan)

The 40 MW Solar Photovoltaic (PV) project at Dhursar forms part of the Companys renewable energy portfolio and continues to operate efficiently. It contributes to clean energy generation and supports the Companys strategy of gradually expanding its renewable footprint while maintaining a balanced energy mix. The project reflects the Companys early entry into renewable energy and continues to contribute to its clean energy portfolio.

Concentrated Solar Power (CSP) Project (Rajasthan)

The Company operates a 100 MW Concentrated Solar Power (CSP) project in Rajasthan, representing one of Indias early large-scale solar thermal installations. It also provides valuable operational experience across diversified solar technologies, supporting the Companys long-term renewable strategy.

Wind Power Project (Tamil Nadu)

The Company operates a 5 MW wind power project at Kollupalyam and Pavoorchatram in Tamil Nadu, representing its presence in renewable energy generation.

Renewable Energy Projects (Under Development)

The Company is actively scaling its renewable energy portfolio through large-scale solar and battery energy storage projects. Reliance Power secured-

930 MW solar + 465 MW / 1,860 MWh BESS project

350 MW solar + 175 MW / 700 MWh BESS project

650 MW solar + 750 MW / 3300 MWh BESS Project These projects represent a significant step towards developing dispatchable renewable energy solutions and align with the Companys strategic shift towards clean and flexible power generation.

Reliance Enterprise Private Limited and Druk Holdings and Investment will jointly develop Bhutans largest solar power project through a 50:50 venture, with an installed capacity of 500 MW. In addition, the parties have also announced plans to jointly develop a 770 MW hydroelectric project.

SWOT Analysis

Strength

A well-established private sector power generation company with a diversified portfolio.

Long-term Power Purchase Agreements (PPAs) providing clear revenue and cash flow visibility.

Integrated operations supported by captive coal resources (Sasan).

Historically strong operational track record characterized by high plant load factors.

Greatly enhanced financial flexibility following the achievement of standalone bank debt-free status.

Competent, highly experienced corporate management and technical operations teams.

Opportunities

Aggressive scale-up in the high-growth renewable energy, including solar and utility-scale BESS domains.

Deployment of large-scale integrated solar-plus-storage round-the-clock power solutions.

Capitalizing on Indias expanding electricity demand driven by urbanization and manufacturing growth.

Leveraging strong government policy tailwinds for green energy, storage upgrades, and grid monetization.

Strategic value unlocking through portfolio rationalization and non-core asset monetization.

W Weaknesses

High dependence on thermal power within the active revenue-generating portfolio .

Vulnerability to macro fuel supply chain dynamics and changing regulatory compliance regimes.

Relatively limited operational renewable capacity compared to the massive upcoming project pipeline.

Legacy assets with varying operational and thermal efficiency levels across plants.

T Threats

Intensitfying environmental mandates, emissions compliance norms, and global decarbonization pressures.

Recent regulatory actions may impact market perception and increase compliance-related risks.

Global geopolitical disruptions and Rupee depreciation may increase project capex during implementation.

AI-driven advancements may require continuous technology upgradation.

Key Risks and Concern

Capital Intensity and Long Gestation Cycles

The power sector remains highly capital-intensive with long project development cycles, exposing utilities to shifting regulatory, fuel, and market risks. Reliance Power actively dampens these variables through rigorous operational efficiency and cautious capital structures.

Fiscal Stress of State DISCOMs

The financial volatility of state distribution companies (DISCOMs) continues to strain sector-wide payment timelines and liquidity. While digital initiatives and structural updates have improved efficiency and revenue realisation in certain regions, structural challenges such as tariff gaps, operational inefficiencies and delays in subsidy disbursements continue to persist. The Company aggressively manages this counterparty credit risk by embedding strict contractual safeguards and relying on long-term Power Purchase Agreements (PPAs), to insulate its revenue streams.

Adoption of updated environmental compliance norms

The power sector continues to experience tightening environmental regulations. Compliance with evolving norms may result in incremental capital expenditure and operational adjustments for thermal power plants.

The Company remains committed to compliance of meeting regulatory requirements and continues to evaluate measures to enhance environmental performance while maintaining operational efficiency and cost discipline.

Government focus for future growth of renewable energy

Increasing policy emphasis on renewable energy, energy storage systems and green hydrogen is reshaping the power sector landscape. While this transition presents significant long-term opportunities, it may impact the utilisation levels of conventional power assets over time.

The Company is actively aligning its strategy with these evolving trends through investments in renewable energy, including solar and BESS and has successfully secured large-scale integrated solar-plus-storage projects accordingly. This approach reflects a balanced transition, aimed at balancing the dependence on conventional assets while positioning for future growth opportunities in clean energy.

Risk Management Framework

The Company has a established structured risk management framework aligned with its strategic priorities and evolving business environment. The framework enables systematic identification, assessment and monitoring of key risks across corporate and project levels. Risk oversight is supported by internal governance mechanisms, ensuring continuous evaluation of operational, financial and strategic risks. As the Company advances its renewable strategy, the framework is evolving to address emerging risks associated with energy transition, regulatory changes and market dynamics.

Health, Safety and Environment (HSE) and Corporate Social Responsibility (CSR)

The Company places strong emphasis on health, safety and environmental standards across its operations. Continuous focus on operational discipline and process efficiency ensures adherence to safety protocols and reliable plant performance. The Company remains committed to sustainable practices and is increasing its focus on clean energy initiatives, including solar power generation and BESS, as part of its environmental responsibility. CSR remains integral to its philosophy, with initiatives focused on community development and long-term stakeholders value creation. The Company through its subsidiaries continues to support community development and social initiatives in areas surrounding its operations, aligned with its commitment to responsible growth and nation-building.

Human Resources

The Company recognises its human capital as a key driver of operational performance and long-term growth. It maintains a balanced workforce comprising experienced professionals and emerging talent, aligned with its strategic priorities. The Companys focus areas include building a performance-driven culture through continuous learning, skill development and leadership initiatives. Employees are aligned with the Companys focus on operational excellence, financial discipline and expansion into renewable energy and emerging technologies. The Company maintained cordial and harmonious industrial relations during the year. Continued focus on employee welfare, safety and constructive engagement contributed to smooth operations and a positive work environment.

During the year, the Company granted Employee Stock Options for the first time, marking an important step towards strengthening employee ownership. The ESOP grant is intended to reward performance, loyalty and significant contributions of its people to the companies sustained growth and transformation.

7,599

Total Workforce as of March 2026 (on consolidated basis)

Internal Financial Control and Systems

The Company has put in place internal control systems and processes which are commensurate with its size and scale of its operations. The system has control processes designed to take care of various control and audit requirements. The Company has Internal Audit function which oversees the implementation and adherence to various systems and processes. The internal audit function reviews and ensures the sustained effectiveness of internal financial controls designed by the Company. The internal audit team is supported by the reputed audit firms to undertake the exercise of Internal Audit at various project locations. The report of the Internal Auditors is placed at the Audit Committee of the respective Board and the improvements in systems and processes are carried out where necessary.

Financial Operations

An extract of the Consolidated Profit and Loss is provided below.

(H in lakh)

Particulars	Year ended March 31, 2026	Year ended March 31, 2025
Revenue from operations	7,61,971	7,58,289
Other income	36,881	67,415
Total income	7,98,852	8,25,704
Cost of fuel consumed	3,79,911	3,89,200
Employee benefit expenses	23,233	20,029
Finance cost	1,66,621	2,05,586
Depreciation/amortisation	82,912	90,967
General, administration and other expenses	1,22,495	1,38,235
Total expenses	7,75,181	8,44,017
Profit before exceptional items and tax	23,671	(18,313)
Exceptional items	(38,160)	3,23,042
Profit/(loss) after exceptional items and before tax (continuing operations)	(14,489)	3,04,729
Tax expenses	19,186	9,989
Profit/(loss) after taxes (continuing operations)	(33,675)	(2,94,740)
Profit/(loss) after tax (discontinuing operations)	(14)	43
Profit/(loss) after tax (continuing and discontinuing operations)	(33,689)	2,94,783
Profit attributable to non-controlling interest	-	-
Profit attributable to owners of the parent	(33,689)	2,94,783
EPS (Basic) (I)	(0.817)	7.338
EPS (Diluted) (I)	(0.817)	7.197

Key financial ratios based on Consolidated Financials are presented below.

Particulars	Year ended March 31, 2026	Year ended March 31, 2025
Debtors turnover (Days)	62.8	73.2
Inventory turnover (Days)	70.6	61.8
Interest coverage ratio 1	1.1	0.9
Current ratio	0.5	0.4
Debt equity ratio	0.88	0.88
Operating profit margin (%) 2	31	28
Net profit margin (%) 2	1	(3)
Return on net worth (%) 2	0	(2)

1 Improved due to an decrease in finance cost and increase in EBIT. 2 Improved due to an increase in EBITDA.