Support from the government of Odisha
OPTCL is a wholly owned undertaking of the GoO and a strategically important entity for the power sector infrastructure in the state of Odisha. The ownership structure provides adequate financial flexibility. It is also the nodal agency of the government for undertaking power transmission activity in the state. Being the transmission licensee, OPTCL is mandated to ensure the development of an efficient, coordinated, and economical transmission network for smooth flow of power to the load centers. OPTCL's credit quality is also supported by its access to funds at low cost and its ability to mobilise financial resources from several financial institutions and multilateral development institutions due to its status as a state- owned entity. Acuité believes that OPTCL, being a 100% undertaking of GoO, shall continue to benefit from financial, operational and management support as and when required. The GoO has demonstrated financial support by way of equity to OPTCL on a regular basis. Any changes in the ownership pattern of OPTCL or any event that impinges GoO's overall credit profile shall remain a key rating sensitivity.

Steady business risk profile buoyed by favourable operating efficiency
OPTCL’s revenue stood at Rs.1318.57 Cr. in FY25 as compared to revenues of Rs. 1204.94 Cr. in FY24. Overall, revenue from operations increased in FY2025 primarily on account of timely tariff revision by Odisha Electricity Regulatory Commission (OERC) coupled with transmission system availability of 99.98% ensuring higher units transmitted. As on Dec’25 the Company has recorded Rs.933.46 crore of total revenue, indicates stable operating performance in the medium term. The operating margins have improved from 48.69% in FY25 as against 43.48% in FY24. For FY25 PAT margin stood at 18.03% on account of lower tax outgo and higher deferred income in the form of government grants as compared to -14.82% in FY24. Inbuilt ‘cost plus tariff’ structure The billing of transmission charges by OPTCL is regulated by ERC as per Annual Revenue Requirement (ARR) of a ‘cost-plus tariff’ mechanism. The regulator allows a post-tax return on equity and other uncontrollable expenses are allowed to be passed through in tariff through the Annual Performance Review (APR) process. Acuité believes the ‘tariff mechanism will continue to sustain the stable business outlook for the company.

Healthy financial risk profile
The tangible net worth of the company stood at Rs. 3355.47 Cr. as on March 31, 2025, as compared to Rs. 2655.07 Cr. as on March 31, 2024, due to accretion to reserves and infusion of equity share capital. The infusion of equity share capital by Rs. 452.61 Cr. has been noticed during FY 25 on account of increased ongoing projects. The gearing of the company stood modest at 0.56 times as on 31 March 2025. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 2.20 times as on March 31, 2025 as compared to 2.88 times as on March 31, 2024.The debt protection metrices of the company remain comfortable marked by Interest coverage ratio (ICR) of 4.88 times and debt service coverage ratio (DSCR) of 2.13 times for FY25.The net cash accruals to total debt (NCA/TD) stood healthy at 0.35 times in FY2025. As of December 2025, net worth further improved to Rs.3,435.43 crore aided by an additional Rs.540 crore equity infusion, an additional Rs.65 crore infusion is expected during the year. The company has also secured a sanctioned long-term loan of Rs.899.99 crore, with Rs.100 crore already disbursed and another Rs.100 crore scheduled by March 2026, while the balance will be availed in FY27. Despite some moderation in leverage from these borrowings, Acuité believes that overall financial flexibility to remain strong backed by sustained government equity support.

Regulated nature of operations
OPTCL continues to be exposed to regulatory uncertainty, given that the revenues or transmission charges are influenced by the regulatory framework governing the power sector.The company operates through a cost-plus return on equity model laid down by OERC. Any change or reduction in return on equity or a tightening of the OERC norms could result in lower operating cash flows. Further, any delay in finalization of the tariffs could result in cash flow mismatch in the medium term.

Working capital intensive nature of operations
The working capital management of the company is intensive marked by Gross Current Assets (GCA) of 794 days for FY2025 as compared to 886 days for FY2024 driven by high cash and bank balance and other current Assets. High cash and bank balance of Rs. 1317.81 Cr. in FY25 and Rs. 1238.05 Cr. in FY24 has stretched GCA days. These cash and bank balances are in the form of FD and Flexi Deposits which allows them to use funds as and when required for their operations while interest is earned from fixed deposits (not lien marked). Other Current Assets also stood at Rs. 1223.63 crore in FY 25 as compared to Rs.1405.31 crores mainly high on account of Cash received from Odisha Govt. for DISCOM and other projects. Inventory in the form of Consumable Stores & Spares (Transformers, insulators, circuit breakers) and Construction Materials (Steel structures, conductors, cables, towers) have increased to 141 days in FY25 as compared to 122 days in FY24 because of ongoing projects going for EPC contracts. The debtor days stood at 52 days in FY25 against 41 days in FY2024 is due to mechanism of receiving payments from DISCOMs. Acuite believes that the working capital management of the company is likely to be at similar levels over the medium term due to inherent nature of operations of OPTCL.