Support from the government of West Bengal

WBPDCL is a wholly owned undertaking of the GoWB and a strategically important entity of the power sector infrastructure for the state of West Bengal. The ownership structure provides adequate financial flexibility. It is also the nodal agency of the government for undertaking power generation activity in the state. Being a power generation company, WBPDCL is mandated to ensure the generation of power from its installed capacity and supply the same to WBSEDCL. WBPDCL's credit profile 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.
Acuite believes that WBPDCL, being a 100% undertaking of GoWB, shall continue to benefit from the financial, operational and management support as and when required. The GoWB has demonstrated financial support by way of loans to WBPDCL on a regular basis. Any changes in the ownership pattern of WBPDCL or any event that impinges GoWB's overall credit profile shall remain a key rating sensitivity.

Steady business risk profile
WBPDCL reported a marginal increase in revenue to Rs.11,682.31 crore in FY2025 from Rs. 11,471.19 crore in FY2024, supported by improved operational efficiency reflected in a higher Plant Availability Factor (PAF), enabling full fixed cost recovery. However, performance moderated in FY2026 (estimated), with revenue from operations at Rs. 10,807.47 crore (excluding late payment surcharge and other income), impacted by outages at the Sagardighi plant and backing down of thermal generation amid increased availability of lower-cost solar power in the market. Despite this, profitability remained supported by the cost-plus tariff framework, with EBITDA margins at 18.56% in FY2025 and 14.06% in FY2026 (estimated). The company’s business risk profile continues to be supported by increase in installed capacity through increased reliance on captive coal.

Assured Offtake account on PPA

There is a power purchase agreement between WBSEDCL and WBPDCL for 15 years up to 2035. As per the agreement, the entire generating capacity of WBPDCL is allotted to WBSEDCL. WBSEDCL shall purchase such power as per terms conditions set forth in the agreement. Acuite believes that going forward the long-term agreement will continue to ensure assured offtake of the company and provide comfortable revenue visibility.

Inbuilt ‘cost plus tariff’ structure

The billing of generation charges of WBPDCL are regulated based on the Annual Revenue Requirement (ARR) under ‘cost-plus’ based tariff mechanism. The regulator, WBERC allows a post-tax return on equity of 14 per cent and other uncontrollable expenses are allowed to be passed through in tariff through Annual Performance Review (APR) process. Acuite derives comfort from the cost-plus based tariff mechanism.

Moderate financial risk profile
The company’s financial risk profile is marked by a strong net worth base, moderate gearing and average debt protection metrics. The tangible net worth of the company stood at Rs. 9541.11 Cr as on 31st March 2025 as against Rs. 9251.48 Cr as on March 31, 2024. The improvement was noticed on account of accretion of profits to reserves and introduction of additional equity worth Rs. of 360.87 Cr infused by the Governor of West Bengal. Gearing of the company stood at 2.42 times as on March 31, 2025, as against 2.21 times as on March 31, 2024. The Total outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 3.54 times as on March 31, 2025, as against 3.54 times as on March 31, 2024. The average debt protection metrics of the company is marked by Interest Coverage Ratio at 1.96 times as on March 31, 2025, as against 1.88 times as on March 31, 2024, and Debt Service Coverage Ratio at 0.52 times as on March 31, 2025, as against 0.53 times as on March 31, 2024. The company being a 100% undertaking of GoWB, shall continue to benefit from the financial, operational and management support as and when required. The GoWB has demonstrated financial support by way of loans and grants to WBPDCL on a regular basis which Acuite believes will be sufficient to fulfil the debt repayment obligations. Net Cash Accruals/Total Debt (NCA/TD) stood low at 0.05 times as on March 31, 2025. Acuite believes that going forward the financial risk profile of the company will improve backed by increasing accruals.

­Intensive working capital cycle

The working capital cycle remains intensive marked by high Gross Current Assets (GCA) of 694 days as on March 31, 2025, as compared 676 days as on March 31, 2024. The GCA days are high on account of high debtor days and other current assets. The debtor days stood at 365 days as on March 31, 2025, as compared 270 days as on March 31, 2024. The payments are stretched from the only customer WBSEDCL. The other current assets are high primarily due to the high regulatory assets in the form of fuel cost and fixed cost recoverable. However, the inventory holding is comfortable at 53 days as on March 31, 2025, as compared 99 days as on March 31, 2024. Acuite believes that the working capital operations of the company will remain almost at the same levels as evident from stretched collection mechanism and high regulatory assets over the medium term.

• Continued improvement in the operational performance with better PLF generations.

• Increase in EBITDA margins above 21%

• No further elongation of receivables and timely recovery of delayed payment surcharge

• Significant increase in debt fund capex thereby affecting the financial risk profile.

• Any financial impact arising from the arbitration with Ujaas Energy Limited