1. At a Glance
RattanIndia Power Ltd, once a poster child for leveraged infra ambition, is making a slow comeback with rising profits, debt repayment moves, and a surprising Q4 windfall. But beneath the Rs. 15 stock lies a multi-year turnaround saga worthy of a Netflix docu-series.
2. Introduction with Hook
Imagine a phoenix that crash-landed mid-flight, buried itself under ₹12,000 Cr of debt, and then slowly started shedding liabilities one NCD at a time. That’s RattanIndia Power. Once a part of the mighty Indiabulls ecosystem, this company went from thermal glory to financial purgatory.
- Installed Capacity: 2,700 MW (Thermal)
- Q4 FY25 Net Profit: ₹222 Cr (vs -₹1,870 Cr FY23)
- Market Cap: ₹8,146 Cr at ₹15.2/share
Is this a real turnaround or a thermally disguised trap?
3. Business Model (WTF Do They Even Do?)
RattanIndia Power operates two massive 1,350 MW thermal power plants in Amravati and Nashik, Maharashtra. It sells electricity to state DISCOMs under long-term PPAs, making it a classic IPP (Independent Power Producer).
Core Biz Structure:
- Generation: Thermal only (no RE presence)
- Revenue Source: Sale to State Utilities under PPA
- Regulatory Exposure: High (coal linkage, PPA enforcement)
- Client Risk: State DISCOM receivables = long debtor days (271!)
4. Financials Overview
| Particulars (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 3,231 | 3,364 | 3,284 |
| EBITDA | 738 | 646 | 585 |
| Net Profit | -1,870 | 8,897 | 222 |
| Debt (Gross) | 11,018 | 3,562 | 3,615 |
| Interest Cost | 2,512 | 2,363 | 479 |
Key Observations:
- FY24 had massive “Other Income” (₹10,976 Cr) — likely a one-off.
- Debt repayment visible: from ₹11k Cr to just ₹3.6k Cr.
- FY25 normalized into real ops-based profit. We love sobriety.
5. Valuation
Let’s go multiple styles:
A. EV/EBITDA Method:
- Normalized EBITDA (FY25): ₹585 Cr
- EV/EBITDA median for IPPs: 6x–7x
- EV = ₹3,510 Cr – ₹4,095 Cr
- Net Debt: ₹3,615 Cr
- Equity Value = EV – Debt = Negative to flat
- FV Range (post debt-free projection): ₹12 – ₹18/share
B. P/BV Method:
- Book Value: ₹8.54
- P/B Band for IPPs: 1.5x–2x
- FV Range: ₹13 – ₹17/share
C. Discounted Cash Flow:
Highly sensitive to:
- Coal price volatility
- PPA cash realization
- Debt servicing rate
Final FV Range: ₹13 – ₹18/share
(with tailwinds up to ₹20 on debt elimination + possible asset monetization)
6. What’s Cooking – News, Triggers, Drama
🔥 July 2025: Repaid ₹1,025 Cr NCDs. Major sentiment booster.
📣 Upcoming: Q1 FY26 results on July 23.
🕵️ Drama: 59% promoter pledge still exists. Market remains skeptical.
💸 Other Income Mystery: Q4 FY24 ₹10,976 Cr raised eyebrows. Likely a settlement, asset transfer, or revaluation.
7. Balance Sheet
| Item (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 5,370 | 5,370 | 5,370 |
| Reserves | -9,903 | -1,006 | -785 |
| Borrowings | 11,018 | 3,562 | 3,615 |
| Other Liabilities | 10,887 | 1,640 | 1,596 |
| Total Assets | 17,372 | 9,566 | 9,796 |
Balance Sheet Detox Highlights:
- Debt cut by 67% in 2 years
- Still negative net worth
- Reserves improving from abyss
8. Cash Flow – Sab Number Game Hai
| Item (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | 1,015 | 1,306 | 410 |
| CFI | -5 | -462 | 87 |
| CFF (Debt flows) | -977 | -902 | -440 |
| Net Cash Flow | 33 | -58 | 57 |
Narrative:
- Positive operating cash = Good.
- Financing cash = Massive outflow = Debt repayments
- Net cash turning positive = Financial stress reduction
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 9% | 8% | 9% |
| ROE | – | 5% | 4.96% |
| Debtor Days | 282 | 224 | 271 |
| Working Capital | -803 | 173 | 229 |
| Debt/Equity | Negative | Negative | High |
Takeaways:
- ROCE improving with lighter debt
- Debtors still insane → needs tightening
- Positive working capital now, but margin for error = low
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Sales | 3,231 | 3,364 | 3,284 |
| EBITDA | 738 | 646 | 585 |
| Depreciation | 404 | 382 | 241 |
| Interest | 2,512 | 2,363 | 479 |
| Other Income | 328 | 10,976 | 357 |
| Net Profit | -1,870 | 8,897 | 222 |
Comments:
- FY24 was skewed by one-time Other Income.
- FY25 shows a “clean” P&L
- EBITDA margin declining, watch fuel cost impact
11. Peer Comparison
| Company | P/E | ROCE | Net Profit (₹ Cr) | Sales (₹ Cr) | CMP/BV | Dividend |
|---|---|---|---|---|---|---|
| NTPC | 14.2 | 10.8 | 23,422 | 1,88,138 | 1.80 | 2.27% |
| JSW Energy | 51.9 | 6.5 | 1,785 | 11,745 | 3.39 | 0.38% |
| SJVN | 47.5 | 4.8 | 818 | 3,072 | 2.74 | 1.82% |
| RattanIndia Pow. | 36.7 | 8.7 | 222 | 3,284 | 1.78 | 0% |
Interpretation:
- Market giving partial credit post cleanup
- ROCE = fair, but still below top-tier PSU peers
- Dividend = still a distant dream
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 44.06%
- Pledge: 59% (concerning!)
- FIIs Stake: From 0.3% to 4.95% in 6 quarters = silent validation?
- Retail Boom: 20 lakh shareholders — the cult is alive
Fun Fact:
Company changed hands from Indiabulls to RattanIndia — the name change was the least dramatic thing that happened.
13. EduInvesting Verdict™
RattanIndia Power is the story of how NOT to run a company for a decade, followed by how to slowly walk out of your financial grave. With major debt cleared and actual profits peeking through, it’s a thermal giant in recovery mode.
Yet, 59% promoter pledge is like wearing a tie to a bankruptcy court — doesn’t inspire full confidence. If further clean-up continues, and debtor days fall, this could be a ₹20 stock in disguise.
Until then, keep your popcorn ready and your Excel sheets updated. The saga isn’t over yet.
Metadata
– Written by EduInvesting Research | 19 July 2025
– Tags: RattanIndia Power, Turnaround Stocks, Thermal Energy, Debt Reduction, Microcap Utilities
