Message from CEO

Dear Shareholders,

I reflect on the fiscal year 2023 24 with a renewed sense of pride and accomplishment. We demonstrated strong financial performance and delivered yet another year of operational excellence. This is particularly noteworthy in light of the geopolitical headwinds that led to supply chain shocks and sparked energy security concerns among policymakers and industry leaders worldwide. Despite these challenges, the Indian economy stood its ground, and maintained high levels of economic growth. A conducive policy environment, with a clear focus on economic development, anchored the Indian economy in these turbulent times.

The power sector witnessed record growth, fuelled by the government’s thrust on electrification, urbanisation and industrialisation. India witnessed its highest ever year-on-year growth in power consumption during FY24 at 1627 billion units (BUs), an increase of 7.6% per annum. A robust GDP growth of 8.2% per annum in FY24, helped by a stellar performance of the manufacturing and service sectors, fuelled this demand surge.

The demand for power is expected to touch new highs, with the 20th Electric Power Survey of India projecting electrical energy requirement of 2474 BU by the year 2032. Meeting such massive demand requires a diverse energy mix comprising fuel sources which are reliable, affordable and accessible. Acknowledging the need for reliable backup, the government supported coal production to provide a stable baseload for the grid.

During the year, several policy initiatives were introduced to address the supply challenges and provide new opportunities in the energy sector. Payment security mechanism continued to enforce financial discipline among the discoms, as their dues reduced by 34% to 0.8 lakh crore in March 2024 over June 2022. General Network Access improved connectivity by providing non-discriminatory access to the central transmission network to all power producers. Further, the National Energy Storage Policy and National Pumped Hydro Policy provided comprehensive frameworks for developing energy storage technologies.

As India marches towards becoming the world’s third-largest economy, energy security will continue be a key priority area for the nation. We at SEIL, remain fully committed to play a pivotal role in meeting the country’s expanding energy needs, by providing sustainable and reliable power.

Strengthening performance

Despite the geopolitical tensions and market volatility, SEIL set new benchmarks for operational efficiencies. Through our sustainable and responsible operations, we collaborated and positively impacted our stakeholders - government, discoms, partners, employees, and local communities.

Your company achieved a robust revenue of INR 98,322 million during FY 2023-24, compared to INR 93,886 million in FY 2022-23.

During FY 2023-24, your company bought back 821,424,000 fully paid-up equity shares of face value Rs. 10 each at a premium of Rs. 12.6 per share, amounting to more than INR 18.56 billion. We declared and paid interim dividend of INR 14,470 million to the shareholders of the company.

During the year, SEIL implemented a dynamic coal procurement strategy and built in coal-grade acceptability within our operations. Throughout, we maintained strict adherence to global standards of operations and local environmental protocols. A well-placed risk management approach helped mitigate grade and geographical dependency and ensured prompt response to any uncertainty.

Our prudent coal sourcing and utilisation of various grade and geographical arbitrage opportunities resulted in significant savings against market benchmarks. Strategic coal sourcing helped SEIL to procure off-specs coal up to ~30%, at 1.57 million tons, against the last three years’ average of ~26%, that is 2.1 million tons.

During the year, SEIL secured domestic coal supply through various auctions under Shakti policy. Through efficient operations, we maintained an average plant load factor (PLF) of 86.5%, vis-à-vis the industry average of 69.1%. SEIL achieved domestic coal supply at 96% materialisation of the eligibility, compared to an average of 88% over the last three years. This resulted in substitution of high cost imported coal with domestic supplies, optimising coal inventory levels amid multiple challenges.

SEIL P1 surpassed its energy saving targets and received 22,289 energy saving certificates (ESCerts), under the Bureau of Energy Efficiency’s Perform, Achieve and Trade (PAT) scheme. The total value of ESCerts available with SEIL is valued at INR 48.2 million, considering the minimum trading price of INR 2,165 (10% of 1 MTOE price).

Health, safety, and environment

Sustainability continues to be one of the key pillars of our business strategy that backs our value-creation process. We have collaborated with IIT Madras for a study on carbon capture to enhance clean energy generation from fossil fuel fired industries, deepening our decarbonisation efforts. More than 900 acres of land in and around our area of operations is now under green belt cover, providing a healthy environment to the local community.

We continue to strive to enhance the quality of life of the communities in and around our operations by improving healthcare, promote education, enhancing skills, support decarbonisation, and other community needs. Our sustainability initiatives, such as rooftop solar systems and solar Heaters in Indian Red Cross Socity Cancer Hospital, Vikrama Simhapuri Univercity and anganwadi centers in Nellore, have positively impacted all sections of society.

At SEIL, the health, safety, and well-being of our employees are non-negotiable priorities. We are committed to cultivating a robust safety culture, while ensuring preparedness to swiftly respond to any unforeseen incident. I am proud to acknowledge that the resilience exhibited by our employees allowed us to uphold high safety standards during the year. We achieved 6.99 million safe man-hours as of March 31, 2024, along with a cumulative total of 43.88 million safe man-hours and 33,271 training man-hours by the same date.

Looking ahead

We look ahead with optimism for India’s power sector, as it acts as a catalyst for India’s economic progress. Sustained economic growth, increasing electrification, and fast-paced adoption of electric vehicles will continue the surge in power demand. Government projections estimate the peak power to reach 384 GW by 2032.

Conventional power will play an important role in ensuring energy security and meeting demand spikes. Policymakers acknowledge the need to balance the intermittencies of renewable energy with thermal power to realise the optimum energy mix. To achieve this, the government has encouraged investments to improve private coal production and has also issued supportive policies for developing transmission systems.

Your company strives to set new benchmarks for operational efficiencies and ensure availability of reliable and economical power, in a sustainable manner. Our long-term strategic goals remain guided by our commitment to be vital partners to the nation’s sustainable development. We are confident in our ability to achieve the same, creating value for our all stakeholders in the process.

Acknowledgement

I wish to extend my heartfelt appreciation to all colleagues for their dedicated efforts, and exemplifying our culture of resilience and excellence. I would like to express my gratitude to our stakeholders for their unwavering trust and support over the years. Further, I am thankful to the Board of Directors, for their commitment and invaluable guidance in supporting the company and its business operations.

Raghav Trivedi

Whole Time Director & CEO