Simplex Castings cuts power costs by a third with 25-year solar pact
Natraj Energy will build and maintain a 5.5 MWp captive solar plant for Simplex's Bhilai and Tedesara facilities. The company expects annual savings of ₹2.16 crore, about 10% of its pre-tax profit.
— 2 earlier stories on Simplex Castings Ltd. →What's new
- Simplex signed a 25-year PPA with Natraj Energy for 5.5 MWp of captive solar power.
- The deal cuts its electricity cost from ₹9 per unit to ₹5-6 per unit.
- The agreement is cash-neutral for Simplex; Natraj bears all development and maintenance costs.
Why this matters
A ₹2.16 crore annual saving is a meaningful boost for a company with ₹21.26 crore in annual profit. The cash-neutral structure removes the usual capital hurdle and locks in a lower energy cost for a quarter-century.
What we're watching
- The timeline for the 5.5 MWp solar capacity to come fully online.
- How the lower electricity cost flows through to Simplex's margins.
- Whether other regional manufacturers sign similar long-term solar PPAs.
The full read
Simplex Castings has locked in a 25-year solar deal that cuts its electricity bill by roughly a third. The pact, with Raipur-based Natraj Energy, covers 5.5 MWp of captive solar for the company's Bhilai and Tedesara plants. The per-unit cost drops from ₹9 to ₹5-6, translating to expected annual savings of ₹2.16 crore. For a nano-cap with ₹21.26 crore in annual profit, that's a 10% lift to pre-tax earnings. The structure is cash-neutral for Simplex. Natraj bears all the upfront development and ongoing maintenance costs. The company's chairman framed the deal as a step toward responsible manufacturing. The core appeal, however, is purely financial. A third reduction in the energy bill, secured for a quarter-century with zero capital at risk, is a clean trade at this scale. The open question is execution: when the full 5.5 MWp capacity comes online and the savings materialise in the numbers.
Questions answered
- What did Simplex agree to, and with whom?
- Simplex signed a 25-year power purchase agreement with Natraj Energy to source 5.5 MWp of captive solar power for its manufacturing plants in Bhilai and Tedesara. Natraj will develop, regulate, and maintain the facility.
- How much will the deal save Simplex, and how does that compare to its profits?
- The deal is expected to save approximately ₹2.16 crore annually by reducing the electricity cost from ₹9 per unit to ₹5-6 per unit. That saving represents about 10% of the company's current pre-tax profit of ₹21.26 crore.
- What is the financial structure of the agreement?
- The arrangement is cash-neutral for Simplex, meaning the company will not bear any upfront capital expenditure for the solar installation. Natraj Energy is responsible for all development, regulatory, and maintenance costs.
- Why is this structured as a captive solar plant?
- The 25-year term secures a fixed, lower energy cost for Simplex's manufacturing operations, shielding it from future grid tariff increases. The captive structure allows Simplex to lock in the savings without owning the asset.
Story so far
All notes on SIMPLEXCAS →- 8 Jun 2026 · 4:33 PM IST Simplex Castings cuts power costs by a third with 25-year solar pact
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