Q1 2021 Azure Power Global Ltd Earnings Call
Ladies and gentlemen.
Good day and welcome to deal should follow Q1, that's like when do you want earnings conference call.
I said the mind.
Participant lines will be the listen only mode.
<unk> opportunity for you to ask questions after the presentation couldn't fields.
Should you need assistance during the fall <unk> signal at all but are you doing by pressing star then defeat audience touched on form.
Please note that this conference is being recorded.
I now hand, <unk> Mr. Nathan judge.
Thank you Oh, what do you saw.
Thank you.
Good morning, everyone and thank you for joining up.
On Thursday evening, the company issued a press release announcing its fiscal results for the fiscal first quarter 2021.
June 30 20 Twond.
A copy of the press release and the presentation are available on the Investor section of our website.
Your power Dot com.
With me today already group that CEO really Super Mania, COO and <unk> <unk> Kumar <unk> CFO.
And you will start the call by go into the recent highlights and comment on recent market trends and auctions.
Really then will follow with an update on our projects under construction and then industry uptake fallen will then follow.
Provide an update on the quarter.
And then we will wrap up the call what frenchie reiterating that fiscal year 2021 guidance.
Well as our longer term got it.
After this.
Opened up the call for questions.
Please note.
Robert Safe Harbor statements contained within our press release presentation materials are available on our website. These statements are important and integral to all our remarks, there are risks and uncertainties caused our results to differ materially from those expressed or implied by such forward looking statement.
So we encourage you to review the press release, we furnished in our form 6K.
And presentation on our web site for a more complete description.
Also contained in our press release, the presentation materials and annual report or certain non-GAAP measures that we reconciled to the most comparable GAAP measures and these reconciliations are also available on our website in the press release presentation materials and I know reports.
And with that it's now my pleasure to handed over to Renzi.
And your Nathan and a very good morning, everyone.
Despite our goal that's real goods would be made in Washington, <unk> 19.
During the time since the last spoke pandemic continues to worsen.
Hot strip best wishes to everyone. During this difficult I NBP vaccine of George can be fine.
Quickie.
Well really no high competed outsourced hectic and devoting you gotta that youre about four weeks ago.
I strongly believe as George is moving into right direction isn't that right Mockups had said I see and that I just can't hold those who follow what it's going to the next level.
As mentioned in deposits.
Continued to be focused on good done much more than megawatts and hope computers out of actions we've taken over the last couple quarters in the coming to you.
Even before I talk numbers document peace tea.
I would like to spend time on I've sustainability I thought.
On the sustainability.
Yes, you used to report.
Recently received recognition as the most 15 <unk> company and the solar energy industry might go in Finance magazine.
The old school deceived of eating upgrade from 15 undertakes as you would is now ranks as the fan base surgical you compete globally.
Did the topped 5% of all utilities by sustained other Dick.
This was the multiple degrees from everything in November and have seen the real Testament to the teams exports for like disclosure on all the good book being done on the golf.
You're not stopping data.
Yeah, actually being applied that'd be expect right and even better rethink by year end, including a more comprehensive sustainable is good it bought by the end of August and implementing new policies on feed him up Association.
Do you want rights.
Lets you do an intrusion.
90 joined the dog falls on climate related financial disclosure become our UN globally come back you can talk.
And we are contributing to the carbon disclosure project.
Given I'd better standing with you de rating agencies combined with recently improved average daily trading volume and the mockup God awful World $1 billion. You believe we will increasingly be eligible for you as GE in basis.
All of which should enhance our visibility but investors.
Looking for strong sustainable companies to investors.
Looking at the company, we have you used to announce a very strong quarter despite challenges of dependent.
The cash flow quick would you see if you from an operating assets grew 45 cents you have to go grew 21.7 billion U.S. dollar.
The benefit this quarter from lower costs, which has been a strong focus of ours since he joined the little or what are you edible.
Well certainly wouldn't it was down 30% compared to the same quarter last year, even though we had operating 21% more megawatts on a D.C. basis.
We continued to be confident about future growth and expect it see activity.
You have altered in 70 million to 210 begins U.S. dollar.
And really a bunch of 7.1 Gigawatts booked for you it's come to you could.
Oh absolutely.
Good and using the midpoint off the present value back would be put up 7.1, gigawatts by $100 million.
About $2 per shares.
$1.75 billion food afflict falling interest rates.
This compares to a current market got off I don't $1 billion.
We now expect it'd be we'd be able to realize it just streets of about 9.5% for new projects.
Given recent pricing and transactions compared to previous assumption that you would realize an average rate of 10%.
Declining based seats and tightening bone do you put out a green bonds and investment grade in didn't renew blue companies bodes well for lower financing costs.
Got it keep watching that does all sort of stones.
I don't 99, <unk> defense acute 50 basis points, nor the greets be so at the beginning off that you.
In fact, BDC keep close to 41 day fully hedged facility that has an interest rate of approximately 8.5% and I knocked down.
Just received a sanction from a lodge Indian Mendo I Didnt get straight to put on 9.5 event and refinanced about $40 million a bit they've been interest rate of 97 cents.
As a reminder, they did a significant uplift sweat equity valuation for Louis districts.
Yes old school do thing I've long film mix, because the Jackson fabric hundred million dollars food cyclical ganged ambition.
Due to our expectations.
No what interest rates.
As many have seen we have received a letter of award for the two gigawatts being two capacity, we had option for as far as an auction be blinded decent but I'm talking to 19.
It is geared at the delays associated with getting the Italy will delay the timing of signing up for P. D.
Shaky has taken big initiative to bundle Pablo from these projects with got into auction event that its shopping by distribution companies.
Once the policy that being said distribution companies I honestly, they did not keep used to be signed sunopta.
This strong political Vin, who get different place has it will you give a tremendous boost to the domestic solar cell and module manufacturing base in India.
The implementation of they've got duty.
Boost they've got some duty and other non that its restrictions such as you have been approved list of modules and and models are all designed to boost India solar manufacturing base.
The 10 Gigawatts of manufacturing gig Sandoz, which includes the food Guild wars, how to honest on off the Fenqi governments plans to propel and get solar manufacturing global leadership position.
The data.
So would you go will follow.
Also makes economic sense as well.
As a reminder, the full giggled walks.
In the states transmission system transmission charges and lost you book that is delayed scheduled to expire in mid 52, NTT I don't get tight enough trust gigawatts of but four gigawatts will begin producing at sweet utilization.
The Delta I its biggest transmission vivo.
This columns would encourage how about the ironed out.
Well you unit of transmission cost.
Depending on the speed, defeating the problem, which makes it that it looked like Pablo <unk> AWS four gigawatts competitor.
You.
The one to be voters units is added to the recent talk so from that God looked at it.
I don't I not.
T six units realized cost a father would actually be.
I don't see going forward to 4.4 rupees per unit.
16 50 percentile.
Hi, not 2.92 per unit that it's put off so gigawatts.
In addition, we would not that many discussions I've been shark of meeting that <unk> purchase obligations for the next several years.
We expect them to buy or did you probably do the visible.
And a blended static.
Im sick, keeping an eye if the as stable as one of the lowest cost auctions.
We will continue to update since as things develop.
As part of our commitment to pursuing Louis cost source of capital.
Also selling assets continues the thoughts is ongoing and all do not have anything toward the Chad what do you continue to believe.
Be able to set the assets veiled before I just like we do you need good and when I beat the market.
As any material change tacos.
We continue to expect <unk>, even not issue any new shares before school dream drink.
The cheapest source of capital.
It's Bob <unk> exports.
Good day.
Most of you have talked board.
Yes, you used the mix Superyacht, saying has joined our board recently as a non executive independent I picked up.
Amongst your expediency has with do you think GAAP it'll be energy projects product instant book with month, Buffett's, helping children in Cambodia and Singapore.
And I spoke with some dominance in sustainability will all be up that addition to Robert Bork.
As of eight we got them do you have been board members of Fitch, six deemed independent and they'll switch to a female.
Looking at page four.
As you have said many times since he joined a little over a year ago, usually made very committed to creating shareholder value.
Supporting this commitment.
Two basic principles to bitch trickier to go too.
Number one on project must on I'd have done a lot cost of capital and number two we will pursue the list cost of Scotland.
We do want to reiterate I.
<unk> commitment to capital discipline.
Simply we will not do any project that does not on that it done or without cost of capital.
The delay in receiving PBT for the full gives the looks had opened up a gap in our construction timeline and be have been decency bidding for new projects.
However, even not been project just about growth feet, well to create well put ourselves.
It is to show that you've only been projects that the conservative assumptions, the Delaware returns that exceed up cost of capital in fact, we chose to not she's after megawatts in a decent docs and that's Easter that God little gone wrong, so that that it's fine up 2.36 per unit.
About 2.1 dollar offence as they expect a good times did not meet minimum threshold.
We recognize that any particular project has a large impact of the company right cost of capital and even been project can undermine investor confidence, but as I was thinking much larger liberation throughout company.
In addition, we won't be bid on projects that had the best Counterparties.
And TPC is tripling, they did and central government owned.
Ricky is also central government don't and has a doubling lots or anything but you're not in Bangalore have the highest ratings of any speech. This column and typically pay their bills within 15 days or less.
It is significant growth potential.
These bodies and be wouldn't be assured prompt payments.
As he does you bidding for new projects.
Do you have been focused on fares <unk>.
Advantages to our competition.
We have identified evidence sites ready can deduce that construction costs, including three expansion of existing operating projects leverage common infrastructure and capitalize on operating and maintenance synergies.
In addition, our access to low cost captain its superior to most all five fios. When she believes will increasingly provides a greater competitive advantage going forward.
Looking at the current market to be rebook highlight that construction costs have fallen pretty meaningfully in just six months.
Module prices have come off around 10% and be a now expecting high school to project cost.
At around 8% to 10% lower than our December expectation.
Along with falling project costs declining each month grades and tightening born gigs bodes well for lower financing costs as mentioned earlier.
So why do you.
Headline data set and even though they make sense as cost the falling itself.
As many of US continue to work from home, we have benefited from being able to talk to our investor in shareholder community. A lot more then when do you were able to travel.
Leaves the rest assured that every interaction is important to us and be try to consider all suggestions and your question. He gets what enhancing value of your company.
We continue to improve our disclosures and should enable you to better understand your company.
With that I'd be possible with them already.
Thank you and you.
Good morning, everybody.
This isn't really hit.
If you see page five a joint business has remained very stable getting to covert 19th in them.
And so far that have been known with either adverse impact from the economic and financial market disruption.
Applause meaningfully operation and have continued to see customers, making payments as normal.
The blondes performance for the quarter has matched expectations. Despite the temporary dropping electricity demand in the early part of it and then they can just loved them.
I'm going to be putting me and despite the constant activity. The month of June and we haven't had any economic downtime related to non covered it pretty fast.
Despite the locked up.
If he suffered oh well related to a plan digitalization of stoppage operations, especially if they don't don't get spending monitoring performed analytics bookmobile cleaning like.
Activity has begun.
And honest under construction projects and we have seen the workforce starting to return to sites.
To a loss called the activity has picked up significantly, though we have not yet back to our targeted activity levels.
However, we are making much better focus.
The Ministry of out has given a five month extension for completion.
And then you've been energy plants in transmission projects, which is an additional two months extension from biffle.
Another important development.
We expect soon.
Line winter onto the machine date wouldn't dates of policy that patients, which dates back which is available.
Which aligns construction program supplements.
Commissioning of evacuation infrastructure.
Oh, the government projects, we are working on.
Expected to be completed by the expected device security and we don't expect to be any do you need a needed penalty book, what would you need to de lever.
So I don't if I missed commissioning of under construction project.
Does not impact revenues, we expect during the 25 year 50.
And he has begun.
At the date of commissioning.
Looking at industry in victory developments in paid six we still see significant demand for new renewable energy in India. Despite recent events.
Well there was nearly six Gigawatts you can just released and five gigawatts of sort of capacity auction.
We did see looked at assist.
Which directly reflect the little construction costs has discussed earlier.
There was a six month extension to the ice tea is wait until June two seater penalty, but the central government has indicated that this would be the find that extension countered.
Related to a full gigawatt pipeline the oldest mesquite, specifically mentioned and if he can follow that up projects would be exempt from any ideas charges for losses, even beyond those you don't duty.
The Central government has also begun disbursements for the $12 billion liquidity infusion ski.
The state utility speed it because the disbursement with would be that came to the getting there just from you see in how do you see a financial institutions of India dozens of India.
Somebody thing that is comps Fortunately I smoke profile, it's better than average so we're not likely to see much benefit from this.
It should provide investors should something that the central government considers timely payment important and we take steps to kind of.
If needed.
Onto duties, if he's got duty as Judy was extended for another year at 14.9% for six months and then to 14.5% for the next six months. In addition, we expected basic custom duty BCD could be impose soon and this would be in addition to the as Judy.
We did not expect any makita infatuated guns on a projects as they have protected by changing loss provisions.
But.
I'm happy to report that we have started receiving payments against SGT deposited by us in that I, just satisfied project and them how to shut the budget Commission last year.
Yeah, so to see payments, but a couple of GST independent there now onto the dish and what the for these projects. These instead of testament to that have robust regulatory framework in place in that anybody sector in India.
In fact, the ministry of Fotis implementing some changes to speed up the process of the company even further.
They're looking to apply standard formula that you're using ambiguity and people that can lead to did a company.
Which we expect me to do so looking after deployment.
And then you'll be piece that is already a standard formula available, which enhances data for everybody.
Unit of extra Capex expenditure duties that qualify for the company and a change in total.
We continue to see lenders willing to increase loans I used to fund as Judy given highest stepped into the company.
With that.
I was doing it.
To discuss the quarterly results.
I'm going to you.
Thank you Emily.
I think they said.
Do I get indeed handy.
Maybe 1008, and then they make a lot.
He is he basis.
We just about anything more than I know, that's like how do they get I'd.
And on the 19 that on a de Bakey, yeah, didnt, even more capacity.
Got it seems like a lucky.
You didn't even density combined with about 116 basis points in Germany, Mike Yeah.
I know you gotta be off about $1 million.
And then they didn't say that duty and yet it's like.
No I think people tend to agree then you come to think like in Lafayette.
Well what must not be slogan.
Then just you know they do youve any longer.
In fact.
You had been since it's not at all.
And if he'd be there's lots of good.
Hi, Bob maybe when given but then more do you see Kathy.
Yes, I don't think probably bit.
Plus.
Yeah. They do you feel good on there do you see on calls as we had outlined earlier this year.
We do continue that you see what if any nonpublic go ahead.
Andy I'll take at least in person.
Right.
Well I think they can't do.
So can you do go we magazine.
Some activities like that so I wonder if you didnt either.
Definitely significantly now what are doing is quite good.
And you're going to [laughter], because they don't yet.
Good hitting.
We do expect that you can see and I'll pick off about $1.4 million. He went up and you indie.
From the first like Rockies consecutive maybe one level.
Have you been seen him some activity back to watch more not Monday.
Oh.
Yes, exactly because they didn't get about $3 million to $5 million.
And because somebody is going to extend in ticking boarded when do you wouldn't be one related to.
Oh got species and I got the block you feel maybe that you guys have people tend to agree there's talk by doing that cutting block that so far.
You didn't all these they didn't yet [laughter] dnbi to be between $10 million in picking back up I couldn't do you want.
I'll give me a function of the shape right.
Good enough for them.
Every $1, increasing that's hitting right.
If you leave it increased by about how come you didn't bother.
Offset it just seems like that's what it ends up 1.4 million <unk>.
Non-GAAP EBITDA was about 42 million.
When do you think that's in the first quarter at all it's got to be Wendy.
Another like I'm not even in the segment. This quarter was the people in 5 million. One. Thank you Todd that we took what do you cannot even I forget.
He said he said I think bill I think back up game by blocking some part of Nixing well not income statement going public.
Yes, [laughter] loss at some point excuse me I don't have a million dollar like look good.
[laughter].
I've got anything you can think it isn't.
I guess means no good I don't.
We need more data knit tops.
Let me begin U.S.
What about making something I've been lucky.
Moving onto Basie.
You did you can say yeah, if he had who yet do you guys give me Woody.
The only thing I think Oh, yeah, he's always finding high something you have to yet completely 717 million.
Most something agree, but it's not good hygiene money.
Another reason was driven by low cost on that they pump.
On page nine.
End of that you've got the.
Yeah, I know it in type one 5 million I'll gasoline huh.
Combined we'd like to 90 90 million of inbound calls.
Thank you.
He's got he didn't have a long agreed to people using.
I'm not concerned that well it could be funding.
You can't do that can't get not you will not be some say before he's getting because he can do.
We'd also like to highlight that you bought heavy but when you get blood Dean bond.
He money that doesn't that any me they sometimes when you're looking under Dodd medium.
Yes, he to some extent calculation.
Oh, My God Bless you loved by 2 billion.
And stuff like our lead on doesn't 5 million guys that he.
I'll, let it and there's an idea we didn't have you might say would you classify them, but I thought I think.
Okay.
That's what I was hoping you can you do continues and we need that don't.
I don't bumping yet.
Yeah, I think I think we'd go down if you don't think out there, but not to be most of my job he's going to be going to do anything you're going to default.
Before I talk to you can look we're going to see you didn't give guidance I want to make a booming.
I'll take a moment didn't just because like vehicle on be okay.
I do you have begun piece is going to the one have you didn't need someone can do you think did last love it.
As you think it's worth it all I don't disagree loved it goes up to about 50.
Give me, though I don't think you're not going to date and 100 Antony me going I think in Canada.
Excluding these two okay. Let me see didn't pay me to have to me.
He was about 10% I'd like to confront fully guarantee and this doesn't doesn't go down significantly as you can say newport's will do because you've got to give you got from Citi.
And then if I'm thinking.
Do you have told happiness nicely.
Because they didn't want gun, there's I think they move who's been under but it isn't Canada.
And once we have gone into bodies.
I'd assume pretty meaningfully.
Oh, no that companies are what the when you come to life Subcommittee on effect when do you want and long term guidance.
Well, what do you like.
Thank you problem.
On page 11, you after you get to anything odd fights many 21 guidance.
At this time as it wouldn't 90% of the revenue.
Is expected to come from projects already company should've been all paid to which have not been materially impacted some to covert 19 pandemic.
Are there any revenue is subject to end plants under construction or competed and completion timelines I got a few more difficult to forecast.
<unk> 19, booby continue to make progress the odd plants under construction.
Without any contribution from plants under construction in and financially or 21.
And when you come up pretty personalities should be I don't I end up 14.62 15 billion.
<unk> second quarter pretty one.
We expect revenue to be between I cannot see 0.2, and 2.4 billion and to be enough to be between 18% to 19%.
Turning to our long term guidance a beach trials.
A couple of things, we would point out.
I've got fixed budget for next year is likely to be lower than fiscal 2021.
Given the timing of finding bdcs.
As a result, we have put into place holder for some projects to be built and quite frankly to all do as stated earlier, we only do good projects that make sense and this place holder is not really a commitment.
This would be would be happy to take questions. Thank you very much.
Thank you very much.
We will now begin to question answer session.
And you want who wishes to ask questions maybe press star one on the touched on done for.
If you Mr won't go set for the question Q you start to.
Participants are the question do you use handsets what asking questions.
Ladies and gentlemen, even read for a moment one of the question give us evidence.
The first question is from line of Phillip Shen from Roth Capital. Please go ahead.
Hi, everyone. Thanks for the questions and.
Congrats on doing some nice provided some nice results in this tough time quick question on the four Gigawatts that you have secured now in other ways.
Can you share the plan for when you expect to sign the P.P. Ace Oh, sorry, if I missed it in your prepared remarks, and then you also talked about a potential construction job.
What are what are what might be some derivative issues that that causes you know how.
How do you expect to manage through that gap or are you able to kind of put people on hold or furlough people and then kind of re harder than back or how do you expect to manage through that.
[laughter].
Thanks, Bill there are very important or Gretchen.
On the first a good question.
The or the problem with the kids agreement it'd be the teams and the way only in at all but to your four weeks ago at less than TV.
So you don't picky on so find them. This is the find them anyway in the 10000 megawatts. So you've got walked a manufacturing tenda. The one that's a month. So at Louisville is let's say keeps talking about thoughts itself. They seem to follow right. So in the fourth crimes. They are you know trying to place more origin.
Actually the follow all the trail Gigawatts that it's supposed to be commission and Twentytwenty two calendar.
We expect that they have just stopping and unfortunately because of spend their money off the distribution companies that also at all because those working from home kind of thing, but normally the thought the big sometimes you get <unk>. Louis normally the thought the 60 month in out of regular Papa good agreements on you know if I'm struck.
Because of the fact that this is a log their capacity and given that this is a pandemic I would think that this will be between seemed to pick month.
From the time, but because it seems.
That is what I expect and because.
It would be would expecting to sign but post the anyway.
Hi June 2020, or so because of the fact that trade all it via the L. Wade caught TV and David the D.V., we expect that there'd be a little bit for gap opening up enough construction steady.
Big basically what happens is that.
In the O'neill plan B, we're expecting a book housing megawatts become sometime in the summer of 2022.
Now going to become the what the later hop off 2022, so betas, maybe a feed for six months or you don't believe it could happen and though in the commissioning off a b so for a set of project.
With that opens up a gap of peak month product and if you can find that I thought.
We will go out and you know and stake blocking all concerned and secure capacity.
We don't it's not that'd be really because you couldn't be busy planning pool gigawatts of capacity.
You know as such we don't really need to put anybody unfold over the Hyatt.
That's all we have a very lean team on the construction site anyway and that that dying would be that allow a huge forcefully safety training and technical training for their bodies management training.
That's a bad for the four gigawatts.
It was not too long enough really brought us to body about it because that's the data the gas and Rican selected that I thought they would be conoco Phillips, that's not a big.
Okay. So that's very helpful. Thanks.
As it relates to the Dsos I know it's related to two specific projects.
What's the the pass to resolving them or it's a extending your.
So as you know substantially and and can you share a little bit of color on the specific situation with these.
Projects and how you expect them to situations resolved.
Hi, So you know and and Ah Ah Ah.
They have dimmock I've inventions to project that 50 megawatts and ER in Hong Kong and how many 30 megawatts in a in cutting in fact, all go by more than 30 megawatts.
A 50 megawatts phases regular euphoric only.
The megawatts that does that was BD in bad 80 megawatts also but I'd say in the month of July and the beginning of August they bought some substantially payments. So therefore, you know maybe I hope reporting, but then but in numbers idea can be anywhere.
Also in school.
She was in companies, Gary Coleman Eskom Beady eye in Ah you know in the if he Oh, you only better get people, who Oh, two or you know that's where the matter.
I'd received so Oh, you know a positive dissolve.
The code five units is now being up sometime in the big name appeal and be up hopefully you get the positives out of it but they can I probably also because they don't we expect the battleships gets resolved maybe towards the later offices here.
And I suppose the code when it comes down that's going to do actually had some payment pieces from bad Bakken some bids from Baird.
From there can do you want to be of working with them to try and get payment like I mentioned, they paid us $2 million just a couple of weeks back and then if you know.
Relationship building, we're building a stronger relationship, but don't forget that they have some fine.
Looking at trying to do I thought is the onto the best thing a company that is a 50 megawatts. It's a very small capacity bought it. They are you know that doesn't dogs that industry issue and that.
Bill pay trying to solve so I'm comfortable that got an article I think I've not the case under control and the over the next month, we will have a better handle them come out.
But the 50 megawatts I'm also confident that I think it can take a little bit longrich would fit into the next year beginning before we are able to put it all on trial, but overall, that's 15 megawatts and by next year, you'll have 2000 megawatts or anything it's a very minutes coupon portfolio, but nevertheless that continues to be are used to <unk>.
There's big Bang for the dog.
Okay, Great a one more if I may as it relates to module pricing you highlighted that it has come down meaningfully in the recent weeks module pricing in pricing in the.
Whole supply chain is actually going higher have you guys started to experience higher module pricing recently and I'm also could you update us on the type of modules you're using these days or do you expect to use for example, any mono PERC modules or did you can see views multi.
Do you expect to maybe use even newer technology modules or in the coming on six to 12 months.
So two questions to fill the booked one yet even a you don't do you have had hog supplies of each el cuatro.
For Oh for changing the the contracts that we have that's he had signs of them over the last couple of weeks. So.
It has been contract it'd be are constructing right now so they need to get those molecules anyway, but for that he had to open and much of.
Well if affects that opens so do you did talk too much in back there in a in another thought there.
Push out I've deliveries by a few weeks because people, including a tiny folks expect different an extra week.
Attrition visit all the CIO, who are yet to be a bit here for a lot of ground from I've no supply it back to be don't think associated just with the temporary shouldn't it to some but supply constraints on the Chinese side.
As far as the volume because until you have a or b, though the projects that we're constructing not all the border book Sporting good walk beacon above.
Do you have shifted.
Due to multiple completely put out anyway, yeah. We're looking at five issue. We're also looking at higher capacity. We just bought an offer yesterday and today I think for 535 or luxottica and body. So typically be them, they're not a huge advantages for the going with the latest technology to be at all.
Looking at what are the best bodies that are they let them in the markets.
I think look given time, and we try and get bookmobiles, but also because if they bring up huge advantages and not to be worth calling out so.
Great. Thank you Roger So I'll pass it on.
Thank you.
We take the next question from the line off.
Luckily from credit Suisse. Please go ahead.
[noise] somebody, but let me call until you.
Hi, Ken you can hear me, yes, yes or no.
Yep.
Hi, everyone. Thanks for taking the questions.
Just one of the psyche, a four Gigawatts project.
Got you can you just talk about the construction cab or.
On the or how much of the employees in the construction of permanent versus temporary and diffuse any third party EGPC or subcontractors someone and see how much of that construction gap would directly impact you what says or some of which could be.
Shared by Youre, a subcontractor partners.
So how many that bothers us subcontractors are concerned really there is a bit it's absolutely no issues at all because we are talking about nishan off the construction of the trend 190 odd megawatts that we're doing now.
And the construction melt Oh, the pool Gigawatts right. So there is that a gap there, which we are trying to pin if we can't so.
You know because obviously once the opportunities even for the full you go what I'm, saying, even accordingly land their construction and the subcontractors and contractors baby.
The Oh I'm going to be about it.
As in vain he needs to deliver the dog.
Oh I thought is that as part of the contract as a company is absolutely absolutely no issue.
The issue like I said, there's only that about between the three to six months.
And you know that is an account.
We're expecting to get our VP is high and the first round by June of Twentytwenty, which means that you wouldn't have to deliver those projects by June of Twentytwenty do now instead of doing that for any do you feel they are you get signed for example in September or October November you'd have to deliver in September October November 20.
22.
Right. So it's not Oh, it's not such a a big deed and be happy.
I I mean, maybe more you can correct me, but not more than freight CODI pool in construction team. So it's not all right. It's not really its aren't really an issue I mean, the idea is not who to get into contract because we want to keep our deemed to be live via plenty of book that you can get I seem to do and like I mentioned, we can get them trained up.
But going into.
Hi, guys that we haven't organization, we have to capital available and it would be the exit from link project and operating costs.
So if there was a gap ended that gap can be spending by projects that meet out of it doesn't meet our cost of capital then we would like to do projects because that's what they do you got to develop have you had been caught and operate father or otherwise there is no real imperative for us.
At all who can that gap.
Okay and then we saw the good news recently on.
The you my searching for 300 megawatt auction for them to be C or things like one or two weeks ago.
Just wanted to see if you have anymore or news to share on that on say the timing of the elevator you'd be on those I'm back ran a.
But I'd be can propose it'd be the something which fills in that.
Three to six men's gap.
Abusing the tourism Tonight.
Absolutely absolutely so in order to get there for that do you have for year over year.
The micro grid. So you know Vietnam ounces, yet because you don't have the it away in hand and data to advance the alternatives handle that and go through the board thought this OCA in PBC and so on and they have to get better and done the problems before they get wasn't it. Louis. So therefore, we haven't announced it has yet but yet you know it's pretty good badly and they could get the p. assigned after that I know us anyway.
And I have to be theater that then yes that project really good Delaware sometime between March Cdtwenty, two could doing pretty 22, which will help I assume that gap that I was that.
That's correct.
Got it and the BP and document is around two point. The reason for did better. So Oh I just wanted to see if that's inline with expectations or or are you seeing more competition on the BP is I was more auctions come on right now.
So maybe you don't because you have to school gigawatts in the right and I got to be about people the megawatts with the expert to compete completion really is there not a big concern for us because that's the thing that's because competition based devices Dom you don't need to go there and.
Probably the door makes sense, but the Vietnam too bad extend Vietnam excited about the competition there for the competition is too high and sizes that out its become on stuff and it wouldn't be the long before we even though you don't even.
Consolidated obligation.
To the competition doesn't bother us walkable does not only is that we want to be other cutting edge up whatever is happening into buckets thing to be obviously, it's if somebody is going to be competitive who'd be 50 price out and be fine, but be I'd want to be competitive only it wouldn't be 60, <unk> due to the problem, but I'd be need to figure out behavior going.
I mean, not using the latest technology job, you're not using the best a you know a best practices of construction lobby is it's a different kind of a you know equipment on site that is the only thing that you have to worry about <unk>.
Keep track competition only to make sure that you're not left behind on the you know the cost of construction of the cost of financing of the cost of procurement, but not for the beacon beat to the completion.
Regardless of what kind of done dot.
So you know that's maybe I've I mean now you don't be Oh. This is that that if he has a bundle auction that.
Make sense, but nothing like the has mentioned in the earnings release there'll be other targeted to do it or co located with another project, which will give us the advantage of costs.
And to make that project Baidu product.
Got it and then just two quick ones from me and then no lead a cushion for others.
The the equity needs for the 2.4, gigawatts or sorry, the capex needs for the four Gigawatts wasn't on 2.4 billion previously and so do you see some improvements and know that do see 8% to 10% improvements in the system cost, which would potentially introduce your equity needs.
For that project.
A quick one just trying to understand the utilization rate so out of 22.1 person's utilization in the quarter on a.
The run rate 1800 megawatts, I mean, <unk> company, you know and discourse on the previous quarter. So that implies like no 900 kilowatt hours of the energy generated so just wanted to see if.
I'm missing anything embed in that calculation misses the a and then she is reported in the quarter. Thanks.
So on the first one Oh my as far as the or does the classics is concerned there is oh, we have not changed that number is yet all right now because it's still.
You know faade into the future, but for sure you don't you are absolutely right B. I figured adoption in the Capex.
And better because it reflected in the fat up step out of that being discovered or in the last couple of Tenda Privy I've interviewed very bullish liberty happy to see that happened and you know we are hopeful that there by the time be dot building. The full gets a lot maybe two quarters from now legal fees that are either positively impact.
And the impact, though medical treatment of equity, but that they need electors the equity.
How does the second part of the question that sometimes I, let me take that question I didn't fully understand what happened what we'd be able to answer that.
Mission, if there was an add on because we did it brought that up 20% plus.
Last.
Capacity utilization, so whatever the and then you've got us wanting to that that is definitely on.
Oh, so I'm just trying to see why you think that might be in the state could be made up I don't know.
If at all I don't think that isn't to say, but if it doesn't mean, they probably correct.
And then we will just one follow up on a.
The interim thanks.
Thank you.
The next question is from divide up the need for Lucky from HSBC.
Just go ahead.
Yeah, Hi, good evening has been questions with respect to be extension dates to duplicate is it a blanket extension, though do you have to go for each of the projects and not for inattention did with respect to could.
So I believe to bring this is a blanket essentially impacted very clearly says that the from the crane piece. So my sort of 24 to August.
For the for these five month.
At the ministries are giving to say extension, which does not require any people book to be submitted by the by the developer Oh I can now I can share, though a in other than beltway I'm with you offline if the if you're interested.
Okay, that's it and.
I couldn't be but with respect to the as TV Mds. These are literally.
How much they might do should this be expecting or so from the off because.
It's been depend upon the as you didn't do you see amount, but for example in case of the Picky project.
You know, they're going to pare back that money over 13 years. He doesn't have anything so I agree here. So we've got some upfront payment for the time that it'll be paid the money in July of two or Augusti lot killed the June but still they don't do is there.
I'm used to be got somebody up front in the month of July and then now every month, so you're starting to get filled energy payment phone.
Really depending from if it is safety benefits. This is a model that you could follow if it to the state and I can get smarter.
No I think it's over a longer period of time, but whatever they can be like you know some money to get every month based inside of a generation or just a feel they add anything.
So I believe status because that extend gokul will take some cities exactly exactly exactly [laughter]. My last question for me you and you said that is all there'd be a and then spent though that if that people have done there's been no. One thing. This is all the all in and spring competitors.
In the last few.
Auction bid is already Oh, there's already a provision that but at least one that could be increase.
And so got pick one megawatt there's going to be a 0.5 sites I increase and the tadic Oh you need to demonstrate Dan is that this is the amount of money even have spent and there's a static so there's no formula that that the yassine domain and they don't get into two or three cents listen that about it's all decline.
So how does this look I mean, there wouldn't be a person's they just back because of these are.
So do be.
You would have to showcase show what does it do the amount that you paid.
That's it.
I would go to pay $100 bought a particular.
At a megawatt off a body I hate how do they do nothing to say $2 mall football is mostly be quickly ex lacks is equal to exercise period.
Great good to talk to my thank you so much of this.
Thanks, Thank you.
Before we take the next question other minded to participants that either press star and want to join the question Q.
The next question is from the line of probably will wash it off.
From Raymond James and Associates. Please go ahead.
Thanks for taking the question. It did two questions from me the first one I bet high level, one or the challenges I know that you are a and everybody else is dealing with.
In India is the unpredictability of locked down policies from state to state. So we can't be Har Har Har strive closure I'd entourage everybody has their own rules that are changing very frequently.
How are you navigating this regulatory complication visa D or project and in some cases getting their workforce.
Actually to come to work.
And I take that.
So yeah.
So you're right there have been you know differences between the states in terms of how their imposing the locked down and what is allowed and what isn't a lot of having said that I think over the last couple of weeks. Most states have started you know oh.
Well, most reducing tough one in 10 days to number you know two or three days I was in moving down no containment Jones, they're using them. So you know most of the factories have started looking now listen as movement has eased significantly in the last four weeks across the country that that is a you're not in case of assignment behavior right. This is some some problem but more.
Yes, we haven't seen how badly affected because most of it projects that are just on all the projects under construction items I, just and I. Just wanted was among the earliest stage to ease the locked up.
As far as our operating assets.
The odd housed in an add on to project itself. So we've not had any trouble over that two opaque the project a in the first of the three weeks, we had trouble moving says that we quickly forget if we had on that and so you know eat we managed to stock up on inventory et cetera. So again, we didnt have too much trouble over there. So so things have us.
Let me back to normal up to some degree of normally see I may say no phenomenons that would be in connect some degree of policy and Oh, we don't hopefully be don't envisage any significant.
So breakdown in the personnel movement of workforce movement of factory production going there.
Okay, and the elderly malls and outlets studies and by the bought a five month extension dry so David.
Innovate that's on a monster any because then the in eastern loss was imposed the 24th of all good because an extra next week I suppose that Peter to find really if you then you don't work.
In fact living okay, but of course, we've been looking for the last two or three month noted from phase, but look has been getting kind of on site and but can you get this full five month, because even beyond locked on the government recognized that they were containment don't do they want discrepancies in various states and doing awfully hard when I said song.
Got it decided month extension.
Understood following up can I ask 'em is there an update on the sale of the micro grid business.
Oh.
Today Huh.
Hello, that's all those questions about the scale up of micro grid business.
An update.
Oh right Tee up.
[laughter], they don't see different doted or six or via the I've, yet looking oh, okay, but he has a about fixing that is why missing because of course, we got that I've been some some sometimes they needed because oh, because if you want because his insight or they they needed to conduct their due diligence.
No I come I paid all told me. He didnt, we don't have any equally need gone in and you get busy.
We had on thinking about a one time do you get the disease and end up.
It's a holding Dan let me think anyways it can be done so a lot because that's not to comment on this.
They can only say that Ah, yes seemed very good and.
And.
That ends up being some bad debt during the season does buses these long, but just thinking or somebody got excited because of a because of a public situation.
So what else you can come in they possibly can get money, there's before oh, we need to be everything he can quite somebody.
Got it thanks very much.
Thank you very much.
That was the last question in queue.
On behalf of fresh ore problem, you can do this quarter inch.
Thank you for joining us ladies and gentlemen.
You may now disconnect your lines.
Very much thanks, everyone.