Q3 2021 Azure Power Global Ltd Earnings Call
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Yeah.
Yeah.
Ladies and gentlemen.
Good day and welcome to Azure Power Q3 fiscal 2021 earnings conference call.
As a reminder, all participant lines will be in listen only mode.
And that would be and opportunity for you to ask questions. After the presentation concludes.
Sure and he does cause some 70 conference call be Cigna and no Brito My pressing Star then zero on you touched on phone.
Please note that this conference is being recorded.
Yeah.
I know on the conference over to Mr. Nathan Judge from a cheap power.
Thank you and over to you so.
Thank you and good morning, everyone and thank you for joining us.
Last night the company issued a press release announcing results for the third fiscal quarter of 'twenty 'twenty. One ended December 31, 'twenty and 'twenty.
A copy of the press release and.
Presentation are available on the investors section of Azure powered website.
Is your power Dot com.
With me today.
<unk> Gupta really Superman C O O falling from on Agri wall CFO.
And you will start the call by going through several key highlights and then Morley will follow up with and updates on our projects under construction and <unk>.
A logical innovation and and industry update.
Oh and will then provide an update on the quarter with additional discussion on the performance of the quarter and then we will wrap up the call with Rajiv discussed.
Discussing 20 of them and.
Fiscal year 'twenty 'twenty, one guidance, providing initial fiscal year 'twenty two guidance and a discussion of our longer term guidance. After this we will open up the call for questions.
Please note our safe Harbor statements are contained within our press release presentation materials and available on our website.
These statements are important and integral to all our remarks, there are risks and uncertainties that could cause our results may differ materially from those expressed or implied by such forward looking statements. So.
So we encourage you to review the press release, we furnished in our form 6K, and the presentation on our websites on a more complete description.
Also contained on our press release presentation materials and annual report on certain non-GAAP measures that we reconciled and nimble most comparable GAAP measures and these reconciliations are also available on our website and a cause.
And our press release presentation presentations and.
And you'll report.
And with that it's now my pleasure to hand, it over to Roger Eaton.
Thank you Nathan.
And good morning, everyone.
It was that on videos.
This time last year that Covid began strength rapidly across the board.
And it has been truly unfortunate and how to spend back and created so much pain and uncertainty.
Fortunately the lights, but and at the time, the getting brighter with the vaccine and big globally distributed at these peak here.
Here's to hoping that we can all claim victory over the virus on our next call.
Sustainability and ESG.
Key to the success of our business.
And you wont be start every meeting with a discussion of health and safety, which is of Paramount importance.
We would like to start this call by highlighting on ESG accomplishments this quarter.
We are very proud to announce that you obtained the ISO 45000 bunch notification which day.
I'm on streets, as yours, and focus on occupational health and safety.
Given the remote location and five project extreme heat and difficult conditions for construction and operations and its been as the inherent safety risks that come with the large scale construction projects.
This validates age and efforts we make to ours.
Let's see for that deep and bug and contact us.
In addition in December and that's G. I, a leading ESG rating agency and he did Azure is power and I believe for ESG.
And the top quartile of all global utilities.
We believe that we can improve on this week and going forward.
As we walked from some legacy issues that hit.
And just bastian.
Despite the challenges faced during the pandemic the company's operations, what's your view.
And if you have 19% more and make them work stop eating and we did at the same time last year.
On operating assets and performed extremely well and up on me.
And to continue collecting revenues, we even improved AR collections and Doug D. S works on it and cooking days and ended the quarter compared 219 days at the beginning and then.
We had flashed cost and our cash G&A, excluding stock compensation expenses fell by 15% from the same quarter last year.
We had promised to reduce our cash G&A expenses.
By 10% and.
And sorry, 'twenty, one buses FY 'twenty and I'm happy to report that we are on track to deliver on that from this.
And the end of Q3 FY 'twenty, one we are operating with 25% fewer team member and then a year ago.
Growth and on actions to improve it dawns habits attitude and a 26% year on year and increase in EBITDA.
From operating assets and 142% increase in cash flow to equity from operating assets.
Over the last three quarters since you started reporting C. A T.
And you have seen a steady improvement and this metric youku on focus on searching on assets Capex infusion and operating assets.
And that cost and.
Collection of long standing tubes.
All true.
He'd been recent fixtures and $1 billion over the past and months, but have been around 75 million installation and third quarter and year to date.
And the bulk sites and law and between tier athletes Nossa and installation data.
Okay.
On the flip side despite significant progress.
And what tiny P. P is on our four gigawatts for which we have electrical board button on Ppas.
We have not much to report.
And we still remain optimistic that we will have positive news shortly.
And it's a definite movement toward the finish line.
The fact that India beat its peak power demand record twice and the last month indicates a strong recovery is on W. P.
And that enabled this comes to invest and buying power for their future needs.
And we announced before Christmas, we do expect the Rituxan and <unk> from what was discovered when we won the auction about 14 months ago.
Thank your costs have come down and productivity had Susan and significantly during this period.
The government continues to.
Tremendous support to that and go back and picked up.
The honorable Prime Minister has reiterated the government of India and vision of having 450 Gigawatts after labor day and as your operational by 2030.
Many structural changes that are being proposed to the regulatory and policy clean book to enable that's cool.
And the recent budget approximately 40 billion used on those have been set aside for upgrading infrastructure and technology of distribution companies to make them more efficient and improve their physical positions.
And a path breaking change the government had spoken of putting a framework and please bear.
And thereby the consumer could be in position.
Choose their electricity supply and which means there could be and opportunity for consumers to choose clean and lowest cost renewable energy.
With further infusion of equity and sticky solar Energy Corporation of India. The budget signal the government's intent to.
Strength and its support for the RV business.
And my remarks, exactly a year ago.
Luke and about four broad themes that he had stopped you book on.
Strategy transparency actually Cynthia and students.
And the last four quarters, we have booked hard on all four teams.
On transparency has manifested itself and our disclosures streamlining of reporting structure and elimination of EPC margins and a constant outreach to the investor and stakeholder community.
Efficiency and prudence and thank them.
Non strategic to reduction and a cost.
Fooling myself moving towards simplification of internal processes.
Focus on training and human resource.
And we have executed our strategy and it's primarily focused on discipline and capital allocation.
And that status and stomach to below to you a sense.
And then and my admin and module prices at holding from we have stayed away from bidding aggressively patiently waiting for the right opportunities that's been Oh, and I see it when does that it on higher than our cost of capital.
We have time and again.
And once they do that.
And to capital discipline, My kids and get done with scale.
The interest and green hydrogen and growing exponentially storage costs, continuing to decline and increasing efficiency of solar modules. The stage is set for the next one from deep and acceptability of renewable energy across the world.
These are exciting times.
We continue to look flow suggestions from our investors and stakeholders on how we can further improve our disclosures and make it easier for you to understand our business.
With that I would like to turn it over the Memorial day.
Thank you Randy.
Good morning, everybody.
On pages, five and six we provide and update on our projects under construction.
We have overcome many challenges and the level of construction activity has continued to increase new supply constraints.
Hi, and local demand for solar modules and the past six months or so and China, coupled with that I. Thank you on and rising raw material costs and so does that.
And the inability of certain module suppliers to honor that price and delivery commitments despite signed supply contracts.
Having said that we believe we have been able to navigate the prevention.
Daily by leveraging our size and large backlogs and <unk> modules better than many of our peers.
But getting modules still remains a real challenge on.
And on top of this.
We are still.
Not at the level of construction activity, we anticipated three months ago. When we last provided an update.
This is there could be less.
We had anticipated that by fiscal year, and we would have 450 megawatt operation and the final 115 megawatts to be completed by me.
As of today, we have finished 300 megawatt, but another 150 megawatt by physical and is an extremely difficult targets. We do expect that and extension to this unit will be granted and we will not any penalties for delays.
So I think looking at Sam has picked up off the floor and Covid related delays, we have sought the CODI extension from the regulator and forget it and expect to hear from them shortly.
Why it should have been delayed.
Not lost sight of leads to continually improve our business and this fiscal year, we increased our block sizes and it.
The amount of cable needed by using junction boxes and.
And does that and larger table sizes when did your spacing.
And have seen I used in true as we increase the adoption of spring and voters and aluminum cables and implement.
Dry cleaning robots to prevent cash they start to.
To improve our efficiency.
We were practically the first move up and India.
One o'clock modules and a big week continue.
Continuing with our quest to drive efficiency, we are planning to test a pilot of bifacial modules combined with trackers.
Boy flight industry, it's found as much and a 15% increase needed compared to fixed rate mortgages.
Before getting started deploying bifacial modules and I've tried and tried just on fixed project.
And about half of the modules that just on a project.
And is expected to be by patient.
Over the last quarter, we have transitioned.
Operating projects to a new and powerful analytics platform.
We continue to get all that data into a centralized monitoring station and head office, but the driver behind this new platform is the ability to monitor and analyze non performance at the project site, which is a very powerful efficiency improvement too.
Now this I seem to have greater visibility on even minor plant failures and native species alarms and that wasn't just talk not only failures, but even parts of the plant where performance is lower than expected.
Installation of string Inverters and 50% of that just on 600 per cent. Congrats on eight and nine will further help the magics platform provides strength level data out to support localized spigot.
Sticking because it was not only prevent mismatch losses, but will also aid and foster field electrification and this will helps us and improving generation from each and if the operating assets and we hope to see the benefit accrued to us over the next fiscal year.
And it also benefits battery storage and its integration and argon one projects to be future ready to satisfy this from concerns on reliability and Intermittency and.
And the reviews, the dish and penalties.
And anticipation of upcoming wind and solar storage tenders.
Working on development opportunities for heidrick projects, such as solar plus week.
We would like to provide also some highlights of our ESG accomplishments on page page seven and said and Ive mentioned earlier, we didn't get a strong double eight range.
And from MSCI, ESG, and we obtained ISO 45001 certification, which verifies it and go public provides a safe and healthy workplace.
Our carbon free generation avoid at about $2 4 million tons of Seo to equal balance, bringing the total to $8 9 million equivalents since inception.
Net carbon neutral.
We have reduced our water consumption per unit of electricity convicted by about 20%. This fiscal lessons calendar 2019, and about two thirds from calendar 2018 loans.
And now the environment true focus this year is safe disposal, even recycling where possible on the damage modules and we have made very good progress this fiscal on there.
Yes.
On the social side. In addition to the ISO 45001 certification, we have provided about 175000 people with assistance by delivering masks food facility support.
Power and the school and job training.
Also remain actively engaged with the communities in which we uptick on.
On the governance side, we have adopted many policies, including an enhanced health and safety policy and.
And has increased gender diversity on our board.
We're not stopping here and we'll continue to implement best practices to enhance our sustainability.
Looking at industrial and regulatory developments and page eight day.
There is a log jam up about 19 gigawatts of allocated solar projects with elevated but no I would purchase agreement at the moment.
And the last couple of quarters discounts have been.
So you're just not been signing TSH, which secchi, that's so electric solar energy Corporation of India needs in order to enter into Ppas with developers and Citrix.
Clearly the uncertainty around Covid has taken a toll on disclaims editions has been further exacerbated by the recent drop and status just covered during the last couple of solar capacity auctions.
Explain further during much of 2020, many solar auctions cleared and the range of $3 three to $3.78 per kilowatt hour. However, and this past November and December the discovered status for a couple of auction scheduled and I call. It blows up about $2 75 U S cents per kilowatt hour a 20% drop.
On the positive side wherever India has set new records for power demand and twice and the last month, which indicates a strong recovery after months of subdued industrial and commercial activity.
We've got you.
And your button numerous questions from investors about our view of future status pricing, while we do not have a crystal ball. What we do know is that over the next several years there are more projects than that as development capacity and capital to finance It and India at the moment history has shown that these are the history has shown that Europeans and the competition increases but.
Eventually competition moderate you have a leading platform, but some of the lowest cost and the industry and <unk>.
And that has some of the best and lowest cost access to capital.
And there will be many opportunities to add projects that create significant value and the future.
And Europe is in a tremendously strong position with Louise and placed on all four gigawatt pipeline we have.
A strong pipeline and do not have to change and growth we.
We will be patient and disciplined and we will not do projects that do not have their guns about a cluster of capex.
With that I'll be tended to comment or discuss the quarterly results.
Okay.
Thank you Molly.
Turning to page 10.
I don't do simple.
Okay.
Reported operating 198 gigawatt on a P. P on ECB is it.
Which is 8% and then well.
And because of your 2020.
On portfolio.
And he can walk.
And then stemming from the previous quarter.
On construction costs continue to fall and.
And then about 10%.
On yet.
On page 11.
And then looking at the quarter.
Okay, and it used installation by four 6% compared to our expectations on top of it.
How do you feel there shouldn't be I just meant the long term average.
And the news would have been about.
And on it on.
On a 20% year on year increase.
I think just because you need more detail in a few minutes.
And if you're moving but excluding stock compensation expenses.
We can always significantly due to the rising star right on.
You would have been about 15% Lula and.
And the same quarter last year.
I'm going to just keep on stock compensation expenses.
And EBITDA would have been cut.
39 million on it.
On a 21% increase from day.
And quite dead and the patio.
And we haven't reported a net loss of about $2 7 million on it.
Well I think it's about $7 90 day.
I'll take this one last year.
And you back on.
And on pace.
Cash cost what is the what.
And then.
Jason.
K from stock appreciation.
And then about 18 million club journey.
We remain very focused on reducing our costs and.
As we had outlined on this yet.
We are pleased to report that.
And on track to deliver on that on these notes on Google.
About 10% and extended Jamie.
Moving stock compensation expenses during FY 'twenty one.
When compared to FY 'twenty.
One example of call city is the relocation of a hit on it.
And could you just didn't see about $1 billion every year.
When looking out into FY 'twenty.
Do you.
We expect net cash right.
And per Se from me if I could.
Do you want.
And reflecting inflation and an increase in megawatts.
We also had embarked on a day and I'm thinking and you Sidney and.
So fun, we had been able to refinance and about 73 million got it all day.
They have a savings of about 150 to 100 basis on.
On our interest cost.
We are looking on Zika and I'm thinking about how did and maybe five minutes.
And.
And.
The highlight of the day.
And I screen want all USD 500 billion.
That can be sold in 2017, with our pipeline and 5% coupon.
He is now live on.
Based on if you could even reach and the market.
We would expect to be able to realize.
Once this is anything on.
And I need to stock up on just an expensive either.
And this headwind is it on.
Stock compensation expense it will face.
And on G&A.
And it has been modeling that.
And then backed off and see on expenses on our DNA.
He's directly linked to the same thing.
Slide 21.
And you didn't cut about two and a half million.
Thank you.
And he made and yes.
So let's go.
And $3, one day and just talk right.
And below the loss makes loans up 37 2017 startup.
We will have about 800 houses being back on G&A and that need it most.
Both positive and negative.
Given the uncertainty and on collection.
Last weekend.
Yes.
And our ability to improve.
And our DSO.
And just yet.
I'm gonna coach watches and 91 DSO what.
One one day.
Which is better than the 119 days.
When the pandemic first began about day yet.
We continue to make progress and getting back gaming and believe that will be February and the future.
On page 30.
You can see that and we got from up to increase the bulk when do you think you hit on yet.
And that cash flow from operating assets.
And it was about 142%.
Net debt total.
Net income was about one point and you don't see a billion.
And then we talked for the last 12 months was about 172 million.
And there's nothing you didnt Miss that.
And all what are operating on yourself.
Okay.
This is a much smoother.
Oh come on balance sheet.
And they can make that easier.
Any.
We can do that.
Yeah.
And just recently got missing targets, which have yet to produce.
They've got us wondering I think.
Which leads to a review on our balance sheet on page 40.
We had about 100 and.
Cash and cash equivalents and.
And that and it gets to the approximately 1.1.
And how do you mind and fun.
Moving on.
The hidden assets included.
Included in that and take on our balance sheet.
So it'd be netted against that.
And this is really well defined and it can have yet.
And I like it like these bonds.
Before I discuss guidance.
I would like to mention that and that.
Can be used to gain traction stockpiling liquidity and visibility and the leader in the Indian food and industry.
And how do you must be simpler.
And Pete is it that he was a part of at least 25, just talk and dice it.
Now at the middle of the year.
Now what commodity.
So providing them coming to you on that when do you want and love.
And the guidance.
Thank you Bobby.
In February 'twenty and 'twenty, when we had issued a guidance for fiscal year 'twenty. One I have mentioned the caveats are starting to become you're seeing normal vector and no curtailment.
I'm happy to report.
And despite the pandemic, we have hardly seen and eco tailwind across our projects.
And I mean did impact on and decommissioning and continues to impact and construction.
On page 15, and smartly noted because of supply constraints and D needs related to Covid, we now expect to be at the lower end up on our previously provided range of 300 2500 megawatts operations by March 31, Great Day 21.
Performance of our operating projects has improved significantly.
Lord and installation of the sick and this quarter and in fact and diet Yoga date.
Unit for about 5% compared to the 20th athletes and.
Bead on outperformance and do you have and all were expecting to be at the lower and.
All of our previously provided revenue guidance.
For the fourth quarter 'twenty, one we expect revenue to be between 4.335, and $4 45 billion Indian rupees.
And the pls to be between 22 and 23%.
We also provide and.
Initial guidance.
On our operating capacity and expected revenue generation for the next fiscal on page 15.
Turning to page 16, which is a long term outlook at the moment due to uncertainty out on the topics that will be realized without food gigawatt pipeline we have.
Pulling on long term outlook, which included a four gigawatts.
With this.
And we'll be happy to take questions. Thank you.
Thank you very much ladies and gentlemen, moving and I'll begin the question and answer session.
Anyone who wishes to ask a question May press star and one on guitar center and telephone.
If you wish to remove yourself from the question queue, you May press stop and two.
Participants on a closer to us hence that's why I'm asking a question.
Ladies and gentlemen, and people will wait for a moment, while the question queue assembles.
Anyone who wish to ask a question at this time and the please press star and one.
The first question is from the line of Philip Shen from Roth Capital Partners. Please go ahead.
Yeah.
Hi, everyone and thanks for taking my questions like to focus.
Focus initially on the four gigawatt tender and the status there are so.
Specifically.
And with that long term outlook on G. That you were just highlighting a it looks like there's a one year delay.
And so.
With this new timeline.
What do you.
When do you need to sign the ppas by to stay on schedule.
And what is the visibility that you have now.
And in terms of being able to assign a P. P. A with the first tranche.
For the first tranche.
Thank you Brendan.
But that's the most important question that Oh, you know what that is and quantified so and fill the good thing is that a lot of progress has been made by seiki and trying to place the and the Pablo right and like we had mentioned the four gigawatts is going on.
And trenches most likely the first one gigawatt will be police force and then boutique and go Hawks will be placed Nathan and this year.
For the first two gigawatt.
And that's very little traction as laws.
And you know mentioned by Seiki, and a letter to us and which we had mentioned denied zone.
Our 6K filing towards the end of last year.
But like I mentioned in my remarks, just now.
Over the last year or last month, or so we have seen that power demand has come back very strongly and as we get in touch with Turkey, almost on a day to day basis. They are reporting that there is.
Our renewal and sort of inquiries that theyre getting from the distribution companies are signing properties that humans and once again.
And it was very very muted over the last couple of quarters. So that is happening news and also the fact that.
Vicki is has is still alright.
And we're insisting on signing odd megawatts first before signing the megawatts of projects that bush auctioned pools to the manufacturing bid.
Therefore, they are not sort of bypassing that's there and I'm, saying that he has to do with St odd ball, but she's agreements first and won't be Ben David Sainbury meeting properties, which is good news for us.
And so because then you don't really fast and Mike So.
And I'm very positive and we haven't been asked earnings call I mentioned that to be expect the path to the agreements for the first tranche to be signed in January and February.
February is a go on one code and and B B.
And we still have T V clips I don't know, whether we will have something signed and T D.
Alright.
I would think that to be on fairly close to signing some pop which is agreements over the next I would think six to eight weeks so its no longer.
And next quarter, though it makes the next quarter or within the next two quarter kind of thing I I feel and debating scoring at the moment net.
And you should see some progress this quarter.
And as far as the DB is concerned.
Under normal circumstances. These properties agreements would have been signed and in the month of around the month of June and July of 'twenty and 'twenty.
Of course, Covid has caused a D day, alright or between six to nine months anyway on project commissioning of Oh from almost all projects across India.
And if you look at it from that perspective.
You know it's true if you assume that Covid has caused that six to nine months D. Day, then if he signed on as pop which is like and even by March of this year and then you will probably be almost from time compared to what you had originally scheduled for as far as our earlier projects flow to be commissioned and then they were supposed to be a GAAP and been doing as opposed to commission growth.
And the manufacturing gigawatts, so they won't be that big a GAAP really and at least look languished since this time and do you mean.
And that's the whole plan had been shifted six to nine months, owing to the going to the pandemic.
Great Thanks for and she.
And you highlighted just now that the SEC you still and.
Existing and on prioritizing.
Your award and P. P. A ahead of the others can you talk about why you think they're prioritizing.
So and even by day of prioritizing is the is two fold.
And one is of course that this is a very strategic tinder.
For the dumb and so they do want to make goods and that's successful and secondly, because of the fact that realizing that the costs have reduced.
And and module efficiencies and improved overall the cost of energy.
And for us to set up a pause it hasn't news.
And you have mentioned, we have agreed to a data from lockdown right. So once you agreed to and little bit of a downtick markdown that sends a signal to the government also that look these guys are not out to do.
On to Italy and system the day, they spend does not make sense at this point and time line for.
For the consumer so.
That also puts a little bit of a moral obligation on taking to try and place our power pulse because it's not that bad at the moment trying to pace out of power at the.
Price, which is the out of the market like that.
But that isn't the market up to $2 75, a thin and we are looking to place I bought it for since it.
It sounds like that's right I mean, most of the power.
And obviously market to seven type most of the power available and the market is that about the people on city point and fight through the month looking up and differential between people and three to $3 nine kind of Oh, two point back and keep on nine kind of differential.
So because of these two reasons because of and the fact that the odds are open to it that is markdown. So therefore the difficulty.
It is ignored and two places Pablo and secondly, because of the fact that it's a tender because of these reasons. They have been trying to place all of the other first before the place the power which has been auctioned Bulldogs.
Okay. Thanks, as it relates to P. L. F. You guys gave a lot of good detail and your slide deck about the historical peak.
Laughs by quarter I was wondering if you might be able to share how you expect does that peel off.
On the trends.
And by quarter and fiscal 'twenty and 'twenty two.
And then one other question on the <unk>.
Q3, our appeal that if it looks like weather was an issue and may have driven the lower than expected Pls can you share a bit more about what happened in the quarter and is it a seasonal issue that is likely to recur or.
Or.
Do you think it persists.
To Oh.
That's simply the first one is about the 'twenty two guidance rebuilt so it can be broken back on and provide you with.
And with some quarter by quarter numbers, and that's what you would like it so.
Like I have mentioned in my remarks on near to that Oh.
Part of the improvement and P and if it's really nothing but by doing the commute time and in the sense that the across the sector, though.
So D C D C loading has improved and right.
And one of the reasons why he left across the sector and rising is because now people are putting higher do you think capacity behind basically capacity. So on you and if you were doing a 100 megawatt project and you would put 200 megawatts of modules. So and if you were gonna get 19, and 20% deal. If that's the P. And if you would go on to get but as time goes by.
And people start putting kind of maintained percentage of 120% volume and 100 and then.
Megawatts 20 megawatts module behind 100 megawatt DC capacity, the BNS day to day.
And you'll of course has legacy assets right, so and that thing, but that it's we're supportive of 100% Alright AC to DC to AC and then there's industrial and still young. So do you have kept moving projects without in states and van de installation is north.
Total projects, where the a C. D E. Shaw is not you know what it is it's got and keep on it.
Our projects, which we are building to me and therefore, you don't have you been continuing to see and uplift and odd VNS.
As we move forward with projects that you have to construct and can be.
And and read this.
On have I'd expect it to be and a high a high 20% less because of the fact that they have one four times of one five times loading and that and one of the best installation areas.
Yeah.
And because of that odd and solution.
Oh no.
And we'll continue to divest over the next few years.
As far as the third quarter, it's been fun and.
And I'd be extended monsoon and and install them and that's been true. So doesn't do so in the south range, where you had rainfall in the months of October and November typically the monsoon in India and in August and September but this time, we had module and stretching into October and November which.
Oh, that's a quite badly in the months of October and November because of bank on.
The numbers that you know are on North Dakota, and installation and goes months was law. So this is of course up on off trying different even I was looking at between D. O data maybe knock on data over the last two and deal and there have been deals that had been and Boston This and they have been used at a much much better than before and that's why.
From an average or whether it would be have been about 5% and awards from the long term average across the country. This year, if I look at different states umpqua and different states have different numbers, but overall, it's about 5% lower and.
You know some.
Some years it can be fighters and pilots and pilots. So it averages out over the 25 year beauty and better PPA exist.
And one last one and a quick one and hopefully as it relates to our trackers and bifacial you talked about it starting to use them can you share on what kind of trackers, you're using you or are you, possibly using for example, U S trackers like net.
Tracker array or do you think you'll be using other brands and if so what are the names of those trackers are you planning on Oh engagement.
And I take that.
I felt like similarly.
We at the moment as we mentioned be odd.
And with trackers and defense that we have on Testbed and be a piloting several suppliers.
The suppliers. So we have a couple of the big industry names and do you have a couple of small and names as well.
And American company and it Didnt company, a Chinese company and all that and so we know a bunch of you're comfortable with.
<unk> Cracker is good for US we will work with them closely to see if they can be deployed for the next projects.
Expertly and one quick follow up there, what what kind of pricing and makes sense for you guys given the potential performance and.
James do you think it's a five cents of watch or do you think it's gotta be sub five central what.
So this is also dependent on the module pricing range as module prices drop you know the.
Crackers don't make asthma asthma as module prices go up trackers and suddenly start to make sense. So this is a moving number.
Net.
At current commodity prices, which are you know early twenties, correct, there's actually start to make sense, but it picked up commodity prices dropped to 17 and 18.
It doesn't make sense right. So.
Approximately.
Assume.
Six 778 and.
Net price levels and start to make sense.
Got it okay. Thanks for the color I'll pass it on guys. Thank you.
Thank you.
The next question is from the line of Mohit <unk> from Credit Suisse. Please go ahead.
Hey, thanks for taking our questions.
And just following up on the different factors just driving the peer left field.
On the string Inverters bifacial and potentially.
And the truckers.
How should how do we think about the Oh and the long term b and a target over here and.
And he put and shouldn't impact or the C.
And see a fee for the whole chipotle and one gigawatt portfolio.
So and thanks for answering the question on victory one gigawatt of Brookfield.
Most of the modules have been decided and as far as the tracker is concerned yes, didnt, taking the final decision for the last 600 megawatts on the three one gigawatts and bowls.
And it will be and will be made over the next four to six weeks as to how we are you don't go ahead and be though.
And when you mentioned and depending upon on the module will be a close depending upon the.
Cost of trackers, and he will take a call and maybe I'd give them to track with on those two projects.
All right and you know what.
And that of schools and.
So, let's say by the end of March.
Maybe my faith and people know what kind of.
Ah BLS and you can expect from day and I have two points, one gigawatt portfolio because Paul on the phone.
Oh, the 2.1, which is already operating.
On the Pls is expected to be a V for the remaining 454 from the remaining 300 megawatts of that I just on fixed project right.
The module and times and on.
On the way and so on and so we know what the the B and looks like lumpy for the last 600 megawatts.
And can be cleared up and six weeks behind me.
Got it and then maybe just from follow up on that one so the Pls was real feature on imagine into Australia, plus and in FY, 'twenty and 'twenty one on them.
On average for the whole year.
And how should we think about that pls.
And for new projects or the four gigawatts checchi or some of it and new contracts here.
How much uplift do you see and theater for new projects from all these deemed apologies.
So oh.
And the projects that you've been bid the tacos and bifurcation, if he do track loads and by patients and <unk>.
And would be looking at Oh and lead to Midcoast and.
You know and the proteins right, that's the kind of fee and let's see what you get because mono book the 1.5 moving in some of the pipes that we have secured and because some of the best sites and we can.
And get as close to 30%.
You know are very close to 30% kind of number.
You know and as you and by physician and as you and trackers and the uplift what the industry says you have yet like you mentioned you have yet to put up the odd that they've been to go test it and India, but oh.
Across the world and people are saying that there could be between 10% to 20% uplift due to the entry into this.
And due to this trackers and and violation of course, what happens and debt.
As though at least on going into the attractive and bifacial average.
Because of the fact that you know.
Keeping stocks to and clean right Azure pillar.
Increases.
And what happens is that you start to reduce your overall E. C D C moving.
And so but until you see D C moving because if he would suppose habit, 30% BLS and lib dem.
More on the book and you and up 15% on top of that if you go and try and do it could be for final closing non forget 34 point and fight I can flow with me and golf because a lot of things will happen. So the way to do it would be too Ben and again, what's yours E C.
And you see building and bringing New York B and if down.
And maybe Toby one and 32% so day, but keeping losses.
Reduced.
But I think I'm.
Getting upwards of 30% with a manageable thing is it's possible, but we'll have to do the design and figure it out.
With me, but I have to you can add to.
And with that.
Thank you.
Good day.
Got it and it makes sense. So yeah, there's probably some savings on capex from distribution and C. D C loading, but probably somewhat offset by higher.
For a chunk of that.
Yeah definitely beneficial latching on to what to say.
Gotcha.
And just on the broader market here.
So right now and the budget didn't go on it.
Provision we saw was the.
And so on and what goes on northern module and see it.
So anything else, you're expecting from the budget or the.
The basic custom duty, which was.
Previously expected last year, but we haven't yet seen that 20% to 40% and BCD, yet and your expectations on when that could come back and and.
And how that could impact our four gigawatt.
Given the venue and strong argument that the BCD announcements will come and this budget right. Oh you have you have a you would also think that nothing was mentioned about about it so oh right Oh.
But what the Ministry had said.
Couple of months back once a day expects that the BCD and be applicable from first it through 'twenty and 'twenty two so on towards 100 megawatts.
Although the 900 odd megawatts that are under construction at the moment.
Not be affected by that'd be CP.
But of course, the yes the bogey.
Bogie robots.
And the government comes out I would I would be I would think that the the BCD and food.
And and on.
And before the ship modules for their four Gigawatts.
And Mr and then.
And Ian and I missed that the government is coming on and trade is a success, which is like a non data, Saudi and we're just possible mohit that men and and.
And the government is talk from the world coming on do they and I may missed out as soon as you know and by the end of this and this month.
And if the the approved list of modules and manufacturer is that list comes out before the end of February and March and then I think the government might wait to see the impact of this non data video before.
Deciding to put the UCB on top of that.
And thanks for that clarification and I'll.
Jumping on to accumulate.
Thank you.
The next question is from the line of Puneet cooked up from HSBC Securities. Please go ahead.
Yeah, well. Thank you so much for the color.
You know bode well and above the about a big big that six.
And from a person and they say where is it possible to get what that number would be able to decorate cookie based on visibility.
Typically a project if you look at the project level pretty.
The project's unfunded typically.
75.
So and he paid when you put that equally.
Right.
So again.
So the problem comes when you look and do it on balance sheet.
So I guess the balance sheet level.
And where they play a.
And from what you can get the budget limit.
And I guess, if all goes on.
And there is a big part of what our capital structure.
We do have pure equity and we do have a project that we do have some part of some proportion of power.
Equity and be able to.
And to get them up and day to optimize on that.
And he didn't try and get good day and then.
And then Gordon and leadership.
And so.
Local so similar to the operations and then a bit but I would just say just say we've got a number that'd be 10 day.
And we didn't like it probably will.
And we think we'll be fine.
[noise] or not.
And then Oh soggy Victor could you would you be it on balance and did you pay for it.
Okay.
And you said guidance, but yes, we can you can keep it and I'm, hoping we can get back to that because those numbers and.
And he made the part of the power part of our numbers would you be and not have any problem and then getting both calculated and channel.
Okay.
Can you talk a bit more about what is the new cost up there that you on Vicki on it.
And <unk>.
While we all know that.
Ballpark number who is building that had been called.
Who do you send people eat and we have seen that.
Domestic market, giving us cheaper.
Then lucky Liberals and possibly in the Green bond market. If you look at the coupon plus headsets and holding tax that diesel cost.
Oh did a domestic market of course, and I'll, just look like and there's a lot that went live in total.
So that's a big problem, but but but partly it well, let me take months and he's excited about.
And we were getting we are getting much much a finite eight. So for example, the recent finding something that get closed.
It is is that on their own but.
Is that even on he's only and a half question and then you have already closed and that in the next six o'clock. He said on need it and you can look like and pushing so so these are the levels that you see between the acreage and help us and it's something that we're getting the well did he see budgets that will be from.
And what is the opinion of the day.
And is it possible day.
And so these are and so the tenor of the day it is and on 80% of them and even like O P. P. So in and in.
So we did they did it on call. It 13 years to 16, and 17 years depends on at what stage of PPE and IBD financing these projects and so the day.
Wonder if you'd take from banks believe that needs to flow D that is linked to data and C&I, which is typically linked to one here and see that.
But we'll also take a dip coming and project ideas and they talked about it and help us and eight one and two 5%. These that these and these are the needs we can seek some ideas.
Okay.
This is where you're from.
And what can you and Heath you talked about a week from but you didn't talk about deep plan on it.
And then we.
And just talk about the couple of quarters by any update that you'd like to say a dead.
So they're pretty different from <unk>.
Types of assets that we have mentioned in the past 50 lives on.
And looking to divest.
And Oh.
One set of assets.
We have made significant progress and.
And.
And even though.
We'll move forward on that.
And on the second set of assets, which was a.
You know the and assets that we worked on.
We were looking to divest.
We have received some and.
There are some bigger interest as you know the and many market is extremely extremely well.
Hot and India.
Lots of transactions taking place. So there is a keen interest in those assets, but you know at this point in time as we go out and try and figure out how much equity.
Need to fund that future growth.
And if they're getting all the way to selling those assets will be the best and on cost of capital that we can get.
So the decision on the theme of the thick and stuff athletes.
I've been therefore, and I think for the time being we have a VA accounts, who drink and beer.
And it comes time, because he's he built before the pandemic came to be and expected that and we would have stopped and spending money on the phone and you can work projects already.
And the pandemic the infusion of capital for the for on the four Gigawatts is delayed by six to nine months. So odd GAAP ingredients has been delayed by six to nine months. So therefore, they have to and the time and the capsules and they've come down and.
And you wouldn't take a call on whether we want.
And divest those assets and people want to use the money that we need and a differently.
And.
And the good thing is that and like I mentioned day to day use demand put operating assets.
And so therefore and then it would be we can move the discussion, but the people who have shown interest we believe that and all of the work and they're supposed to be done putting balance sheet deposits has been done and if required and we can close the deal fairly quickly.
And then he said the first local places that the view on where to put the rooftop.
That's right.
Okay.
Okay, Great. That's all from me so thank you from them and killed.
Thank you.
The next question is from the line of Joseph Osha from JMP Securities. Please go ahead.
Alright, Thank you and good morning, good afternoon.
I wanted to return a little bit to some of the pricing comments, you made really wrong and that 320 per cent dislocation and obviously things are evolving.
But you always we think about especially dispersed gigawatt would it be fair to just take a.
20% haircut from that that 2.9 to repeat or is that and how we should be thinking about it.
Good morning, Joe.
20%.
Dislocation.
Like I said right I mean, and then be and looked at that pricing.
And and <unk>.
The cost.
And setting up.
Projects that status.
We could not put us and you cannot Ah the numbers from Nevada.
And over the last and one.
Month on month and a house.
Got a convenient and discovered.
More and more people that he talked to and building picky.
Feel that that is perhaps not all of it.
Afflictive parish.
Alright, so if.
And as you know there were a couple of.
Public sector undertakings that had taken and Boston, both auctions and DPC and as J P and L.
And and L C.
And that competition, so and the cost of capital and.
And the cost of debt for these companies is much much lower so when you feed them that you know this.
And the status is not reflective really small scale market and therefore.
You know I don't think there's any question on us.
And we're expecting a 20% reduction and the.
And the and the and the numbers.
Unless and until over the next few weeks and we see a huge.
And again that dislocation and bill and the.
Module market, which makes us comfortable that he has.
And you can still make the kinds of accounts that you were hoping earlier and a big day.
And so that's kind of put it becomes and pricing at this point and time given how does the.
The module pricing is holding.
Clothing, <unk> home and the guidance that we are getting from the large manufacturers on the prices on modules over the next 234 quarters.
And on paint creative so, 20% and be a little bit difficult to accept.
Okay. Thank you and <unk>.
You alluded to your second question and I was going to ask on it seems as if we're short of everything from.
Semiconductors to building materials keep your solar panels each day it sounds good.
The signals you're getting on.
And what used to this type of environment is going to continue for another couple of quarters and is that correct.
That's something to them and that's what I'm schemes that growth.
But you know different genes, but eat up and B I mean today and.
China will amount to 19 gigawatt.
Capacity addition.
And see the prices fall them up.
And because you know the supply and demand is fairly well balanced and strikes out.
And like the oil market right I mean.
That would even reduce the ALDA and 90 million barrels a day and then did you find out over 1 billion battle and so on.
And you'll see the price shock, so it's a little bit like that.
China and uses its a requirement by 10 gigawatt of 15 Gigawatts.
It's possible that the the prices will moderate very very quickly.
At this point in time, as we talk to the larger suppliers.
And that is.
And all of them.
Saying that.
And they expect the pricing to remain calm and till the end of this year.
And Europe, you were kind of on the low point and get the moment.
And India and Youre getting early.
Early twenties.
Delaware and India.
Okay.
And third and final question, and then I'll I'll jump off.
We've talked before and then you alluded just recently too.
And Oh got pricing, a candidate and a quarter eight and a half.
Can you perhaps.
And I know I know I asked about this before.
Yeah, Kate and me as to what it would take for your company and you'd be able to access your weighted debt markets in India, and and what if you could pricing will look like.
And then you can take that.
So it's a question and answer most of the next question no no no problem I was asking on the micro.
Okay.
Yeah.
Yeah.
Yeah they did.
The question was what what would it take them through and you can.
And it basically on a price or what else flow for you on two you'd be able to access and related debt market.
And so Uh huh.
I don't need to ask you about the domestic bond market because I explained in the domestic idea of market have you had to getting rates close are great and helpful.
And Oh that must be banks and this is a this is a day.
And you get to hybrid and fixed kind of the day.
But if you look at that that must be banks that eats on again closer to the seats and 11th but does that floating. So these are really linked to one yet and until that.
And all of it but it does take bond and you didn't get to do it we do have market fun, well rated bonds, which is the typical U W and I loved pedigree and they did.
On sites like back those bonds and also.
It's difficult to get out and monetizing langton of bonds and and then no mistake bucket.
On the mutual funds and other and Mr could look like corporate bonds.
And we look for a political majority box, which is something of yet and the company I'm not very comfortably because they prefer the excuse.
And then when we keep on just getting a lot of cash flows.
Okay. So that's really knock on ideas.
Factors that and you want to stay with advertising.
And that's one of them, but you. Okay. Thanks, that's it from me I appreciate it.
Thank you.
The next question is from the line of most his Sutton from Barclays. Please go ahead.
Hi, everyone and following up on the on some of the comments on tracker and bifacial cases, and she mentioned, bringing down the inverter loading due to clipping and how about adding D. C. Coupled storage to capture that clipping. So you could still have a higher D C loading and not get so negatively affected by clipping, while optimizing and deal.
We're all generation of projects and any thoughts there.
No no absolutely you know when we said we are doing.
Oh, that's bad and we are testing all of this this is very much part of the the first thing that's going on and do you want to get it Eddie.
Both from a perspective on what the future of distribution companies might want and future and for ourselves if the price makes sense to capture them, the extra slipping and and.
And back and back into the game.
Great Great and and.
Panel price has dropped back to let's say, let's say went to mid teens. Even is there a scenario you would increase and further loading beyond one five or is that you know really the most feasible safe equilibrium and you're not comfortable going beyond that.
No at the moment you know, it's it's it's basically the when and.
Where does flattens and then starts to pick up again as you flip more deal.
You grow on line with.
And do you ship cause rates to.
As you increase the loading and you start to flip more and appoint comes with incremental loading of modules and results and and disproportionate clinic. So at the moment it varies between one four and $1 five depending on where it is depending.
And depending on the level of installation and the specific location.
It's also a function obviously on the module price so as the module price drops you can learn more and more so all of these factors on that and and kidney and other technology.
Bottleneck anymore, and but it's going to take much more power.
Just a matter of determining how much you Wanna clip and as you rightly pointed out it's storage becomes a really low then the cost of studies really low then we may just add more D. C capacity and started and if I come back and so that is something we will continuously evaluate.
Great and that makes a lot of sense and a complete shift here really high level thoughts and any any thoughts towards starting to explore options and expanding maybe even on a longer term basis beyond solar perhaps wind or even thinking about you know the hybrid plants over time wind solar storage, maybe through a partnership I totally understand it's a very different.
And process and execution and all of that but any thoughts on on longer term technology focus on the business.
Yes.
The business is you know again, it's it's always driven by what the customer wants our customers as their distribution company and if the customer wants more.
Power, which is less and government and then they will ask for storage and he will give it to them.
If the customer wants a larger on a sort of a.
Hybrid.
Supply source, so that the pls, it's beyond 30%, it's actually and the range of 55% to 60% because when you combine wind and solar you can get higher.
That's what the customer wants we will do that.
We show them.
And they don't have done moving projects before then.
And then Heath and me and Theres a lot on it.
Experience in the country, there's a lot of very good players the industrial and and gets fairly mature. So so we're very comfortable moving into winter.
Great No that's very helpful and and last one from me I may have missed this but any any update on timing of the next time you'd need to raise equity.
To execute on the portfolio I expect it's aligned with final timing on starting on the four gigawatts somewhere but I just I'm sorry.
Sorry, if you said this already but you know any any thoughts on on time and gear.
Oh, sorry, I missed that a is that a part of them and get up on me.
But yes, absolutely that's the question on the timing for the equity raise what's your thought on that.
Yeah.
And it creates is concerned right because alright.
And I do think.
Things that are playing on our mind and volume of course is the abandoned the need and I tend.
Do you actually need this money and that just won't get decided that'd be a you know a tick up more capacity either the four gigawatts or any other.
Auction, that's been part of and you know those from a project.
Projects that we are that would be secured at the moment like Peter mentioned and Bob on one gigawatt. We are fully funded so there could be don't need to go out and raise equity for that.
And.
And the second.
Though.
Is that because the full people walk is coming and.
And then it comes in two months' time it comes and two months time, when it comes and put them on site at the end of the day, we wouldn't need equity for it and the market is fairly strong at this point in time, So should we go out and raise money.
Money right away.
And preparation for and you know for the four Gigawatts and other capacity that Google and have you ever.
Would eventually build so this.
And this is a discussion that we are.
Scott and Keene, having been on the company and and let me have paid and the path that people and not leave money Didnt FY 'twenty, two which means we'll.
And we'll stay true to our.
I guess we are.
I'm not going to raise money and this fiscal but from a show or sometime during the next fiscal we believe it's a very good equity.
Great. Thank you.
Thank you.
The next question is from the lineup on East Coast tough from HSBC Securities. Please go ahead.
Well. Thank you so much different from.
And thanks for the color on the refi all day I'm surprised the Bridgewater.
With me.
And what do you think that the room to improve on the easy from where you guys.
So you know as far as you're concerned.
And one day is evolving.
You can never be a you know fully compliant, but everything at site and its a continuous process and also because unless and until you build that culture of awareness and cleaning cause I you cannot rest on your long it's not Oh, you know I have done money on our governance now I don't need to grant.
But on my safety stuff I don't need to do anything anymore, what I've done for social and stuff that needs to be done and I don't need to do this anymore right. So it doesn't look like that's right I mean, it's a continuous process that I've known for example, we've got the ISO 45 odd and London.
We are continually working with the consultant.
Consulting and with advisors to improve our safety performance. This.
And the field for example would be you started driver training, but I think there'll be a point to the Covid Party.
Company, who do training, but all our driver, but it would be on.
On our rules on their contract drag with all their labs, where he can drag on Delaware and stuff to other projects because we figure out and that's gonna be looked at but it's got and depreciation reports on that.
Driving was coming on could be one of the major risks.
And you know I wouldn't never see that you know we have the best at EOG well, if you don't need to work more and he is b and C. The.
Continually evolving process, we have to continue to be key, but I've, either worked and dropped the ball and.
And we have to keep.
The raising of and keep training to make sure that we have.
And it'll be on the near the top up on me.
And then what kind of costs could one thing would be associated with these thing bill.
And we worked and who use.
It's cool.
On the ESG front are you thinking about the cost of TMT.
Yeah, and then I'll do you think at some point.
And ability.
And then play with learning and the smallpox, but there could be others Edwin.
If you didn't think it'd be worry.
Worry about any material cost headwinds from.
With the improvement and you just feel and not really no not really because the basic set in place right I mean, our governance standard.
And that you do on safety lift up that would be due to a poor environment. It's all in place. It's a question of even bid on any.
And the new.
Our new methodologies and methods, which weakened and coffee business, who make I've worked with and even safer we will do that but overall if you look at the Capex a lot of business.
These costs have been very very small they are insignificant and any day, you know what I mean.
And he is the hygiene.
And have to do it.
So on something that there is an option that we can they can take and ops and called it all and do it if it is less and this amount of money you could not do it if it does more than this amount of money right.
Alright.
So.
I have never seen a E Z as being considered a cost it is always on investment and you you make up for whatever you spent on the eze you'd make up and the in terms of.
And maybe the investors look at to the video and employees.
They are on track to look at it if you would run a ship and services.
As clean and safe you would have more people on that ship and and and often thought the ship right. So I think it's very very important.
It's it's not a it's not something that we can compromise on.
Okay.
Yes.
Second point I wanted to take pause.
Mhm neighborhoods and ability.
All on track and that'd be on the.
And those balance go up.
So as far as me, but it concerns me I don't see any issues with the label or not and seal food months, we have not seen any labor issues on.
Supply constraints on water.
Right.
From from the top.
And on steam and supply.
That kind of thing, but they never really have a you don't want to do it easily but we have not seen anything and any issues and on the supply side also on the non module and supplies.
And to get back to almost normal now, so and whatever but it would delays or whatever and it challenges.
The average happened over the last two or three quarters and.
Covid run its course.
Most of them on and all behind US the module situation continues to remain tight but other than that most of the other thing I was coming on line fairly smoothly and I'm sure David and by the end of this quarter.
Continue to remain but and they're out on the Covid site and we would be.
100% normal apart from the module and situation.
And do them on vineyard.
On the coffee.
Sorry.
And on the mobile side viewed on the go live because it's not on the visibility or is it more of a cost.
So on the.
And I just tons and six project, a 600 megawatt project alright.
We have 300 megawatts operating and MTN and megawatts under construction I don't see any day, new bed, because the modules up and although a lot of that and any module and so full 50 megawatts is already installed for 50 megawatts is on the <unk>.
Either manufacturing or on debate, so I don't see any delays that Florida.
And the picky.
Eat and but it's on nine projects that are insulated from E.
And you have more skus the module and they are a good supplier.
At this point and time, they are saying that they're going to start manufacturing those modules and the month of April and May.
Sure.
And we would have to and you'll have to see the Chinese booked last year over the last two quarters have.
And I'll come back and and US 14, just on the on the supply schedule.
And so far we have seen for the first 600 megawatts things are going and all are going smoothly, we'll have to see how it and built over the next couple of months at the moment.
The Chinese and we are going on there and and people will come back to work both on the 15th of February.
Don't really get more updates.
And as the factory and go back.
Okay. Good.
Thank you.
Thank you.
The next question is from the lineup from upward on the Hunter from.
From Jefferies. Please go ahead.
Hi, and thanks, everyone for the opportunity on this.
One quick question and your notes to accounts and and as I mentioned and all so I think that's already and so on expenses. So could you. Please close on late on the amount.
Yeah, So oh.
You are talking about day or the breakup of the $18 million as yet.
Right.
Yeah, so and so close to close to 90 million pertains to the previous quarter and close to 90 million and it is for this quarter.
Yeah.
Okay got it and if I may ask squeeze and one last question and that there wont be a reduction likely and election body.
And if I say anything about it.
And it will be heard there was on the news items like Canada, life's, probably a and into St. Paul and megawatts and 266 and should we look at that available and they get better.
It's early days, though Oh and.
And definitely because yes, Kevlar now has.
I expressed and intend to sign up to 66, and which was the weighted that between the key auctions.
And I need to auction and between these 50 price Alex you remember to be 30 suspect option and you.
Where do you see auctions and comfortable will be 66 days on so what catalyzed and desk.
200 megawatts out of the large quantity that picky and starting to place to live and not try to find another status.
You'd have to wait for the if you won't be too you know.
And figure out what exactly then the data plan on that.
Okay got it thanks a lot.
Thank you.
Ladies and gentlemen that won't be the last question for today.
On behalf of US here at power that concludes this conference. Thank you on for joining US and you may now disconnect your lines.
Thank you. Thank you.
Thank you everyone.