Q4 2021 Azure Power Global Ltd Earnings Call
Ladies and gentlemen, and.
Good day and welcome to the Azure father fiscal fourth quarter 'twenty 'twenty, 1 earnings conference call.
That's really mindful all participant lines will be and the listen only mode and there will be and opportunity for you to ask questions. After the presentation concludes.
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Please note that this conference is being recorded.
I now hand, the conference over to Mr. Vic gossip and sales.
From Azure Pablo Thank you and over to yourself.
Thank you.
And good morning, everyone.
And thank you for joining us.
On Tuesday evening, the company issued a press release I don't think the guidance for the fourth fiscal quarter of 'twenty.
And when do you want and at March 30, but it's going to go on day 1.
A copy of the price relief and the per.
And patients are available on day, Mr fiction of Azure power.
Right and they drove power dot com.
With me today and when you Cook.
See you.
And when you see Google.
And someone come out and good luck to you.
And then it will start the call by going to a recent key highlights.
What do you have and then follow up with and.
And I'm big on our projects under construction.
Innovation and.
And an industry update.
But when will then provide and update on the quarter with additional discussion and performing from the quarter.
And then moving to ramp up the corn and wheat, Junji computing and frequently do great day, and providing what the 1 effect when people great day.
Maybe I'll open up the call for questions.
Please note our safe Harbor statement contained within our press release presentation materials and available on our website.
These statements are important and you can figure it out to all our remarks.
These risks and uncertainties that could cause our results to differ materially from those expected or implied by such forward looking statements.
So we encourage you to review the press release, we found and this enormous form 6K and presentation on our website for a more complete description.
And also contained and what basically presentation materials and analytical and certain non-GAAP measure net really confined to the most comparable GAAP measure and.
And these reconciliations are also available on our website and.
And the press release and presentation materials.
It is now my pleasure to hand, it over to Dan.
Yeah.
Yeah.
Thank you Rick Ross.
And a very good morning, everyone.
I would like to start today's call offering condolences to everyone impacted by Covid.
We faced the Pandemics ugliest fees and India during April and May 'twenty, 'twenty, 1 and almost no family was left untouched and somebody or the other by Covid.
Good part is that we are now seeing daily infections receipt and not a vaccination drive has picked up pace with over 260 million doses administered debate.
And as yours.
We have stood by our employees and stakeholders.
And the fight against the pandemic and have been following on Covid protocols with vigor.
During the second wave, we undertook a number of initiatives to supplement the medical and infrastructure in and around the areas we operate.
We donated total plus oxygen concentrators to healthcare facilities and the states and so I just can you be cut and not the guy and other states supplied Turkey Bipap machines to a health care facility would be Canadian.
Slide oxy meters, PPE kits masks and other essential and medical items to a number of facilities ask what day requirement.
Within the company to help our team members can be strengthened and that's a bad and it's to respond to medical emergencies ceasefire employees, all day and family members by implementing a cohort based support group procurement of 15 oxygen cylinder distributed across the various sites and books using a number of oxygen concentrators for our own use pleased it's strategic.
[noise] locations.
We continue to retain and support of a qualified medical factory snow for any medical advice to our employees and their family members.
We have also implemented a company subsidize stomach and scheme to support.
The economic needs of our families and kids Affinia unfortunate EBIT.
I'm, especially proud of the cohort based group there and be created a pyramid of contact, thereby reaching out to every team member every day to track day in and day to families have providing help they need it.
Yeah.
The way the team came together and 7 locations to help the team member and his or her out of need was exemplary and truly demonstrated the strength of fabulous.
Sustainability and ESG, our key to success power business at Azure.
We highlighted an ISO 45001 certification last quarter.
Which demonstrates azure focus on occupational health and safety and validates the additional efforts we put in to make out of both basic and C for our team members and contractors.
In December and they see a leading ESG rating agency and he did as you will power that I believe for ESG, which places us in the top quartile of all global utilities, they cover and probably amongst the highest ratings among our peers and the country.
We continue to strive towards improving further on this evening.
I'm happy to report that we have entered into an agreement to sell off and stopped portfolio to radiance renewables, Florida and enterprise value of approximately USD $73 million.
This is the first ever acetate, and Azure and Power's history, and signifies our commitment towards capital discipline by recycling capital into higher return and committed projects.
Continuing with this philosophy I'm happy to report that Azure is seeking to increase size and fight addressable market by falling into other areas of their nuclear energy, especially wind and solar wind and hybrid projects.
We have participated in a couple of auctions already and we'll look to have something more concrete sooner than later.
As the share of renewable energy and the grid and freezes.
We realize that the business and move towards more dispatch of and energy.
And as the industry moves towards providing power to the grid when bin storage will be 2 important technology additions, we have to plan for that portfolio.
I had mentioned in my previous remarks, how green hydrogen and plummeting storage costs and have the potential to disrupt our industry.
Have you had and the process of critically examining our business and growth strategy and see.
Go along that and endeavor to be on the right side of the evolving nuclear industry landscape.
We are continuously evaluating deploying new techniques and technology projects to improve their tons.
Be assured of our valued investors that we will continue to be disciplined and that approach and we keep all of you posted as we take steps in this territory.
So D.
We have 20% more megawatts operating.
At the same time last year, excluding that'll stop portfolio.
Idaho feeding assets have performed grill and.
And not only have we been able to continue collecting revenue during this pandemic, we even improved AR collections.
Our DSO at 116 days at the end of the quarter compared to 122 days at the same time last year.
We have controlled our costs and our cash G&A, excluding stock compensation expenses, and 1 time expenses and the previous period and <unk>.
Least margin any by 8 percentage from the same quarter last year.
We had promised to reduce our cash G&A expenses by 10%.
And.
Fiscal year 'twenty, 1 what's this fiscal year 'twenty and I'm happy to report that we have reported a reduction of 26% and G&A from previous periods, excluding the impact of stock up decision rights.
Growth and other actions to improve returns have resulted in a 22% year on year increase in EBITDA.
Strong operating assets.
And 75 per cent increase and cash flow to equity from operating assets.
Since we started to.
And the reporting Cfe, we have seen a steady improvement and this metric due to our focus on setting out assets.
Capex infusion and operating assets do you think about costs and collection of long outstanding dues.
On the flip side, despite significant progress made by us with the SEC and be able to COVID-19 towards signing property as agreements are not 4 gigawatts.
For which we have a letter of award, but no ppas, we have not much to report yet.
Still we remain optimistic that we will have positive news to deliver shortly as day, there's a definite movement towards the finish line.
In spite of the pandemic.
Power demand recoveries and debate, which would encourage disc ops to invest and buying power for their future needs.
It may be noted that day to day backlog of 15 to 20 gigawatt awarded capacity, which is awaiting DSA to be tied up with the disc ops.
Vicki has been supported by not coming out with any new solar.
I S. T S bid till this backlog is clear.
As the thick and beef has eased we have seen renewed interest in buying power from disc ops.
We have also seen global poly silicon prices escalate and the recent past and it has impacted our supplies and not accomplished and timelines.
Continue to monitor the situation and not hopeful that the recent and trees and places it's only temporary.
The government continues to support the renewable energy sector.
And the real time Minister recently reiterated government for index commitment to climate actions and the G 7 summit and.
And he has been the driving force behind India's vision of 450, Gigawatts of renewable energy operational by 'twenty Cookie.
Apart from the Bush on setting up the and recent assets. The Goldman has been talking about promoting make and India.
There has been talk of measures to encourage solar cell and solar panel manufacturing domestically.
2 important measures and announced in the last few weeks to enable local manufacturing industry.
First was there and position of basic custom duty.
From first April 'twenty 'twenty 2.
It's 40% on modules and 25% on sales.
The other was the notification of the L M and list, which is the approved list of models and manufacturers.
And he project auction after April and 'twenty 'twenty, 1 will necessarily have to buy solar panels that appeal on H and M. M list.
Our current pipeline will continue to enjoy the benefits of possible since our projects for the auctions before day and position of both of these notifications.
Sure the Aspen and the recent judgment by the honorable Supreme Court of India.
All transmission lines and certain regions of Rajasthan and put it up and I've been asked to be converted from overhead bias to underground.
We believe this would be cost neutral to us as we should be allowed to pass through off the same your.
And because of the cost.
Given the turmoil of the last years and.
5.3 and do you want in fiscal year 'twenty..1 has been all about S. We shouldn't see and prudence.
We have invested and that operating projects improved generation and living facilities of IP and remember that site.
We are moving rapidly to deploy the latest bifacial modules and track codes to increase the efficiency of installation and capture on our projects, which are going into construction.
If I look back at this difficult deal.
Some of our achievements that we've been able to keep operating through the various lockdowns and pandemic soldiers.
The book, we were able to do to support our teams and our communities.
That we were able to largely particular tones and under construction projects to COVID-19 induced <unk>.
The sale of the rooftop assets and the patients we have shown by staying away from the temptation of bidding aggressively through the app have been huge successes and very satisfying.
With almost 2 years behind me I look forward to the coming fiscal with great hope and optimism.
We believe and waiting for the right opportunity to own our shareholders that are done and higher than our cost of capital and the philosophy of building a sustainable business rather than simply cheese scale.
We continue to look for suggestions from our investors and stakeholders and 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 to Molly.
Thank you Angie.
On page 5 we provide and update on our projects under construction.
Second leg of Covid cheap severe severely impacting our construction activity not only disrupting the supply chain, but also impacting several of our sites.
The highest local demand for solar modules and the past several months or so in China compared with it I think 1 and and I think that on the COVID-19 costs and the Doctor Didnt module suppliers trying to renegotiate their contracted price and delivery commitments, despite signs and supply contracts and.
The module prices from you or does it at levels and set the scene and 7 years ago. We.
We had anticipated earlier that by fiscal year end and Ah.
And I just saw 600 megawatt project.
We would publish price full 50 megawatt.
And at 115 megawatt finished by me.
However, as a Canadian finished 300 megawatts and FY 2020, 1 and 300 megawatts.
Have been pushed back another photo.
Due to the second Covid related Covid COVID-19 related challenges.
Thanks to the Ministry of new and renewable energy and notifications and weather.
And extension to all projects with commissioning Judy on and off the first day to 1 day.
And expect to incur any penalties for gili.
But the construction work and assign them to it.
After COVID-19 and Covid related delays and whoever.
The second wave of Covid, kitting and strongly and it has again taken a hit after the initial 25 megawatts Commission decommissioned and another silicon hop megawatt project and me and expect another 12 and have to be done shortly.
And that project is expected to be fully commissioned by the end of the calendar year is already in the midst of the monsoon season.
We have sought.
And gate extension from the regulator and procure power.
Getting extension until the end of this financial year. This fiscal year. So you just got a day I'm sorry.
As mentioned in the past, we have made incremental improvements in operations and construction practices to squeeze out and get it done.
And recently Operationalized analytics platform has been instrumental and agenda.
Thank false quicker and leading to lower downtime and district level.
Our ability to target determined and rectify electrical losses getting operation has also been an interest considerably.
And the construction side, we had installed and chocolate based systems and 1 of our projects under construction to come back and that's a increased penetration.
We have provided some highlights about ESG accomplishments on weighted average.
And Keith mentioned earlier, we have got a strong double AA rating from MSCI for ESG and obtain the ISO 45001 certification, which verifies it a short power, providing a safe and healthy workplace.
Oh carbon free generation, so Boyd at about 3 million tons of C O 2 equivalents.
Bringing the total to $9.5 million tonnes equivalents.
Since inception, we need it.
Net carbon neutral.
We have been focusing from a buffet neutrality, having installed 84 groundwater recharge structures across 15 sites. This fiscal.
And other environmental focus this year is safe disposal.
Even recycling variable possible.
Yes image modules and we have made very good progress this fiscal year with 555 tonnes of modules.
And disposed.
We also remain actively engaged with the communities and virtually all day, but support towards medical and health facilities and active and response.
And to make front.
And the governance side.
We're very compliant with the World Bank equator principles and governance standards and glad to see if you see and MTX.
And the other people per directors on the board of independent and with increased gender diversity.
And we introduced policies for human rights and equal employment opportunity, along with diversity and inclusion which highlights our efforts towards upholding the highest governance standards.
We are continuously striving to and implement best practices to enhance our sustainability.
Looking at industry, and regulatory updates and page 7 and that is located.
And looking at solar projects with letters of award, but without power purchase agreements at the moment.
And the last couple of quarters.
The distribution companies have not been standing thesis.
And this has been accentuated by the second Covid deep and falling patents. However, how discipline has protected us from entering at the recently without no deaths.
We expect to developers, who may find it difficult to based projects and the recently bid out.
Look at it given the rising input cost coupled with COVID-19 related delays.
The good news is that overall power demand and India is expected to grown up as a country and we're just from the second lien.
With the challenges and supplies and pricing, we do expect that there should be an increase and status.
Compared to the 1 that's public and that.
Recent first example, we've all been surprised and we shouldn't see hope that span out.
We have seen that there have been keen interest intense competition, followed by motivation and.
We have a few new opportunities such as wind and hydro.
And we assure that we shall keep it for projects and commercially viable status.
We continue to believe that we would be able to obtain to 4 gigawatt PTH and value.
Status.
Which would actually flow contracted pipeline and provide returns above the cost of cash.
With that I'll turn it over the power to discuss the quarterly sales.
Yeah.
Yeah.
And you want me.
Okay.
Sure.
Thank you Ron.
But I think 19 under the 19 megawatt on a P. P. A R D C business.
But just when People's entire day, well do better operating Oh, yeah, it would be cool.
And Paul could you I'll keep talking and 955 megawatts, they mainly stemming from the breach.
And this quarter.
Excluding rooftop portfolio.
Since our last update we have entered into definitive agreements.
And I don't know portfolio and have their total excluding these effects from our portfolio.
Our construction costs have continued to fight and that's like when do you want.
And what about 19% lower than the previous year.
And you're going to pay and I.
But it is Dan.
Looking at the quarter at.
I believe and use continues to increase.
We can sell more of the project.
Some of the channel.
Been affected by the second wave of Covid.
And supply related challenges on volume and as noted that modeling.
I'm, sorry, just to put a stop them from just an expensive and I'd.
And $44.3 million.
Or at least I've seen high and.
Again, 16% increase and news from the same quarter and divide again.
Yeah.
But I think the G&A on page 11.
So that's what I was talking to somebody on and see.
Yeah, you got it all day.
Did you and different there yet.
Cash and even below internal expectations.
And we remain very focused on reducing our cost.
And this again and I'm pleased to report that got you and it was when he takes months and Louis and debating it.
And then looking out into FY 'twenty 2.
I expect that gasoline and distillate is about 10% from my part 21 level.
And the lead affecting inflation, and then increasing and megawatts.
And that's what I'm missing on refinancing apart and about 185 million U S pallet longtime big facility and I'll take it in 1 boot.
And my last 500 million and talent.
Your line.
We expect substantial savings and interest cost once these refinancings completed.
Turning to stock compensation expenses.
Does he have placed and I did.
Stock compensation expense and when they use and hitting G&A.
To help with modeling.
Picked up and selling expenses.
And indeed.
Got it linked to the share price.
For the fourth quarter 21.
And we already but it's all index spent somewhere around $7.7 million.
And I'm only reflecting relates anything from that.
And 47, and 7 and that's from 75.2020.
$2.27.1 day, I don't think <unk> 'twenty 'twenty 1.
Going from or.
But every $1 of Tianjin and stock price and.
Hello and previous quarters.
And you'll have about 800 and talking impact both positive and negative.
Yeah.
We are particularly proud of what I believe you can through already and so despite the challenges just yet.
Our first quarter 'twenty, 1 day, and so 116 day.
It's better than 100, and when do you do them altogether.
We continue to make progress and collecting that agreement and believe that it will be fun and improvement in the future with companies and you've got projects with high credit worthy Counterparties.
And based on.
You can see that EBITDA from operating assets increased by about 18% D&O and yet and that.
Could you come up and do you guys have total was about 55%.
Net debt total operating assets was.
And about 1 point and 1.3 billion and.
And it would be tough for the last 12 months was about 179 million.
And they did this you thought operating metrics from 6.9 T X, which is better than last year to yourself to success.
Finally, looking at day 30.
Balance sheet information.
And we had about 152 million of cash and cash equivalents.
And our net debt stood at approximately 1.1 to 1.9 billion.
And I've had in mind and for those that are calculating all day.
And you can share some $75 million included in other non sits on our balance sheet should be netted against our total debt.
This is directly linked to the foreign exchange hedges, we put in place really did a lot of green bonds.
No I bought simple and need to provide some commentary on our guidance.
Thank you Paula.
In February 'twenty 'twenty, 1 than we had reiterated our revised guidance for fiscal year 'twenty, 1 and I had mentioned the caveats of time become assuming normal weather and no curtailment.
We are not 1.5 per cent loss on our Q4 revenue and 0.5 per cent loss on a fiscal year 'twenty, 1 revenue compared to a predicted number primarily reflecting lower installation due to weather conditions.
Even though we have just started and the recovery path from the second beef as its now really reiterate I remember for the car and physical but we'll keep the market posted and upcoming updates.
For the first quarter fiscal 'twenty, 2 we expect revenue to be between INR.
140.300 million.
And the peerless to be between 23 per cent to 24 per cent.
With this we will be happy to take questions.
Thank you very much.
We will now begin the question and answer session.
Just to ask a question.
And 1 on the telephone.
If you wish to remove yourself from the question queue, you May press star.
And 2.
Participants are requested to use the handsets will asking a question.
Ladies and gentlemen, we will wait for a moment from all the question queue assembles.
Reminder, to the participants anyone who wishes to ask a question you May press star and 1 at this time.
Right.
The first question is from the line of Phil.
Shen from Roth Capital Partners. Please go ahead.
Hi, everyone and thank you for taking my questions. The first 1 is on the the secchi.
4 Gigawatts I know you gave some color in your prepared remarks and in your release, but was wondering if you might have a better sense for when.
The first tranche might get placed.
And what's the timing of when the.
The agreement can be signed there. Thanks.
Thanks and for their questions. So and like you mentioned right. They did some progress over the last 2 weeks in fact, a couple of hearings that were scheduled and the regulatory commissions actually happened over the last couple of years and a couple of weeks and and I'll be happy here that those hearings and thinks about.
So we had to pull that up and it'll be up and the middle of June. So we are and hopefully back to within the next 4 weeks. We should you don't get something signed are also of course trends, it's not the whole thing and things.
The timing from the beginning within the next 4 weeks is lucky at all by section.
Great and Rajiv, Thanks, and have they bought by chance being able to.
Share with you preliminarily, you know how much lower the tariffs could come down by 4 or could be.
You know what do you think it's.
You know do you think you'll be 25 per cent below.
And where you thought.
And you expect the tariffs to come get lower but how much lower do you think they could be thanks.
So like we have said and the path that are you know that it has to make sense for us otherwise we.
And we will not a science. This is an option, which is available to us and a week and hold onto the power to the option for more time and there is no I'd eat any what has to go out and sign because like we have mentioned and gets broken into Boston and the status that had been discovered and the last 3 or 4 months or 6 months.
And I've been Super competitive and you don't be don't believe that we would have liked to participate.
And the market and bold steps and odd dividends, there's actually been a accident right because the market has moved.
And and the wrong direction and that's part of it goes status circumstance.
So and we had the option at some point too.
And look at about that it's up and discovered and signed power purchase agreements most of those status and.
And he had declining at that point, and saying that all status I've not appropriate and ought to be.
And we would and we would rather beat.
And what are the you know the correct Alex.
And I at the moment.
And what has been and what is being discussed is maybe a and you know and 15% kind of flow a reduction from either the status, but the final numbers will be known or leave it and we get the regulatory approval can take some signs that bothers sales you mentioned that distribution company, but rest assured that you have.
Declined and the Pos to sign and at that if it did not make sense and we will continue to do that and still the status makes sense for us.
Great. Thank you for that color and and then on the.
The call earlier, you mentioned are and the potential to get into wind and storage I was wondering if you might be able to share a little more on.
Oh, and the timing of when somebody could be announced and and what the.
Structure of that.
And opportunity might look like thanks.
So that's a very important question and that's a you know tanks and I think because you've been and I've been to hybrid and current and see what is happening is a bit odd muni.
Standalone very small school day standards gets a lot more exploratory in nature than commercial in nature. So we have looked at some of them Vietnam and yet taken part in any of those option because they are very small and exploit because like I said Holy book and others.
And then and solar wind and I'd put it projects that Samsung they had been established and it'll be and has been around and and therefore more than 25 years. So they reported for them establish a market and Morley and I have and have the experience of building more than 1 gigawatt of wind and after you get a life. So.
Therefore, and it'll be a very very comfortable with the COVID-19 there've been talks and had been called different line construction had been operational.
We have taken part in an auction Fort Wayne and and auction for solar and wind hybrid and the last 6 months and there are.
A couple of auctions coming up over the next we understand and the next 4 to 6 weeks. So we will take Boston goes auctions and if you feel like you can find the right that at Veeva.
We will certainly you know like to and win.
1 of those auctions have been both those auctions and build out.
The first line.
All wind solar hydro projects, Florida, what Azure.
Yeah.
Great..1 last question, if I may I'm as it relates to I think trackers and you mentioned that you use your use trackers recently to upset the panel price increases looking ahead do you expect our trackers to be.
First of all what's chocolate did use and then also do you expect the share of trackers and your projects to increase meaningfully and if so could it be something like 50 per cent of your installations or do you think it stays at a.
And meaningful small percentage.
But don't you want me to take that.
Yes.
Right. So you know every project has to be evaluated.
And it's met and Craig's. So currently given the given the panel prices that is met it and considering crackle and so we are doing that and pulled on a power projects as mentioned.
And depending on the tariff depending on the location and depending on on several other inputs each project will be evaluated.
Determined whether a tracker based system makes sense or the traditional fixed it makes sense and on that basis, we've redesigned and so it would be hard for us to do so.
8 percentage for the future.
In terms of which crackle I think we had this conversation deposits wells and we are we are looking at a range of companies. So we are looking at 3 different companies and each of them is.
And it's getting some portion of the contract.
Go ahead and these are big.
And big names of which which are there.
Well you know 1 of them is the medical and 1 of them is Chinese 1 of them is indeed.
Okay, great. Thanks for the color I'll pass it on.
Thank you.
And remind you to the participants.
To ask a question and maybe that style and 1.
The next question is from the line of.
From Credit Suisse. Please go ahead.
Hey, Hello, everyone and thanks for taking our questions.
Richard maybe 1 clarification and he's the FY 'twenty 'twenty 2 guidance of <unk> 17.
17 from 9 to 18.9 billion. So please of revenues.
Could you clarify what does that include sort of scope and not because I think and the April.
Press release, you had and reduce it by 700 million trees.
Uh huh.
And 2 are in the current.
And so.
Our numbers be a you know a b and have included.
Okay.
Oh I'm not supposed to say you're talking about the 17.918, 900, and you have mentioned right.
Yeah, that's right yeah.
17, 218, 2 and it and the.
And the press release, when you and it was the sale of the room from Pennsylvania.
Bob and would you be able to take.
So I'll start.
Got it and then mohit that exclude and stuff like.
This is Lucas.
And your question correctly.
Okay.
Yeah.
And then.
It was 700 million and fire.
Increased revenues versus the guidance from your friends.
And especially as I was I just wanted to clarify that and that's it.
And it's just more.
Projects coming on line under the unexpected or something and so on that yeah.
Yeah.
Do you want to see him and he Oh.
Let me have qualified and a 60 day that these projects because of Covid.
Okay.
And of course and other uses.
And also considering that.
So and you stand pretty you got them all.
What do you seem to kind of same day without reasonable.
Okay.
So and so that is the reason we have top quality.
Good day.
And that's the thing all of the from the thing will happen and possibly maybe in the next quarter.
And then what do you need commodity guidance.
Got it alright, yeah, no, it's all of them in detail and neutral and with you on that and and maybe it's just the other question from my side is just the.
Uh Huh and you're just looking at the Capex.
For the new solar project and this quarter, it seems pretty low compared to what we had.
And the last quarter and last year at least 10% lower my my my.
How do you expect that to trend for the rest of the projects under construction.
Just given module prices have increased off late do you expect any risks to it any.
And any cancellations from the module suppliers and things like that impacting and to.
Capex and the Nielsen.
So you know a.
Very good question so we.
We have negotiated.
Module supply agreements and signed supply contracts with several manufacturers and suppliers. Some of them are being discussed and negotiated because that has been at ice and input costs and we understand that and this is work in progress and some cases, we have sort of a lead to a margin increase in some cases.
The increase and there's a little more than module. So those are still under discussion having said all of this.
If we were to build a new project today I'm not talking about the projects, which are already under construction, which we have spoken off and there's and digitally but any new big then I go from if I.
For the new Big peaks did he is and what places.
And then the project cost would go up by about 10%. However.
However.
That's not something that would impact us directly for the projects under construction, because we have contracts signed and.
And as prices and that is a little bit of discussion around those very specific numbers.
Right and that makes sense. Thanks for the clarification and then maybe just like 1 high level question here and maybe just for you.
So we've seen a couple of assets exchange hands recently, and I didn't mean and mark yet.
And even today international depth and apartments, and then there's no fresh and was taken private so I guess the topic.
Keeping that in line like are you seeing any interest and the prioritization or.
Alright and Ito.
And just from other entities, just given the valuation and the equity market and it doesn't seem to reflect the.
Opportunity I had a few especially.
And my opinion doesn't even include the 4 gigawatts of projects, which I just said.
And the Ppas could be negotiated and the next month or so.
Okay.
This is a very difficult question, Brian and so at the mall.
1 day, there's no thoughts do you have a bug.
Between share holders.
You know all about taking the company drivers and we have seen the share price.
And the last few months, it's like Oh.
And while it was perhaps a little bit to value of the company and at the moment there has been a pullback and oh by the clean energy market and sustainable growth.
And the build out of stocks. So I think this is a this is a but have potentially I believe it and 3 phenomena and we will see the other.
The share price reflect the true value sooner than later I am more confident of that today than I was about a year back today, if you see that liquidity and item and we are trading when he joined the company between 10000 shares a day to day, we are creating and all that.
300000 shares a day to day, so maybe tradeoff moving trip so.
That kind of liquidity, there does come a little bit of volatility, but the trend I believe it's going to be positive and and.
And you know public market and the U S auto and auto billion place and in my opinion and and it'll be we hope to we hope to see a day public.
Alright.
Thanks, and thanks for taking the questions.
Thank you.
Participants to ask a question you May press star and 1.
The next question is from the line of Puneet from HSBC. Please go ahead.
Yeah. Thank you so much cash leaving everybody. My first question is with respect to be World class and your presentation you talked about.
Uh huh.
From a D. C. This is Scott.
And who are the ninth and final.
And when do you want and organized like really where do you think it will be small school.
Again, when you say east coast yourself and golf specific projects right.
Yes.
Uh huh.
It could trend up perhaps by you know.
A few percentage not much but again. These are early days because these projects are under construction and this is a constant negotiation and discussion with our suppliers.
So you know I can't predict what might happen 4 weeks or 8 weeks from now that could be especially from black and given where we are we because we've already signed a lot of our contracts and if somebody negotiation happening.
On that basis, we could probably estimate a few percent increase.
But again.
I don't know what will happen 8 months of donor it doesn't and stuff.
Okay.
And I assume they cut and paste.
Since then.
And there should be strange.
But if you want to look at the current commodity prices and you'll go put out and put a new project with you know a lot of other input costs have also increased so if you look at all of that 1 would wreck and about a 10% increase as I mentioned.
The net income down to 40.
And.
And.
Yeah, I mean, as I said, 10%.
But again you know the the important number here.
Cost per megawatt is 1 metric, perhaps the most relevant metric would be.
And so million units today, because if you are introducing trackers, if they're using other and your technology to improve yield and then the amount of energy generated.
There are a lot of investment, it's probably more of a living as opposed to amount of megawatts installed.
So that's me come into consideration once you deploy better and newer technologies.
And this was interest and.
And once again, including the softball cash because.
And and bedroom and what he was.
Yeah.
No so that as you know and spending discipline.
And so many moving parts and a project called so depending on the choice of craft and depending on the choice of module and the choice of technology of the module itself all of them.
And then.
In fact, the cost so the and there's a it's too.
Get the lowest cost of energy as opposed to the lowest Capex book megawatt what I have indicated and Tim just 10% is you know like for like all else being equal no change and technology no change in anything and the only on account of.
Cost increase on like for like items. However, if you'll go for better technology, and we paid more but you might get back to you right. So that's a constant evolution.
[laughter] and Christmas I was hoping you can't take the capital I E.
Yeah.
Yeah. So if you look at Alabama.
And chip slide.
And the PP&E BB&T has gone up from 95, 9 and 19 million and.
And I wondered I need each 1.7 million net.
So that Delta is something that has been capitalized.
And you compare March 'twenty with its my simple math.
Yes.
And he's like look I don't mean.
Lee.
And billion rupees, but but the.
Well it is being commissioned and is probably half.
And from.
And I like because because commissioning typically are typically go through and get a lot of class B and.
T V.
And then when we commission a so so so it didn't even because he's in COVID-19.
These cafes.
And so that is everybody's debate and reported interest okay.
And then the half billion rupees and ballpark number very unfortunate.
Yes.
And just to put all of this.
Okay.
Buddy doping and hub.
And I've been younger people would be the.
Cost capitalized.
Basic and age.
Is that that and comparison.
So maybe you forgot and you'll have to check the break up exactly how much of the total capex. He's got plays and how much you can sleep at night.
And that number with me, but definitely yes.
And it seems like total increase and glass and that's part of it is oh, there can be some buzzard and Bartleby kids is still under construction and therefore, they're not comfortable and commissioning.
Right.
Okay.
I think there's definitely a cause of it.
My last question and he said.
And so you'll have seen 4 gigawatt and under negotiation.
And it comes up that is still on the credit and mortgage and places do you think the 1.9 and see it isn't nonetheless.
Okay, well, there's a few things.
Okay.
And then and all of our unique and Pixar.
And that's certainly the.
Got it and prices that exist.
All indications if you talk with the polysilicon.
And so you talked to the wafer suppliers and talk to the sales suppliers and talk with the margin Tobias indications of hot and.
And that this is very temporary and our indications are that this is using our starter thing to eat out already.
And my body manufacturers see inventory buildup and so therefore, and we don't believe that this is the continuing trend and that say for example, if the price today is ex like Mark you mentioned that around 10% higher than the water. It can be 15 or 20 per cent.
That is not the expectation.
And you don't expect that normal. So this is going to resume and the next few weeks and we will see a steady moderation and the price of modules as we go towards the end of the beginning of next year.
And so it's free sign like I'm, saying that and poultry beef and fix each time, we have.
She has got lucky and I forget some of our properties that can be maintained.
Most probably to the agreements to be delivered by contract 2 years from now.
And then you are going to be buying more news for those contracts would be 6 quarters hence.
So there is plenty of time, we do not expect that the margin places and.
And this period from Mcadams prices too high of a number we do believe that they will moderate and we don't believe that and this quick time.
And the next 4 to 6 quarters and.
And we believe that it is but that's not possible to see numbers that happened just post COVID-19 right and then suddenly the prices dropped from pre COVID-19 levels.
But I would not be surprised if we are able to see so I think they just pre COVID-19, Netherlands sooner than later and then what would the next people waters, we shouldn't be able to come back to pre COVID-19 levels at least as odd expectation and above cost and it only took us the ball to some extent, but this is and what the market seems to be suggesting this and what the market seems to be telling us.
Yes.
Okay.
Yes.
My last question just interest rate.
And it also helps us.
Do you see any any bottlenecks that sales because it seems to be some sort of.
Is there really.
And it relates to the and both CBS and.
Socket does not cool.
And he made it hard and that you are looking at growth.
And then.
Yeah.
So.
The and Idiots team is Super excited about this portfolio and put a great deal we've got a great deal.
It's a transaction the buyer and seller of both happy so they are already engaged with us.
And I think good operating team and we are very confident and they will make a success of this portfolio.
And that's even better than what we have done and and.
They seem to be very motivated and committed to.
So we don't believe that they wouldn't be and issues that had all these issues and getting some of the C zone.
I'll do some take a bit longer somebody a bit faster, but and you know how and and lake.
And this is 150 megawatt portfolio if it wasn't grown more portfolio it could be 1 bump it seems like anything.
And so it stands up off but this agreement.
And therefore, there you know it does take time to get all the approvals and all the time and all that.
So that's why we have said that it would take to September when he mentioned about.
Contract terms that you have and specifically are there to go from contract zone. Because obviously you know a deal would have to be some contract predictions per rep of bauxite and I've been a situation and then things go south and there could be again, and again and transparent and logged a contractor and they said that but there is obviously and north here because.
Both the buyer and seller and motivated to make this transaction and success.
Yeah, but do you feel you have to get paid for its excellent.
Yes of course, I mean, when the transaction closes and we get paid.
Thank you so much at all.
Thank you.
The next question is from the line of Olivia.
And I Squanto from RBC capital markets. Please go ahead.
Hi, everyone and.
Just wanted some clarification on the fiscal year, 2020.2 guidance so in terms of that guidance.
What is embedded in the guidance.
You know relative to your projects under construction and so what is the timeline for completion for each project that's embedded in your full fiscal year guidance.
I'll be out so, yes, and if you look at the presentation and the earnings presentation.
And it didn't.
If you go to slide 5 because I think I and flight to the projects under construction a bit and we haven't mentioned power.
Aldo and 950 odd megawatts.
And we're likely to be a commission, which is the second half of that I, just kind of plugging that I.
Esports is and that either 9 votes and ballots and projects. So this the 960 odd and billboards and that and you don't really get added to a lot of capacity and and at this time, so if and when a lot. We do on these is that we don't do any of those Oh, we don't do anything else.
And then you should be seeing us at.
And I've guided number by the end of this fiscal and so this is what is the is.
And arcades and I'm not.
I believe this is the worst case scenario for us.
Okay.
Asking is I believe you pushed out.
800 megawatts on rising star and 6 by 1 quarter. So I'm just trying to understand how you can still maintain that.
Same fiscal year guidance, when you've actually pushed out the time line on 300 megawatts. So the reason the L. B day is that it was supposed to be done by May of 'twenty 'twenty, 1 and that's it.
And we should have completed but the second and 200 megawatts.
By now so.
And I was going to happen, obviously, it does not happen to be out and do it already so we expect that if he would get done and the next quarter, but the next part was still part of this fiscal year. So whatever has happened on these projects there had been a slight push on each of the projects that from day compared to last thing on accounts of the fact that we've actively been weighted.
This and work over the months of people and me and bought me and doing so therefore, the fact that we could not do much well it can be scalable and a half months as it there was always going from that they can pandemic Lee.
And because of that everything has been pushed back a little bit, but we still expect that all of these projects and get done and this fiscal year and that's the reason why the Oh by the target is the same the reason there has been a change between the <unk> guidance.
February to now is if you just corrected the guidance for the sale of the rooftop projects and have you had in food and brewpub audits and all we have faced and go to the top of its out otherwise and so I just think around multiple Tony what's been said there is no change that's father's day physical is concerned.
Yeah.
Okay, and then just just to.
And it's starting to keep asking on this day just to clarify.
And the fiscal year guidance.
Is that the amount that you would back and this year or is it a run rate amount exiting fiscal year 'twenty 2.
The installed capacity adds on total first of March 'twenty 'twenty 2.
Yeah.
Okay. Okay.
Okay. That's that's helpful. And then just in terms of and on the hybrid project and the wind project.
How are you thinking about returns on those projects relative to returns on solar only project.
Uh huh.
And market is fairly mature on both the solar wind and been hybrid and hybrid sites. So we expect same and overdone.
On a weighted if you do so another vendor and hybrid.
And the technologies and even on the other players are varied and known but it's already been known and so therefore, we don't expect there to be a differentially and better done what how it helps us really is and to lead it helps us because it increases our addressable market because of the fact that old Navy with taking pocket when Lee and solar options.
And now I'm going to take part and then.
And hybrid and hybrid options also sleep and increases our ability to win projects and the second thing. It does help us and that's because this is where the technologies and it.
And we are looking at higher penetration of renewable energy and the and the.
And the great and as you have seen us off the lows window and when that happens the another good managers have difficulty and.
And slowly it's moving towards it.
And this basketball and renewable energy and when you do this past month renewable energy that can typically happen when needed some sort of storage and battery storage and mechanicals to other jobs or are pumped storage and whatever the storage facility might need and.
And for storage facility to work you need to or you don't typically manage the storage in the morning peak all of them and the evening peak out so the evening because typically you get to the stores get scaled by stolen and the money.
The morning, if sales by when because typically in India.
The solar and <unk>.
And that's you don't get Oh, I get this faster and to be there has been this largely and the night. So that you know and you can actually use the same sort of storage system and use it once a day evening and bumps in the morning. So therefore, there's a very important ingredient.
The basketball power to be successful and India, and we need to be in that space.
Yeah.
Okay great.
Great. Thank you very much.
Thank you.
And I don't know if other questions I would now like to hand, the conference over to the management for closing comments.
Thank you everyone. Thanks for participating and not a conference call and and we look forward to seeing you again.
With available low cost funds and is available.
And any time for more questions more comments and Florida and he went to 1 discussions that you might want to happen.
For clarity and and and anything that you might want clarity on so and look forward to interacting with you more and and and how it breakthrough.
And you go ahead. Thank you.
Thank you.
Ladies and gentlemen on behalf of and sort of barbell that concludes this conference. Thank you for joining US and you may now disconnect your lines.
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