Q2 2025 ReNew Energy Global PLC Earnings Call
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Speaker Change: Thank you for standing by and welcome to the Renew Q2 2025 Earnings Report. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Anas Shahi. Please go ahead.
Anas Shahi: Thank you. Good morning, everyone, and thank you for joining us.
Anas Shahi: We did put out a press release announcing results for fiscal 2025, second quarter, ended September 30th, 2024, last night.
Anas Shahi: With me today are Sumant Sinha, our Founder, Chairman and CEO, Kailash Vaswani, our CFO, and Vaishali Nigam Sinha, Co-Founder and Chairperson, Sustainability.
Anas Shahi: After the prepared remarks, which we expect will take about half an hour, we will open the call for questions.
Anas Shahi: Please note our safe harbor statements are contained within our press release presentation materials and materials available on our website.
These statements are important and integral to all our remarks.
Anas Shahi: There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements.
Anas Shahi: So, we encourage you to review the press release we furnished in our Form 6K and the presentation on our website for a more complete description.
Anas Shahi: Also contained in our press release, presentation materials and annual report are certain non-IFRS measures that we reconcile to the most comparable IFRS measures.
Anas Shahi: And these reconciliations are also available on our website in the guest release, presentation materials, and our annual report.
Sumant Sinha: It is now my pleasure to hand it over to Sumant, who recently featured in Time's list of 100 most influential leaders driving business climate action. Over to you, Sumant.
Sumant Sinha: Yeah, thank you, Anand. Good morning, everyone. Good evening or good afternoon. I'm glad to have all of you on our earnings call.
Sumant Sinha: Before we get into our business, let me take note of extreme weather changes that we continue to see globally, underlining the urgent need to deliver sustainable sources of clean energy.
Sumant Sinha: From forest fires in the U.S. to flash floods in Europe or the soaring AQI levels in northern India which we are currently experiencing, we see more events that indicate that climate change is for real.
Sumant Sinha: Renew, of course, is doing its bit to fight this enormous challenge by changing the energy mix of India, the most populous country on the planet, with a growing energy demand and no alternative sources to fill the demand-supply gap.
and Sumant Sinha.
Speaker Change: Having said that, let me now turn to updates from our business.
Speaker Change: I am glad to inform our investors that we are on track to deliver the megawatts and accretive growth for the current fiscal year, along with expanding our contracted pipeline.
Speaker Change: We continue to strive towards reducing costs and building efficiency in our operations.
Speaker Change: Among all our peers, we have commissioned the most renewable energy megawatts in India in the first six months of this fiscal year.
While our share price movement has been affected...
Speaker Change: As all of our business and operations are linked to the Indian economy, that is in fact expected to grow at more than 7% this fiscal year.
Speaker Change: Turning to highlights for the quarter, we have commissioned 860 MW to date in this fiscal year and are on track to meet our guidance of installed MW.
Speaker Change: In addition to the 860 MW commissioned so far, there are another 350-400 MW that are currently installed, which should be largely commissioned in the third quarter.
Speaker Change: Our total operating capacity net of assets that we sold in the last fiscal year grew by approximately 30%.
Speaker Change: Our total portfolio in absolute terms grew by about 18% and would have been an even higher 21% after adjusting for the 400 megawatts that we sold last year.
Speaker Change: including the approximately 700 megawatts capacity signed in October of this year
Speaker Change: We have been able to sign PPAs for 2.9 gigawatts of renewable energy capacity in the current fiscal year Extending thereby our current portfolio from 13.8 gigawatts in September 24 to 16.3 gigawatts
Speaker Change: that does not include 900 megawatt hours of battery storage capacity that are part of our complex projects.
Speaker Change: So, just to say again, our current portfolio is 16.3 gigawatts of contracted capacity, including to that another 900 megawatts of battery storage capacity, which is in addition to that.
and Kailash Vaswani.
Speaker Change: Turning to our financial performance, we reported a 14% growth in our adjusted EBITDA this quarter, driven by cost optimization.
Speaker Change: In addition, we had a 31% increase in profit after tax, primarily on account of lower G&A and lower finance costs, and Kailash will cover this in detail in the finance section.
and Sumant Sinha.
Speaker Change: Our 6.4 gigawatt solar module manufacturing facilities are now fully operational.
Speaker Change: I am delighted to announce that recently our cell facility has started trial production of cells as well.
Speaker Change: While it is expected to take the rest of the fiscal year to stabilize cell operations, we expect that our entire cell and module facilities will be stabilized fully and will be operating for the full next fiscal year.
Speaker Change: In addition, we have now secured an external order book of over 900 megawatts, ensuring that our surplus capacity is sold in the market.
Speaker Change: Additionally, we are also listed as a Bloomberg Tier 1 supplier, underlining the quality that we have been able to create.
Turning to page 8.
We are committed to creating shareholder value, of course.
Speaker Change: Over the years, we have built a sustainable competitive advantage in one of the fastest growing markets globally by raising capital through the cheapest source.
Speaker Change: We have grown responsibly, demonstrating capital discipline and taking up projects where returns are significantly above the cost of capital.
Speaker Change: Not only this, we have also created a platform with in-house manufacturing, EPC and O&M bundled with our own digitization and data analytics.
Speaker Change: We are the leaders in complex solutions and one of the very few Indian IPPs to have commissioned over 2 gigawatts of renewable energy assets in a single year.
Turning to page 9
Speaker Change: We continue to be one of the leaders in terms of megawatts commissioned since Q3 of FY24.
Speaker Change: as we have commissioned 2.4 gigawatts or about 25% of our portfolio in this period of the last 12 months.
Speaker Change: Our operating megawatts have increased by around 30% after adjusting for asset sales that we did in the last 12 months.
Speaker Change: Fiscal year to date, we have done around 860 megawatts of commissioning, ensuring that we are on track to hit our megawatt target for the year. In addition, we also have about 350 megawatts of solar projects that are currently installed and are in the process of getting connected to the grid.
Speaker Change: We expect that the Peak Power Project should also be fully commissioned this quarter and so will the RTC Wind Phase 2, will also start getting commissioned later this quarter.
Speaker Change: While our peers in the market have faced connectivity and supply chain issues, our strategy has ensured that we have not only secured interconnection approvals for our current bid wins, but also beyond that.
Speaker Change: That is for our bid wins, not just for the contracted capacity.
Speaker Change: Our in-house EPC teams have ensured that supply chain bottlenecks are sorted out and there is no shortage of materials for wind or solar sites.
Speaker Change: Additionally, we continue to demonstrate capital discipline as the auction markets continue to evolve at a rapid pace.
Speaker Change: As stated earlier, we don't target market share but are focused on delivering returns above our cost of capital, targeting levered returns of 16-20%.
Speaker Change: and we have won around 1.4 gigawatts of additional capacity so far this fiscal year where the expected returns have met our thresholds.
Speaker Change: Do note that while there are still over six gigawatts of bid wins with letters of award beyond our current portfolio that won't be included into our portfolio until the PPA is signed, we are pacing our construction principally around interconnection infrastructure availability.
Speaker Change: Turning to page 10, let me turn to updates from our manufacturing facilities.
Speaker Change: getting into manufacturing was a strategic move to secure our supply chain as India was moving to restrict imports of solar modules into India.
Speaker Change: This barrier meant that we needed to build our own facilities.
Speaker Change: The results are visible in the commissioning that we have been able to do in the last 12 months or so using our own solar modules.
Speaker Change: While the two module plants are fully ramped up, I am happy to announce that our cell plant in Gujarat has also started trial production.
Speaker Change: Our plants are now featured in the Bloomberg Tier 1 Module Supplier List as well as a PVEL Top Performer 2024.
Speaker Change: Our external order book now stands at over 900 megawatts and is likely to grow and contribute to consolidated EBITDA.
Speaker Change: We will be able to provide more granularity on the FI 26 projected numbers along with our FI 25 results next year.
Speaker Change: In addition to securing supply, we are also looking to de-risk our capital by finding partners for the manufacturing business.
Speaker Change: Let me now hand it over to Kailash to talk more about the financial updates. Kailash, over to you.
and Kailash Vaswani.
Kailash Vaswani: Not only this, but I'm also happy to report a 31% increase in profit after tax year on year. This has been possible through a continued focus on cost control and building efficiency in our operations.
Kailash Vaswani: We also continue to expand our contracted pipeline with a 21% increase in the portfolio, adjusted for asset saves that we have made during the year, and our contracted portfolio now stands at 16.3 gigawatt.
Kailash Vaswani: There has been a sequential uptick, but that largely reflects the seasonality, primarily due to higher revenue earned during Q1 and Q2 to be earned in Q3. We expect more DSOs in the following two quarters.
Kailash Vaswani: On slide 9, in addition to profitability, we are also focused on generating cash.
from our projects.
Kailash Vaswani: Our cash from operating activities has been increasing to almost 20.1 billion in this quarter. It's almost a 10% increase year-on-year. Cash profit, a non-GAAP measure to showcase our P&L on a cash basis, increased by 31% to 9.2 billion, from 9.2 billion to 12.1 billion rupees for the quarter.
Kailash Vaswani: Turning to slide 14, net debt to EBITDA leverage at the operating asset level continues to be below 6X, a threshold that we have set for ourselves.
Kailash Vaswani: On a trailing 12-month basis, leverage was around 5.9x, excluding our under-construction portfolio with contribution from JV partners in the form of compulsory convertible instruments and our manufacturing and transmission businesses.
Kailash Vaswani: As we continue to grow our portfolio, the proportion of under-construction projects should come down and will improve the ratios in addition to our efforts to be disciplined in our approach towards capital deployment.
which we've done.
Kailash Vaswani: What this slide shows is that we build up to our assets at seven to seven and a half times
Kailash Vaswani: Project cost to EBITDA. The projects are funded 75-25 in the ratio of debt to equity.
Kailash Vaswani: and hence typically the project debt levels are expected to remain around 5.5 times.
Kailash Vaswani: you know led by EBITDA in the initial years of the project and the interest and depreciation ends up providing us with a tax shield on that.
Kailash Vaswani: We have demonstrated the value creation in several transactions wherein we've been able to sell the asset between 9 to 9.5 times EV builder or 2 times price to book, creating additional value and raising low cost equity for growth and which currently remains for us the cheapest source of equity to grow our pipeline.
Speaker Change: Let me now hand it over to Vaishali for comments on ESG.
Thank you, Kailash.
Vaishali: Turning to page 17, with a strong performance in the first quarter and the successful release of our inaugural annual integrated report, making significant strides towards achieving our sustainability targets.
Vaishali: We are pleased to present the updates for the second quarter of FY25.
Vaishali: Vinu is committed to leading the way and to meet its Net Zero targets.
I'd like to highlight a few.
Vaishali: We have achieved carbon neutrality for the fourth consecutive year and showcasing 10% reduction in scope 1 and 2.
Vaishali: Renewers focused on enhancing the ESG ratings. As part of this effort we've strengthened and developed key policies including the board diversity, stakeholder engagement and data privacy policies.
All of these are available on our website.
Vaishali: Social responsibility has been integral to our business. Our CSR journey began in 2014 and since then we have impacted the lives of over 1.4 million people across 500 plus villages in India spanning over 10 states.
Vaishali: Turning to page 18, I would now like to switch to some of our efforts for Q2 FY25.
Women for Climate
Vaishali: This is a socio-economic empowerment program which is focused on building climate resilience where we have trained over 450 women salt pan farmers.
Vaishali: Employee driven programs. We have programs led by our employees ensuring sustainable, equitable and responsible growth.
over 210,000 kilos of rice.
Vaishali: Renew has been recognized for its sustained efforts in advancing sustainability.
Turning to page 19
Vaishali: At the Ministry of New and Renewable Energy's flagship event, RE-Invest Renew solidified its position as a market leader across different categories.
Vaishali: The prestigious Ward of Honor Award was earned by Renews Hydropower Plant for Safety.
Vaishali: We were placed on the 18th position in the Energy Innovators Group in Fortune's renowned Change the World list.
Vaishali: Turning to page 20, showcasing our progress update on ESG targets for Q2 FY25.
Vaishali: Advancing to the second phase of our Sustainable Supply Chain Assessment, set to begin this quarter, we focused on supply evaluations, recognition initiatives and capacity building efforts which are so critical in this sector.
Vaishali: We maintained our AA rating with MSCI, securing a position in the leadership band. We have also submitted our 2024 responses for CDP and CSA with submissions to MSCI and Refinitiv planned for the next quarter.
Vaishali: So we are on our sustainability journey and it's on track.
Vaishali: We have also identified 46 schools for electrification across Rajasthan and Maharashtra in collaboration with HSBC. Additionally, 4 digital labs were established in Uttarakhand and 25 entrepreneurs received support through the Green Tech Accelerator Program.
Speaker Change: Let me now hand it back over to Sumant for guidance.
Thank you.
Thank you, Vaishali.
Speaker Change: Coming to our guidance, we are reaffirming our megawatts in spite of some challenges and wind execution and adjusted EBITDA guidance. We have also updated guidance for our updated contracted portfolio of 16.3 gigawatts.
Speaker Change: Do note that seasonally our Q3 numbers are normally lower than the Q2 numbers due to weather patterns.
Speaker Change: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.
Speaker Change: If you wish to cancel your request, please press star 2.
Speaker Change: If you're on a speakerphone, please pick up the handset to ask your question.
Speaker Change: Your first question comes from Justin Clare with Roth Capital Partners.
Thank you.
Hey, good morning. Thanks for taking the questions here.
Speaker Change: So, first, I wanted to ask about the RTC project. So, it looks like it's planned for completion still in the second half of 2025, fiscal 2025.
But it looks like it's subject to the transmission readiness.
Speaker Change: So I was wondering if you could just provide a little bit more detail on whether you think the transmission will be ready in time or if there's a potential for delay, and also wondering if this is a case where you think with this RTC project you might end up selling in the merchant market before you end up selling under the PPA.
Thank you.
Yeah, I don't know. Should I take that?
Yes, Sumant, please go ahead.
Sumant Sinha: okay yeah Justin hi so yeah the RTC project will be ready in the second half of this year and as far as the transmission part is concerned no I don't think there's any delay that we expect to have on account of the transmission or the interconnect I think all of that is pretty much on track so I don't see that delaying matters
Sumant Sinha: and to the extent that we are able to commission certain parts of the project ahead of the final commissioning, to some extent we can sell that in the merchant market.
Sumant Sinha: But the way the PPA was structured, it meant that up to the first 400 megawatts of delivered capacity we would have to sell to the end customers.
Sumant Sinha: and it's only when we generate capacities higher than 400 megawatts are we able to sell that part of the market, that part of the capacity into the merchant market. So there will be some sales in the merchant market but small amounts.
Sumant Sinha: which is, by the way, dissimilar to what is happening on the Peak Power Project where we are being able to sell into the merchant market whatever is in fact commissioned so far.
and Sumant Sinha.
Thank you. Thank you.
Okay, okay. That makes sense. Thanks.
Speaker Change: And then, also wondering if you could just comment on the new proposed restriction for cell manufacturing with the, you know, intention to eliminate cell imports.
Speaker Change: Does that affect your thinking on your manufacturing plan, your plans for capacity here? And then just wondering if, you know, do you think your 2.5 gigawatts of cell capacity will be sufficient or could you look at expanding that?
Speaker Change: Yeah, so the government is quite actively thinking of imposing an ANMM for cells, starting in April 2026, so there's still about...
Speaker Change: 18 months left for that to happen. So the government is giving significant advance notice that this is something that is likely to come, you know, in the near future. And so that gives us time to plan for our own response to that.
Speaker Change: And the most sensible response for us would be, in fact, to expand our self-capacity to a point where it, you know, meets at least, at the very least, our own internal requirements.
Speaker Change: So that's something that we are actively considering at this point, but we haven't taken a final decision on that yet But yeah, that would in fact be the sensible thing for us to consider doing
and Sumant Sinha.
Okay, got it. Appreciate it. Thank you.
Your next question comes from Mahib Manloi with Mizzouho.
Mahib Manloi: Hey, hi, thanks for taking the questions here. I think impressive job on the cost optimization. Could you just maybe touch upon that?
Mahib Manloi: as to what drove that and how to think about the cost of optimizations and maybe if I can tag on that, like if I look at the medium term...
Mahib Manloi: Sumant Sinha, Kailash Vaswani, Vaishali Sinha, Sumant Sinha, Sumant Sinha, Sumant Sinha,
Yeah, Kailash, do you want to take that?
Yash Shasman
Kailash Vaswani: Sumi, basically on costs what we have been doing is that you know there's been a lot of optimization program that we've been running within the company and a lot of discretionary spend
Kailash Vaswani: are being cancelled, you know, given the underperformance that we have been seeing as far as wind is concerned. Also, we have managed to renegotiate a lot with some of our OEMs.
Kailash Vaswani: on some of the O&M contracts for our earlier BEND projects.
So that helped us also reduce the cost.
Kailash Vaswani: on existing projects on a going forward basis and also enabled us to write back some provisions that we had kept in the form of equalization reserves.
Kailash Vaswani: So we expect that some of these benefits will continue into the future.
Kailash Vaswani: and the idea is to obviously now grow the portfolio from here on without incurring any significant...
Speaker Change: Sumant Sinha, Vaishali Sinha, Sumant Sinha, Kailash Vaswani, Vaishali Sinha, Sumant Sinha,
Speaker Change: Thank you, Acharya. And then just to also maybe clarify on that, that 700 megawatt which is adding to your medium term, that PPA is more or less in line with recent PPAs or how to think about the PPA price? Because I was trying to find the VIN and couldn't find any details online.
Speaker Change: Yeah, so these projects have all been won within the last one, one and a half years. So the returns are within our thresholds, you know, as we've been discussing.
And then separately, just looking at the...
Thank you. Bye.
Speaker Change: How should we think about the impact on the IRRs? Does doing more solar, for example, increase the IRRs here? Or how should we think about that? Thanks.
Speaker Change: Yeah, if you want me to take that, I can. So, Maheep, basically what's happening is that from the time that we run some of these bids, prices have obviously moved and our equipment costs have, particularly in the case of solar, have come down quite sharply and so have the cost of batteries.
Speaker Change: and what that is allowing us to do is to reconfigure some of these plants in a way that therefore there is likely to be more solar and more batteries in them and less wind.
which also is something that
Speaker Change: will mean less variability because as you know we've had a lot of variability on wind speeds and so on.
Speaker Change: So we are quite happy to therefore decrease the amount of, the relative amount of wind in some of these projects. And the net result of all of this in our minds is that the IRRs are actually improving by doing this reconfiguration and hopefully with less variability associated with them.
Speaker Change: So that's what we have done for a lot of our FDRTC and FDRE projects that we have run recently.
on the last couple of years.
Speaker Change: and frankly a lot of them in the last, in the time period of 6 months to 18 months back.
Speaker Change: And as I said, equipment costs have been coming down over this time period.
Speaker Change: So when we won these bids, they were already attractive IRRs. By doing the reconfiguration, we're actually able to increase IRRs even more. So I think they're all at the higher end of our threshold levels.
Speaker Change: Gotcha, and then maybe just like one last one from me and I'll hand over to others on that 900 megawatt cell and module order I think that's 600 last quarter just for modules
Speaker Change: How much of that is international? I know I've seen you guys in international conferences and trade shows but I'm just curious if it's all India or do you have some international... At this point, Mahi, this is all India.
Gotcha. Buff. Thanks.
Your next question comes from Nikhila Nagania with Bernstein.
Speaker Change: Thank you for taking my question. My first question is regarding the PPAs. So I wanted to understand, I'm good to see the wins by Renew and the tariff set which they are happening, but are we seeing a slowdown in tendering activity in India or slowdown in signing of PPAs given the big quantum that we saw happen last year and early this fiscal as well?
Speaker Change: So, Nikhil, we haven't yet seen a slowdown in the bidding process, although there have been more, you know, more sort of discussions around it within government corridors. And so that is something that you may see happening in the future. But at this point, everybody continues to, you know, bid out capacities.
Speaker Change: I guess the key issue is, what is the amount of PPA conversion that is happening? And that, as we all know, there is a gap and there's about 40 gigawatts of PPAs that have not yet been signed off all the auctions that have happened.
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Speaker Change: Related point was, I also see some legacy PPAs that we have, for example SEC 11 for wind, where tariffs are quite below the tariffs we are seeing right now. Is there any option to exhibit some of those legacy contracts which we have not built?
Speaker Change: Yeah, so you know, I'd say a lot of these contracts have a lot of complexity associated with them because in a number of cases the PP has got signed after a very long time and you know, our contention is that
Speaker Change: It's not fair to hold us accountable for bids that might have happened, you know, a year, two years prior to when the PPLs are finally in the process of getting signed. So a lot of those are under discussion right now with the regulatory authorities and the bidding agencies to see whether, in fact, those should be proceeded with at all or not.
Speaker Change: And, of course, our downside is that in case we don't do it and the bidding agencies say no, no, you should have, then, of course, there is a BP amount, there is a BG amount that would be, you know, penalty that would be leviable.
Speaker Change: But that, in some ways, that bounds the downside that we have. So that's really where we are. But of course, our first attempt is to be able to demonstrate that some of these projects were, by the time they got signed, were totally, you know, things have changed.
Speaker Change: The third question and the last set of questions I have is regarding the module business.
Speaker Change: Again, very timely commissioning of the module plant and now the cell plant.
Speaker Change: Sumant Sinha, Vaishali Sinha, Sumant Sinha, Sumant Sinha, Sumant Sinha, Sumant Sinha,
Speaker Change: Where would you indicate if you place it, which would give us the benefit that you get from it. And we, this entire 6.4 gigawatt module and 2.5 gigawatt cell, am I correct to assume it is monoperk and not topcon?
Speaker Change: Yeah, so many questions there, so let me try to unpack them.
Speaker Change: The module lines were initially set up as monoperf, but are being entirely converted to topcon.
Speaker Change: Most of the conversion has already happened. We have eight lines all together. I think six or seven of those lines have already got converted. The conversion for module line from monoperk to topcon is relatively straightforward. Takes a couple of weeks, so that is all happening. The cell lines are monoperk lines.
Speaker Change: and those who continue to operate that way. We may consider converting them to top form depending on the cost and the requirement and so on. But at this point, you know, they are monopowered.
Speaker Change: The question that you asked, which is, what is the advantage that we are getting?
The flip side to look at it is
Speaker Change: that what is the margin that we are making in the cell manufacturing business?
Speaker Change: for third-party sales. I guess that is in some ways, you know, an estimate or giving us a pointer to...
Speaker Change: you know what the prices, the benefit that we're getting and it's actually quite sizable to be very honest with you because you we all know that margin in the solar manufacturing business are reasonably high right now.
Speaker Change: and you know how long they stay of course is a different matter but today they are high and so had we been buying from the market I would say there would be at least one and a half to two cent differential that you would have had to pay.
Speaker Change: but having our own manufacturing capacity therefore allows us to not have to pay that extra cost. So I think that is the benefit that we're getting from having in-house manufacturing.
Speaker Change: Now, of course, internally we have arm's length pricing between the two businesses, but of course it all gets consolidated out for internal sales.
Speaker Change: Just to also add that not all of our solar manufacturing is going to go in-house. We expect about 50-60% of the modules to be delivered in-house.
and the balance will get sold externally.
Speaker Change: and so to the extent that prices stay high, to that extent we will get benefit in our solar manufacturing business on third-party sales.
and Kailash Vaswani.
Speaker Change: Now, the guidance on that we are not giving because this year was in some way the start up year for us.
Speaker Change: So, we didn't give any guidance for this year. And for next year, we will, as we get closer to that point, and once we get a better sense of our order book and so on, and likely pricing levels, we'll then at that point give guidance for the solar manufacturing business separately.
Speaker Change: Got it Sumant. Very clear. Thank you so much for answering my questions.
Speaker Change: Yes, thank you. A few questions. Firstly, just to get some clarity on the wind PLFs, again the average PLFs for the quarter are down about 300 basis points to 38.3 percent. If you could just elaborate the reasons for that and typically how far away would this be from P90 levels?
Yeah, so you know, Aniket,
Thank you.
Speaker Change: and somebody else's assessment could be higher or could be lower depending on how they go about doing it.
Speaker Change: We are tending to be relatively, you know, conservative on these forecasts because obviously wind has not been kind to us over the last
Speaker Change: for five years now. So it's something that has in some ways impacted or shaped our view on what assumptions to make for Will PLS going forward.
Speaker Change: Just to give you an answer to that question, specifically, the 300 basis points probably is at the P90 level, away from the P75 that we would have assumed.
Last year was...
Speaker Change: Just, you know, at the 41.3% was just two, three percentage points below what we would have assumed to be the P75. And this here being several points below that would get us to maybe P, within P85 and P90.
Speaker Change: So that would be the performance likely from this year's win so far. Now, of course, there is another five six months still left And and we have to see what happens and there could be changes in that as well
and Kailash Vaswani.
Speaker Change: Okay. We got that. That's actually helpful. The other question was specifically on the CNI portfolio, if you've got a fairly large, I think, close to 1.3 gigawatt in construction, if you could just give me a bit more granularity based on the execution timelines over here, and are there any challenges that you're currently facing on the CNI part?
and Kailash Vaswani.
Speaker Change: So, and again, half of that, 1.3 is likely to get commissioned this year, and I'm giving you a ballpark number, and the balance would probably get done next year.
Thank you.
Speaker Change: There are no challenges that we are facing in the CNI business per se. I think everything is going very smoothly in that business.
Speaker Change: We are actually, there's a lot of demand in the market, we're actually turning back a lot of people that are coming to us because their projects are, you know, perhaps too small or in states where we may not have development capacity. And we are really, from our side, focusing on the larger offtakers.
and the U.S. large tech companies.
Speaker Change: I think those are the areas that we are looking at right now and there seems to be a lot of interest and appetite from all of these segments of the market.
Speaker Change: and our sense is that we should be able to get easily up to 15% of our total every year capacity coming in from the CNI segment.
Thank you.
Speaker Change: Lastly, this is the finance cost. If you look at the balance sheet, on a YY basis, our gross debt is up almost 19%. The finance costs have been stable. I understand some of this would still be within CWIP. But still, we've put a fairly good control on the interest costs for the quarter. If you could just highlight why is that happening?
Speaker Change: Yeah, so what's happening as far as finance cost is concerned, you know, we were hit by mark-to-market movements because of the open exposure that we had earlier on rupee-dollar exchange rate.
Speaker Change: And what we've done since then is that we have put all those into firm hedges where there is no mark-to-market impact.
Speaker Change: So that is contributing a lot as far as our finance cost stabilization is concerned.
Speaker Change: Secondly, you know, we've also done some refinancing of high-cost debt. We had made some announcements that, you know, we had bonds which matured and we refinanced that when we got a 200-basis point saving as far as finance cost was concerned. So all that is also being reflected now in the numbers, you know, on an as-reported basis.
Okay.
Speaker Change: Okay. Just one last question if I may squeeze it. In one of the earlier questions you highlighted on the other expenses, there's some write-back that you've done on certain provisions. Could you quantify that number? What's the write-back that's sitting in other expenses?
Speaker Change: So, because we had O&M equalization reserve earlier, which was built at a certain level of O&M cost, because we managed to reduce our O&M cost, we were able to reverse that provision. So that was somewhere in the range of around 60 crore rupees.
Okay, got that. Those are the questions.
Your next question comes from Kuneet Relati with HSBC.
Thank you. Thank you. Thank you.
Speaker Change: Yeah, thank you so much. My first question is with respect to your, you know, EBITDA guidance for 16.3 gigawatts and a few quarters back you talked about, you know, re-evaluating numbers in the land of variability of wind. Does the 16.6 gigawatt rendered EBITDA that you've given in your presentation now factors in poor PLF rendering or is it still more un-normalized?
Yeah, so we have...
Yeah, I have shown.
Speaker Change: So, Puneet, we have taken some normalization from our initial estimates, but doesn't reflect the year performance, for example, because we are still seeing current performance being affected by near-term trends, which are likely to reverse in the longer term. But there has been some adjustment that has already been factored in.
and Kailash Vaswani.
Kailash Vaswani: But there could be room for some more adjustment in this as well.
Kailash Vaswani: So, again, you know, the thing is that, you know, when we do our planning, we assume that there will be normalized wind and, you know, because of actual performance, there could be some variation. So, again, you know, I can confirm to you that we have assumed some adjustment to our earlier estimates to assume make more normalized estimate basis the last few years track record.
Thank you.
Speaker Change: On your module you said half already consumed and half sold. What is the plan for sales? Is there a thought to seed the US market as well?
So, Puneet on cells.
puneet: I mean to the extent that we can tap into that market, of course we would like to do that.
puneet: There's no question. But it really all depends on how open that market is, what is the pricing we can get there, what is the pricing we can get in India. Right now in India the DCR market is also very attractive.
puneet: And so we are quite, you know, with whatever little, whatever surplus we have, we're happy to sell into that market right now. But having said that, as Maheep said, we are keeping our eyes and ears open for selling into the U.S. market as well. We are participating in a lot of the conversations that are going on there. So yes, I think to the extent that we can sell into that market and it gives us better margins, definitely we will be looking at doing that.
there.
Thank you.
Speaker Change: So, what is your assessment of the pricing for the DCR market in the sell side currently?
Speaker Change: What is the pricing? See, it's a function of what is the wafer cost. So, you know, at least internally, we tend to think of it more in terms of what is the margin that we're getting.
Speaker Change: for conversion. And that is not something that we've disclosed so far.
Speaker Change: and I don't want to just give you a number just like that.
Speaker Change: I think we'll work it out, we'll sort of look at exactly what and how we want to disclose it and then we'll come back. The only thing I would say is that the margins that we are getting both for modules and cells right now are actually quite attractive and that is in fact being reflected as you can see in the profitability of some of our peer group companies in the segment right now.
Speaker Change: So, some benefits of that we are also seeing in our solar business.
Speaker Change: And up to the 2.6 gigawatt that you've already produced, how much has been sold outside so far?
Phew!
Speaker Change: I can't give you an exact number, Puneet. Ananya and Kailash, do you guys know?
It's right now less than 100 megawatts.
Okay.
Thank you so much and all the best.
Speaker Change: Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from McAuley Smith with 9T1.
McAuley Smith: Hi, thanks. You've answered most of my questions. I just wondered if you could give any guidance on CAPEX for the remainder of the year?
Kailash?
Kailash Vaswani: Yeah, so, hi. So, most of the CAPEX for the remainder of the year has already been incurred. I would say that maybe we have a few solar projects in which some CAPEX work is going on. That would be somewhere in the range of around...
$200 to $250 million.
Speaker Change: Okay, and just for the capacity at the end of the year, what are your what are your expectations on commissioned, total commissioned capacity?
Speaker Change: So, you know, we have given guidance of, you know, doing between 1.8 to 2.4 gigawatt. I think, you know, we are still tracking within that range.
1.9 to 2.4
So that will take us to somewhere around 11.5 seconds.
Big Award in that ballpark.
and Kailash Vaswani.
Thank you. That was all my questions.
Thank you. There are no further questions at this time.
Speaker Change: That does conclude our conference for today. Thank you for participating. You may now disconnect.