Q1 2027 Clean Max Enviro Energy Solutions Ltd Earnings Call
Speaker #1: Ladies and gentlemen, good day and welcome to the CleanMax Q1 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode.
Speaker #1: And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your touchstone phone.
Speaker #1: I now have the conference over to Mr. Kuldeep Jen, founder and managing director. Thank you, and over to you, sir.
Speaker #2: Hi everyone, good afternoon. This is Kuldeep. I'm joined by my CFO, Nikhun Jaiswal. Thank you so much for your time today. And we are ready to begin at our end, of course.
Speaker #2: We had, I think, about 150-plus people who had registered; we'll just maybe give another minute or so to ensure that people can join. Ryan, will you let us know how many people we have right now?
Speaker #1: Right now we have crossed the 100 mark, 100 participants mark.
Speaker #2: Okay, we'll just give it another 1 minute, guys, and then we will begin. I think we have more than enough quorum; we'll begin in a minute's time.
Speaker #2: Thank you for your patience. So maybe we will begin now. Thank you, everyone. And Ryan, just give us a count: how many people have joined?
Speaker #2: All right. So the way we'll do it is we do have a PowerPoint, but I'll take about a few minutes up front to walk you through some of my comments for results of the last quarter and overall.
Speaker #2: We also have already put out on Friday evening after our board meeting, which approved the results, both the financial results as well as this investor presentation and a shareholder letter is already up on our website since last Friday night.
Speaker #2: And I will touch upon a few of my comments, which are more from the shareholder's letter, and thereafter walk you through some of the PowerPoint pages.
Speaker #2: So a few minutes without the aid of PowerPoint, but just my key messages. So first message about the quarter's performance is we had terrific growth in our profit after tax, which was at 55 crores, which was really driven by three things: first is doubling of our revenue, second is the improved our EBITDA margins in both of the segments of our business, which is in renewable energy, power sales, our EBITDA margins went up from 76% to 84%, and in renewable energy services, they increased from 9% to 11%.
Speaker #2: So we had improved EBITDA margins in both business segments. We also had lower interest costs due to efforts of Nikhun and team, our weighted average rate of interest was 9.4% in, say, April 2025, so last year, which has fallen about 100 basis points to 8.4% is where we stand as of June 2026.
Speaker #2: So as a result of these three factors, doubling of revenues, improved EBITDA margins in both business segments, and lower interest costs, you know, we had substantial growth in PAT.
Speaker #2: So that's first message. Second is, if you look at indicators of future continued growth, we added substantial new capacity of about 500 megawatts in the first quarter of this year.
Speaker #2: This gives me a lot of confidence that we will be able to meet our exceed our guidance of 1.5 gigawatt of minimum new capacity addition during this year.
Speaker #2: We have many more details about why we believe we are confident about meeting 1.5 gigawatt in the shareholder's letter, it specifically in the Q&A section on question number 3, which you can refer to.
Speaker #2: The third thing is, you know, we are therefore quite comfortable providing a new guidance, which is a lot of you have previously asked us that, okay, we understand how you are growing and your results, but we want to have a view on FY28, what is the likely EBITDA you are going to get to.
Speaker #2: So we are comfortable providing that new guidance that we will have a minimum EBITDA of 3,000 crore rupees in FY28, which is nearly 2.4 times the EBITDA in FY26.
Speaker #2: So 2.4x in 2 years from about 1290 crores in FY26 to a minimum of 3,000 crores in FY28, on the back of this 1,500 megawatt of OPEX capacity that we plan to add in the current financial year.
Speaker #2: Now, talking about clients and our so we have two big business segments. One is data and AI, second is general industrial corporates. So if you look at the first segment, which is data and AI, this continues to be a big business segment for us.
Speaker #2: We had 42% of our capacity in data and AI in terms of our contracted capacity, 42% is data and AI, and we have about 10x growth in the last 2 years, so between March 24 to March 26, we've grown about 10x in the data and AI segment.
Speaker #2: So you know, that's the relevance of that segment to us. We are proud that in the in this fiscal alone, we have announced deals with many global hyperscalers in calendar 2026, such as Meta, Apple, Google, and Amazon.
Speaker #2: We estimate that we have about 35% market share of such hyperscalers' business in India. Right? In addition, we are also energy partners, clean energy partners, to various data center companies such as NTT, STT, LNT Data, Equinix, Iron Mountain, and several others.
Speaker #2: Right? And therefore we do expect on a look forward basis, we do expect substantial growth to continue coming from the data and AI part of the business segment.
Speaker #2: The reason is really, down to a simple equation, that when a data center or a hyperscaler says that we will have 1 gigawatt of new capacity that comes up, you know, that 1 gigawatt is what is called IT load, it translates to roughly 1.4 or 1.5 gigawatt of round-the-clock, which is 100% PLF power load, which really means about 6 gigawatt, right, like 3 gigawatt of wind plus 3 gigawatt of solar kind of combination.
Speaker #2: It means 6 gigawatt of power generation capacity to meet this requirement. Right? Which is, in other words, a 40,000 crore rupee capital investment. So if you work the equation all the way through, every 1 gigawatt of data center IT load translates to 6 gigawatt of new RE capacity plus a few gigawatt of storage, which equates to a 40,000 crore rupee investment.
Speaker #2: And there's many, many more gigawatts of data center capacity to come in India over the next 5, 7 years. And therefore we expect to this segment to be a continued growth driver.
Speaker #2: Our other segment is industrial customers. Right? Non-data and AI, but just general make in India, but with cheaper greener power. Right? We have seen a lot of growth in that segment as well.
Speaker #2: We have doubled our contracted volumes in the last 2 years, which means that we are going at about 46% even in that segment. And this growth is driven by a combination of two things.
Speaker #2: First, is a low penetration starting point. The last available data was that only 7% of industrial power in India was consumed through such bilateral green sources, which, in other words, implies that 93% is available for, you know, penetration.
Speaker #2: So there's a huge penetration potential. The second reason is that the customer value proposition is terrific. Customers save upwards of 25% on their energy costs, and also lower their carbon footprint.
Speaker #2: So, you know, there's low penetration, with a high consumer proposition, and therefore the last 2 years we have seen over 46% annual CAGR in terms of new capacity signed up, and we do think that some of that will continue.
Speaker #2: And therefore we do have a substantial pipeline, which is just contracted capacity, which is under construction, of which has remained stable at 2.5 gigawatt or more.
Speaker #2: So at any point we have enough, you know, locked and loaded to build for the next 18 months of growth. Right? And the good news is that the new volumes we have have a similar quality standard and profitability standard as the prior volumes.
Speaker #2: Let me explain. There are three metrics that we track closely. First is, you know, how much of our customers are rated AA, AAA, or multinational subsidiaries in India.
Speaker #2: And we are glad to report that, honestly, for the last decade or so, that number has been well above 80% and continues to be.
Speaker #2: Second, the tariffs of the 2.5 gigawatt, which is contracted yet to be built, without storage without value-to-storage, is about 4 rupees per unit of power.
Speaker #2: So the tariff prospects are as good. The new volumes are as profitable from a tariff perspective as existing volumes. And 80% of the new volumes are with existing clients.
Speaker #2: So that's those three dimensions of quality that we track in new customers, which is what is the share of high credit rating, IAA, AAA, multinational clients.
Speaker #2: That remains as always. Second is tariff is not declining, so profitability is intact. And third is that, you know, the share of repeats. So we continue having customer love and nearly 80% of new volumes we contracted in the last quarter were repeat business.
Speaker #2: So that's about clients. We've also lowered our borrowing costs on project finance from 9.4%, as I mentioned in April 25, to about 8.4% in June 26.
Speaker #2: And we are looking to tap the domestic credit market, so the bond markets, for the first ever corporate bond issuance by us. And this is enabled by the fact that recently our credit rating also got upgraded to a AA minus threshold.
Speaker #2: And the AA barrier is important if you had to do a domestic corporate bond, and that's the market we are tapping into. And a lot of other questions also frequently come up.
Speaker #2: We've tried to provide very detailed answers in our FAQ. So in our shareholders' letter, which has a very detailed FAQ section, so please do refer to that.
Speaker #2: And with that, I'm done with my opening comments. And I will try to walk us through this PowerPoint right now. What I will also do, though, is to the extent there is a repetition from my opening comments, I will take the liberty to skip the slide.
Speaker #2: So highlights for Q1. As we said, we've now got about 6 gigawatt of contracted capacity overall. And 3.5 gigawatt of operational RE power sales segment.
Speaker #2: And in this quarter, we've commissioned about 400 gigawatt of in the RE power sales segment and 100 megawatt in the RE services segment. So overall, 500 megawatts.
Speaker #2: So we've had a lot of commissioning in the last one quarter. We also delighted that our EBITDA has increased about 74%. You know, to about 494 crores for this quarter.
Speaker #2: We went about some of these other dimensions. And from a quality perspective, you know, we continue to do very well with data and AI clients.
Speaker #2: And most of our volumes come from repeat business with existing customers. Often we talk about and give data about which states we are operating in.
Speaker #2: I don't think there's too much of relevance here. We continue to have strong positions in each of the markets where we already had that with an increasing diversifying trend across various states.
Speaker #2: Right? And the total contracted capacity is about 6 gigawatt as of 30 June. Of that 6 gigawatt, 3.5 gigawatt is already operational. And another 2,500 megawatts therefore is contracted and currently being executed.
Speaker #2: In our RE services segment, we have about 682 megawatt, which is operational because we commissioned 127 megawatt in this quarter. And 147 megawatt is contracted and under execution.
Speaker #2: And therefore, the total portfolio total of built and under construction is about 6.8 gigawatt for us. There is, in our KPI section, you'll see there's another 6 gigawatt or so where we have transmission capacity as well as we have applied for new transmission.
Speaker #2: So we are very optimistic about the growth. And therefore, we are continuously replenishing the transmission and evacuation capacities available to us. So a few highlights on our financial results.
Speaker #2: As I mentioned, our revenues have more than doubled, and, you know, in each of the segments, there is high growth in revenues. There is also an uptick in our EBITDA margins.
Speaker #2: Both our segments, which is really down to operating leverage more than anything else. So RE power sales, last first quarter of last fiscal, our EBITDA margin was 76%, which has increased to about 84% in the first quarter of this fiscal.
Speaker #2: Secondly, second business segment is RE services, which was 8.7% EBITDA margin in Q1 of last year, which is 11.2% in Q1 of this year.
Speaker #2: So both our business segments have improved their EBITDA margins. And as a result, our PAT has been positive 55 crores for the first quarter of this year.
Speaker #2: Right? And, you know, we've I'll flip over this chart quickly because we went through this in the last fiscal. Our run rate EBITDA has increased run rate EBITDA means EBITDA from all operational assets as on that day for the next 12 months.
Speaker #2: So at the end of last fiscal, it was 1,870 crores or so. The other so that's a repeat from really the last presentation. We'll take you through some of these key unit economics.
Speaker #2: I'll focus on one or two numbers only here, which is if you look at our tariff, on the bottom right-hand side, you know, the operational portfolio tariff is about 3.93 rupees per unit of power.
Speaker #2: This is for the existing capacity of 3.5 gigawatt. And what is under execution? So, you know, 2.5 gigawatt is contracted under execution. That is at a tariff level of 4 rupees.
Speaker #2: So I mentioned that earlier. So we now see in renewables, the tariff levels stabilizing to rising. And, you know, we have given some illustrative operating assumptions.
Speaker #2: But based on what we are putting up and all of these assumptions, we are now comfortable providing a sort of threshold EBITDA guidance for next fiscal, which is FY28, which is that we believe the first number is 4.6 gigawatt will be the minimum OPEC sales capacity on 1 April 2027, which was 3,100 megawatt at the start of the year, plus about 1,500 megawatt of new capacity we're adding this year.
Speaker #2: So 4,600 megawatt of OPEC sales capacity minimum by 1 April 2027. This should give us, and therefore we are comfortable issuing a guidance to the street that we will have a minimum reported EBITDA in FY28 of about 3,000 crore rupees.
Speaker #2: This is a substantial which is nearly 2.3 times growth in two years between FY26 and FY28. So we are comfortable issuing that as a guidance.
Speaker #2: And that came from a feedback from a lot of you all, which is that we don't want to just look at how we are building and how we are doing the current year, but we'd like some estimate for next year as well.
Speaker #2: So that's the guidance we are providing. A few business updates. So one is, as we talked about, data and AI continues to be a strong component of our business.
Speaker #2: It's maintained its position at about 42% of our aggregate contracted capacity. And has grown nearly 10 times between start of 20 fiscal 24 to about now.
Speaker #2: So in two years, it's grown about 10 times. But even the conventional CNI, which is really largely industrial clients make in India, if you will.
Speaker #2: So that has also enjoyed about a 2.2x growth in volumes overall. And is growing at therefore about 46% per annum. Right? And we have a number of key customers, you know, in the data and AI business as well as in industrial clients.
Speaker #2: But we're quite disaggregated. So we had given a guidance and stick to it that we will add over 1.5 gigawatt in the current fiscal in terms of OPEC sales capacity.
Speaker #2: And we've added in OPEC sales capacity 400 megawatt in the first quarter of the year. And we have plenty of unbuilt capacity. And why we feel very confident about this is answered in much more detail in question three in the shareholders letter as well.
Speaker #2: And we continue to have we've always enjoyed somewhere between 75 and 80% of our new contract signed are with existing clients. In the last quarter, that number was quite similar.
Speaker #2: So, you know, the new contracted capacity is with existing customers. Right? And we continue to have low receivable days. We continue to maintain above 80% share of volumes with clients who are rated 88AAA or multinationals.
Speaker #2: So that continues to be a big part of our business. And, you know, the PPA tenure remains very long. We have on average 23 years PPA tenure.
Speaker #2: We have a great tariff locked in for the next 2.5 gigawatt. It's about 4 rupees or so, which is in today's times a fantastic tariff.
Speaker #2: We continue growing our customer base. So today we have nearly 600 unique CNI customers. And, you know, are in about 10 states. Seven states we are already evacuating power.
Speaker #2: Three more states is contracted. And under execution. So, you know, that footprint is also vital because customers need the RE capacity to be in the same state as their power consumption.
Speaker #2: And therefore that footprint also matters. Let's talk about project and execution performance. And before I head into that, I do think it's very this is a very, very critical area of our business because today we do feel that we are constrained not by demand as much as by how much we can actually put up.
Speaker #2: All right? So we are in a almost happy situation to be supply constrained, not demand constrained. And therefore, firstly, I'm very proud that we have improved the pace of build.
Speaker #2: So if you came and met us almost a year ago and looked at a trailing 12 months as of June 26, how much capacity have we added?
Speaker #2: The answer was 450 megawatt. In the 12 months prior to 30 June 2026, this reflects our execution capacity. You know, how much you add in a quarter may go up or down, but always looking at trailing 12 months of capacity addition is a useful metric.
Speaker #2: And 450 megawatt of capacity addition has increased to about 1,740 megawatt in the trailing 12 months, which included one CTU project. But even the STU and rooftop part of the capacity addition grew from 450 megawatt to 1,200.
Speaker #2: And we've now started building CTU capacities as well, maybe like one CTU site a year, so about 500 megawatt a year. So the pace at which we are executing has grown to a trailing 12 months run rate of about 1,743 megawatt.
Speaker #2: So, you know, that gives you a sense of the capabilities of the organization have improved to be able to grow at this pace. The second aspect of execution in our mind is on-time and within budget, which is very critical in a projects business.
Speaker #2: And it's important to look at this operating discipline over long period of time. And we are quite happy that over the last three, three and a half years, including the last quarter, we have always come in within budget.
Speaker #2: So whenever we contract something with a client, the board approves a project and there's an approved capital expenditure on basis of which we have underwritten the project.
Speaker #2: In each of the last three fiscals, as well as in the most recent quarter, we have installed projects below budgeted cost. So, you know, that's a positive for us.
Speaker #2: You know, our grid uptime has generally been quite good. So STUs is most of our capacity is about 87% of our EBITDA is STU plus rooftop.
Speaker #2: So in STU grid uptime has remained very high at above 99% kind of levels. And you'd always assume 1% sort of downtime somewhere in the grid.
Speaker #2: Yes, like many other players, CTU is also is a problem area for us. We have a project commissioning in Beacon Hill. You know, at the end of last fiscal, start of this fiscal, where we have about 70% back down and expect that back down to actually continue throughout the duration of the current financial year.
Speaker #2: But the saving grace for us is that CTU capacities only represent about 13% of our FY 27, you know, of our start of year run rate EBITDA and therefore the impact is only on that 13% or so.
Speaker #2: So someone earlier today asked me a question. Yes, our EBITDA would have been higher by maybe 8 or 9% if we did not have this back down.
Speaker #2: But that's the extent of the impact. Right? And we continue to do well in our power generation because you can put up assets, but are they generating as per your expectation and as per prior exhibited performance?
Speaker #2: We always on PLF basis, you have to look at trailing 12 months because of seasonality. Any one quarter is not a good metric of PLF.
Speaker #2: So we look at trailing 12 months. So in wind, we have marginally improved our PLF. In solar and hybrid, we are almost similar. So I would say in all types of technologies we use, our PLFs have remained industry leading and at a high level.
Speaker #2: Right? I'll request Nikush to now walk us through the financial results section of our presentation. Thank you.
Speaker #1: Thank you, Gurdeep. And good afternoon, everyone. So we are on slide number 16. Those who are not joined on webcast and using the phone lines, it's financial results snapshot for the first quarter.
Speaker #1: FY 27, I'll focus on the key double clicking on the numbers. Which perhaps we've not touched upon thus far. So revenue from operation grown 107% to 832 crore.
Speaker #1: But if we double click on it, the RE power sales segment has grown 47% to 528 crore compared to 358 crore last quarter. And the RE services segment had reported a revenue of 300 crore this quarter compared to 41 crore, which is a six-fold increase because we executed more project and booked revenue under this segment.
Speaker #1: The EBITDA given the mix of the two segment has grown 74% on a cash EBITDA basis. And on a reported basis, it's a 68% increase to 462 crore compared to 275 crore.
Speaker #1: Some of the and of course, the FAT reflects this operating and financial leverage we touched upon. But some of the other important balance sheet numbers for the quarter are the gross block, which is at 14,138 crore now.
Speaker #1: And the net debt number is 11,809 crore. Compared to the 9,684 crore the last quarter. Right? Which is 31st March 2026. And similarly, the equity base also has increased to 5,831 crore.
Speaker #1: We have some more slides covering the buildup of the EBITDA and net debt, which is which is the next slide, which is page number 17.
Speaker #1: And this is an important two number which we look at it that what is the breakup of EBITDA. It's 494 crore is the existed reported EBITDA.
Speaker #1: But in our business, there are projects which are operational at the start of the year has already been fully stabilized and has been operating.
Speaker #1: So that represents close to 334 crore of EBITDA comes from that out of 494. 7% EBITDA comes from the RE services business. And the remaining which is 125 crore of the EBITDA in the quarter is primarily from the project which is commissioned in the last 12 months and in the process of fully stabilization.
Speaker #1: Some of them have fully, some are still maybe stabilizing. So this is a breakup we give so that we can look at the corresponding debt against it and try and better appreciate the cash flow versus the debt position.
Speaker #1: So out of the total 1,100, 800 crore net debt approximately 44% of the debt is against the project which has been operational at the 12 months prior to the start of the year, which is 5,154 crore.
Speaker #1: And very interestingly, 38% of the total debt, which is 4,483 crore, is against the under construction asset. It means that assets are yet to generate the cash flows.
Speaker #1: The debt is being utilized for the projects which are currently under construction, which reflects the velocity of the new construction and what is more coming in as a future pipelines and the projects.
Speaker #1: Page number 18, which is further covers the breakup of the RE power sales segments and the operating leverage within this business. So the gross margin primarily remains in the range of 93 to 92%.
Speaker #1: So it's more of a flat line. But we see the EBITDA margin continue to expand primarily because of the reason that SG&A to total income continue to decrease purely on account of the operating leverage with the increase in the capacity and the base.
Speaker #1: So the 84% is the approximately 84% is the EBITDA margin for RE power sales business for this quarter, which was for last financial year was around 82%.
Speaker #1: So we already sorry, 83%. It's already moved to 84 a couple of years back. It was 75%. So it's already seeing that expansion. And the base hopefully it should further continue to expand.
Speaker #1: Now, this is the last slide for this presentation. And maybe we'll open the for the this for Q&A. A couple of three points to highlight here.
Speaker #1: One is that our credit rating now is AA, which was A plus for the last quarter, same period. So that certainly is a very, very good outcome for us post listing.
Speaker #1: And that Gurdeep already touched upon that this also opens up a DCF opportunity for us. So we'll be coming up with a first domestic bond for clean max.
Speaker #1: Hopefully soon. And 23-year weighted average PPA against the 18 to 19-year loan profile is also reflects that there is a very strong asset liability sort of coverage.
Speaker #1: And the combination of two now reflects on cost of financing, which is 8.4% for the 30th June 2026 compared to 9% and above for the last financial year.
Speaker #1: April 2025. So this we believe is a very good outcome on the financing side for the business. And now we can we will try to build upon on that momentum as we progress further in the year.
Speaker #1: And with this, maybe I'll stop the management. Commentary and open the floor for Q&A. So thank you everyone.
Speaker #2: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone.
Speaker #2: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question.
Speaker #2: Please note, participants connected through webcast may post their text questions and ask question box. We take the first question from the line of Apurva Bhadur.
Speaker #2: From IIFCell Capital, please go ahead.
Speaker #3: Hi sir. Thank you for the opportunity and for the very detailed presentation. I think it's class leading. I want to know your thoughts on this deferral of ALMM2.
Speaker #3: We are one of the beneficiaries, I think. So how are we planning to sort of take advantage of this gap which the government has created?
Speaker #1: So the thank you, Apurva. The government has basically said that for all projects which can commission before 31st March, you can continue using domestic modules made with Chinese or imported cells.
Speaker #1: That's essentially the benefit. And those are available cheaper. You know, the price differences are about 60 lakhs per megawatt. You know, between Indian made cells and imported cells.
Speaker #1: So the benefit is about 60 lakhs per megawatt. So obviously the projects which we were planning to build between now and 31st December or even something which was maybe internally slated for Jan and Feb, we are examining and working on pulling it forward, making sure we can build it by 31st December to take advantage of that.
Speaker #1: It's tough to give a precise number on how many megawatts that would be, but Apurva, if we are doing 1,500 megawatts overall, you, you know, you can think about or estimate on a per quarter what's the, you know, amount of solar modules.
Speaker #1: So there is undoubtedly some benefit. And in some sites where we have existing clients, PPAs are signed, they were close to making a decision, we are seeing some acceleration of decision making at their end as well.
Speaker #1: You know, everyone wants to take advantage of this and capture a little lower tariff. But that is only in a few, I would say, brownfield STU sites such as in Maharashtra and Karnataka where we have that ability to build that quickly.
Speaker #1: That even if someone contracted today, we could actually commission it by 31st December. So there is some benefit. It will definitely accrue to the contractor under execution at the rate of 60 lakhs a megawatt cheaper cost.
Speaker #1: And there may be also some incremental sales particularly where we have brownfield sites example in Maharashtra and Karnataka where it can be executed quickly.
Speaker #1: Thank you, Apurva.
Speaker #3: And thank you. Thank you so much, sir. And also on the pricing for these modules, are you seeing any any drop in the prices or softening of prices because of this delay or how are we positioned over there?
Speaker #1: We've not yet contracted, I was in a meeting last week where I was updated that, you know, we are under process of negotiation. So it's too early to comment on it.
Speaker #1: It's not yet contracted by us. But fundamentally between Indian made cells and imported cells, there is on average at least a 60 lakh rupee per megawatt peak difference.
Speaker #3: Okay. Okay. Understood, sir. So just on touching on your comment on this 1.5 gigawatt capacity addition target in FY27, I see I read your shareholder letter and where you have mentioned that 543 of this 1.5 gigawatt will be contributed by the CTU project at Copal where two bays have been allocated and they commission by October 26th and March 27th.
Speaker #3: Can you break down the capacity linked to each of these bays?
Speaker #1: Maybe I don't I don't have the number straight off the bat, Apurva. But but we can provide it to you maybe post this call.
Speaker #3: Sure.
Speaker #1: But it is useful to have two bays because what happens is you have some fungibility across bays also. That's also a factor in CTU.
Speaker #3: And sir on on the second bay commissioning by sorry, please please go ahead.
Speaker #1: So I was just saying for everyone else's benefit that we have put up the shareholder letter that Apurva is referring to on the screen as well.
Speaker #1: I don't know if you can increase the font a little bit. And you know, people can refer to that this in their free time as well.
Speaker #1: Sorry, Apurva, but why don't you finish asking your question?
Speaker #3: Sure. No, I I was just wondering about this commissioning timeline for the second bay. It's by March 27th. Is it a little too close for comfort for our target or have you factored that in in your 1.5 gigawatt target itself the probability of meeting this quite high even if the slight slip in the second bay commissioning?
Speaker #1: Yeah, what we do know is even in the first bay there is spare capacity and so on. So we've been given an assurance that look if you manage to commission right now the bays are empty enough that there is enough evacuation capacity and there's fungibility across the two bays.
Speaker #3: Okay. Okay. So even if the second one gets slightly delayed, we'll still meet our target. Understood, sir. I also go through I mean, I was going through your your results and I think there was one quite interesting observation over there that there has been a reclassification or an amendment to the debenture trust deed which has reclassified existing listed debentures from unsecured to secured and lifted the security cover from 0.7 times to one times.
Speaker #3: Why would existing debenture holders need more security?
Speaker #1: Apurva, I can take that. So maybe the way the original so you you remember that there was certain corporate debenture issued. Part of that is repaid using the IPO proceeds.
Speaker #1: Part still remains. The way our debenture trust deed was written that the security cover would remain from 0.7 to 1.25. It was a range.
Speaker #1: So either we have to keep it 0.7 minimum or we take it to 1.25. Given that now we listed we are planning another corporate bond.
Speaker #1: We said that it would be 1x. We are not keeping a range. Otherwise, post repayment, we would have taken it to 1.25. So it's not it appears like they are increasing.
Speaker #1: We are not increasing. We are just making sure it's consistent. It's consistent to the upcoming bond where we would offer maybe similar 1x security.
Speaker #3: Okay. Understood. Very clear. Thank you so much. I'll get back in the queue.
Speaker #1: No problem. No worries.
Speaker #3: Thank you. We take the next question from the line of Atul Sivari from JTB Morgan. Please go ahead.
Speaker #2: Yes, sir. Thanks a lot. So just two questions. So obviously over the past one or two quarters we have been seeing you know pretty sharp pickup in the battery installations and many listed players are also getting very aggressively into this game.
Speaker #2: Ordering you know 10, 15, 20 gigawatt hours of batteries. So the question is how is it you know playing for your business and are your new PPAs also incorporating some kind of batteries?
Speaker #2: And if not, then how are you thinking about you know this opportunity? So that is the first question.
Speaker #1: Thank you, Atul. So for benefit of all, it's covered in question number five of our FAQ section of the shareholder letter. Which Ravel is just putting up, right?
Speaker #1: So you know to answer that, Atul, yes, we agree this is a huge potential growth opportunity for Clean Max and is a natural evolution just like in our corporate journey we started with rooftop solar.
Speaker #1: We added then offsite solar. Then we added wind. We've added carbon solutions. We are now adding beds. Right? So it's a natural evolution and something which we are quite excited about.
Speaker #1: Now what are all the things we are doing? First, where we this is in the where we stand today. We have greenlit our first best investment already right which is our SQ project in Rajasthan and have also signed MOUs with three clients.
Speaker #1: In the past one month alone because for us just go so I yeah I was here. So we have also signed MOUs with three clients in the past one month alone right because for us we cannot just put up a blind best investment.
Speaker #1: We have to sign up with a customer to pay for that best investment. Right? So that's what we are doing and we've done MOUs with three.
Speaker #1: And we do see strong tailwinds here. Right? And we'll talk more about this. Next page. So what are the opportunities which we see over the next three years?
Speaker #1: Sorry. I'm not finished, Atul. We we are seeing with CNI customers, right? So I'm not talking about where the DISCOM has a tender as you all know.
Speaker #1: We do not participate in DISCOM tenders. In the CNI market, we are seeing three kinds of opportunities. One is in solar only state where you know like Uttarakhand or Haryana where wind resource is not available.
Speaker #1: BESS allows us to pair daytime solar generation with storage to improve the energy offset customers can get. Right? So those that is one type of market we are tackling.
Speaker #1: Second is in some markets the grid has now started creating more of a price differential between daytime and evening peak power. Maharashtra is a good example.
Speaker #1: They have made daytime energy cheaper as a DISCOM and said we will charge much more of a premium in evening peak. And that's therefore customers are saying hey can you make some can you store some power and give it to us in the evening?
Speaker #1: And third aspect is we are already seeing a few customer tenders out for BESS as a service. Because I'm very large customers may have contracted with multiple people may need BESS as a service.
Speaker #1: So these are the three kind of segments or opportunities that we are targeting. Right? And it is very valuable because it helps improve you know if you do solar plus add BESS it helps increase the offset of power that you can offer a customer.
Speaker #1: So it essentially enlarges the addressable market for Clean Max. Therefore we are very serious about it. We've got going you know we've solved the technical issues.
Speaker #1: We have vendor choices done. We've you know contracts done. We've started dealing with clients and are building our first few projects under that. So all of this is in Q&A number five of the shareholders letter.
Speaker #2: Yeah. Agreed. Very my second and the last question is on the new PPA pipeline. So obviously over the past two years we have seen very sharp growth in your total portfolio to now 6,000 megawatt 40 45% growth.
Speaker #2: So to maintain the same kind of growth you know how does the pipeline look over next one to two years both from your traditional CNI segment and data centers and AI?
Speaker #1: So we are seeing tremendous growth, Atul. So pipeline basically means all the hundreds of conversations we are engaged in to sell more energy. You know so that's pipeline for us.
Speaker #1: It's not contracted. Right? It's the hundreds of conversations we are engaged in to sell more energy. And that two three drivers why this pipeline growth is terrific.
Speaker #1: First is and I'll take both our customer segments separately. First is if you look at data and AI as a customer segment every one gigawatt of data data center needs about one and a half gigawatt of round the clock power which needs about six gigawatt of renewable energy.
Speaker #1: Right? And today we as Clean Max enjoy 35% share of the hyperscaler business in India. Our view on data and AI is that the market is going to expand at such an incredibly furious pace that there players to come in and for everyone to win.
Speaker #1: Right? Because the volumes are expanding so much there is a potential for everyone to win. But certainly in this we feel confident that existing proven suppliers like us who have contracted all the data centers as well as with all the hyperscalers will get a more than fair chance to get our size of pie and if you know the data center market increases by say five gigawatt over the next five years or the numbers I've heard from all you analysts are five to ten gigawatt in the next five years then that means about a 30 to 60 gigawatt 30,000 megawatt to 60,000 megawatt of new renewables needed to supply 75% of that data center capacity.
Speaker #1: So therefore we feel very excited about that portion of the market and it reflects in the conversations we are having with clients. The second part of the market is make in India.
Speaker #1: But with cheaper greener power. And there we feel excited about two things. First the customer proposition is great and the penetration is very low.
Speaker #1: So customer proposition why should a corporate adopt green power is because they save 25% on their power bill and improve their ESG score lower their carbon footprint and so on.
Speaker #1: So acha kaam karne ke liye achae paise bach rahe. Right? So customer proposition is great. And the market is very very large. So this is there in our other investor presentations as well.
Speaker #1: It's a three lakh crore rupee EBITDA market just RE generation just CNI market on RE generation valued at say even like 3.6 rupees per unit of power at a generation bus bar is worth three lakh crores of EBITDA pool over a period of time you know currently.
Speaker #1: And this EBITDA pool is growing but the penetration of this pool is very low only about seven to eight percent of these customers are today buying green directly.
Speaker #1: So the penetration potential is very high and therefore the opportunity is big. And the way we are tackling it is of course doubling down in the biggest markets where we are quite strong such as Gujarat, Maharashtra, Karnataka and Tamil Nadu these are the biggest industrial markets in in India and we are doubling down on that.
Speaker #1: But also we are entering new states where we were today not present. So for instance we have new transmission capacities in states like Uttarakhand or Andhra Pradesh and Rajasthan which we are now constructing in.
Speaker #1: So you know both low penetration here nationwide so that's huge opportunity. Of course there's opportunity to do a lot more in the biggest markets of India where we are the market leaders.
Speaker #1: And there's potential to enter new states. So therefore both in data and AI as well as in make in India segment so data and AI is 42% of our volumes.
Speaker #1: Make in India is 58%. In both those segments we see huge potential for growth for the reasons I explained.
Speaker #2: Great sir. Thank you. Thanks a lot.
Speaker #3: From Axis Capital. Please go ahead.
Speaker #2: Hello sir. I have a few questions on your curtailment issue. Can you quantify because in your shareholder letter you have mentioned that curtailment of 70% in June.
Speaker #2: But can you quantify it for the whole quarter one and can you just put a bit a number or a number of units lost due to curtailment?
Speaker #1: Yeah. So the way to look at it is our run rate EBITDA at the end of last fiscal as declared by us previously also was 1870 crores.
Speaker #1: Of this the other number we have declared is our CTU project where there the curtailment problem is there accounts for about 13% of this run rate EBITDA.
Speaker #1: Right? And in that we are currently facing a curtailment of about 70%. So if you assume the curtailment continues for the whole year you are saying 1870 crores into roughly 13% is your EBITDA from the project which is about 240 crores.
Speaker #1: And if you take a 70% curtailment that's about 170 crores on a full year basis.
Speaker #2: Right. Got it. Got it sir. And other thing I wanted to understand is if you can give your PLS and generation on the quarterly basis.
Speaker #2: PLF you mentioned TTM. Which does not give the understanding about how your assets performed in a given quarter. So that's one thing and in the.
Speaker #1: I think there is a KPI we can refer to this.
Speaker #2: Sorry?
Speaker #1: So even in our KPI even when we did our IPO my friend in our KPIs we refer to PLF on our trailing 12 month basis because of seasonality that's the right way to evaluate rather than within one quarter.
Speaker #1: And of course if the PLF have remained the same or only improved we've done well in the last quarter as well from a PLF perspective.
Speaker #2: Right. And even in terms of units sold in one of your slides you give units generated by the onsite capacity. So balance is offsite.
Speaker #2: In that if you can just roll up and break up at least that would give us a sense of how your assets are performing in the given quarter.
Speaker #1: Okay. Let's see if we the breakup is given on the when we report our greenhouse gifts reporting. Which is on page.
Speaker #2: Yeah. So then that is onsite right?
Speaker #1: It is the breakup of units generated on no both. Offsite onsite breakup is given.
Speaker #2: He's saying you want solar and wind.
Speaker #1: Solar and wind offsite we can give it from it.
Speaker #2: Right. Other thing that I wanted to other thing that I wanted to understand is that in your opening remarks you mentioned that 38% of your 118 billion debt is related to seaweed.
Speaker #2: Now 38 seems to be too high. So just clarifying are you considering the debt related to the 525 megawatt project which is stuck because of the connectivity issue has seaweed?
Speaker #1: No we have not because that is already commissioned and comes in our commission.
Speaker #2: Right. So that is coming in I was just clarifying one thing.
Speaker #1: And yeah. But you know we we do have the happy situation. Of very high growth. Right? And therefore though all those projects are in very late stages of construction.
Speaker #1: So certainly all the equipments are already at site and so on. And therefore the the seaweed debt is is is high because the capacity being built is high.
Speaker #1: The EBITDA that will be generated from such capacity is high as well.
Speaker #2: Right. Got it. Right. And the last question from mine is if you can tell us about the capex that was done in Q1.
Speaker #1: No we can't. We can tell you about the capacity that was commissioned which we have. That we added about 500 megawatt overall. 400 megawatt was in our RE power sales segment.
Speaker #1: Slightly above 100 megawatt was in RE services.
Speaker #2: Right.
Speaker #1: You know we don't have a breakup of fixed assets growth but we can maybe get back to you offline on that.
Speaker #2: Right. Sure. Sure. No worries. Those were my questions. Thank you.
Speaker #1: Thank you.
Speaker #3: Thank you. We take the next question from the line of Nirmal from Aditya Berla Sun Life AMC. Please go ahead.
Speaker #2: Hello. Thank you for the opportunity. Sir my question was on the in case of EAPA or the VPPA contracts where we are essentially acting as merchant agent for hyperscalers.
Speaker #2: So my understanding is that when the merchant prices in solar are moving down how does it impact the way hyperscalers look at this. And is this understanding correct?
Speaker #1: So two things. Firstly when hyperscalers sign up to such contracts all of our contracts give them the right the customer the right to either take the power directly to their data centers in India or to use it as a to buy the energy attribute offset.
Speaker #1: So that right is really with them and the way they think about it is that as and when their data centers come up in India and the energy load ramps up typically the intention is you will then consume the power directly.
Speaker #1: But that option is left to them. Second thing is that under an EAPA or a VPPA contract the net tariff to us is identical irrespective of what is happening in the merchant market.
Speaker #1: So whether for instance the solar power is being sold in the merchant market at one rupee or three rupees makes no difference to us because we are to get the assured revenue on a per unit basis which is typically like 3.7 rupees or thereabouts I forget the precise number but we are to get the assured revenue on a per unit basis which is what we continue to get.
Speaker #1: And therefore it makes no real difference to to us. So you know I think there are still quite gung ho about such contracts because most importantly all of them I think have large data center in India plans.
Speaker #1: So they are not looking at India as just a market from which to do EAPA or VPPA contracts. They are looking at it as a big data center market.
Speaker #1: And therefore they may have India is also a good place to source RE power from because you could use it to offset India and non-India you know offset requirements.
Speaker #1: Still such time as your data centers ramp up. That's how they are looking at it.
Speaker #2: Okay. Sir thank you. My second question is historically hyperscalers have chosen us as preferred partner. As you mentioned we have 35 per 35% market share.
Speaker #2: So just wanted to understand what are we doing differently here.
Speaker #1: So we are we are glad that we have over the last many many years you know relation strong relationship with each of the hyperscalers with many deals done over multiple years and therefore credibility as a vendor built through that.
Speaker #1: Which translates into as of today we have about estimated 35% market share of the hyperscaler business in in India. And you know some of these what all we have done with each client is lifted on listed on the left hand side of this page.
Speaker #1: And you know it is I don't think hyperscalers necessarily have preferred vendors or they only work with X or Y. The way we look at it or what we have learned in our dealings with them is that their volume requirements are so incredibly large that they will need multiple vendors to supply to them.
Speaker #1: And therefore even as they have announced data center contracts with multiple players you've all been privy to recent announcements they have simultaneously contracted clean energy requirements with players like us.
Speaker #1: You know so you know we we feel very confident about our relationships and our work. And you know we we do think that you know this market share of hyperscaler deals is currently very very high at 35% plus.
Speaker #1: I think that will come down but as a share may come down but if the volume just explodes that's fine. It's quite a few gigawatts for us in this segment in itself.
Speaker #1: Thank you.
Speaker #2: Okay. Okay. Sir just my last question on competitive intensity. So you know many big players like Adani and Reliance and also NTPC have expressed their desire to come into the C&I space.
Speaker #2: How are you looking at this? Of course you mentioned that it's a very large EBITDA pool. But how are you looking at it going ahead?
Speaker #1: See the good news we've been exclusively focused on the C&I market for the last 15 years. And therefore created huge advantages such as 600 customers these customers also often require to put 26% equity.
Speaker #1: So we have nearly 100 SPVs with client equity in them. And 80% of our new volumes every year is repeat business through these clients.
Speaker #1: Second is execution difficulties in C&I because you do need capacity in every state where people have a requirement. You can't just put up one big plant whether in Kutch or some desert or so on and supply everywhere in India.
Speaker #1: To the C&I segment. And the average PPA size is only about 13 megawatt in this market. So all of those are the challenges. And our advantage is a strong base of clients, high share of repeat from those clients.
Speaker #1: That's how we power our growth. And present across 10 states. To supply to those customers. Obviously as the market grows as people realize that this is a higher profitability, high growth segment of the market they are announcing their plans to compete here.
Speaker #1: But we have been the proven market leaders for the last 15 years. And therefore we feel very confident about getting our share of the pie.
Speaker #1: That said it's it has always been and will remain a fragmented market. So we may be number one but as per some recently released statistics our market share is about 14%.
Speaker #1: So it's not a winner take fall market. You know it used to be 12% I think it's increased to about 14% now. But it's not a winner take fall market.
Speaker #1: If our share is 14% it means everyone else is splitting 85% between them. Right? So there's ample scope for everyone to play.
Speaker #2: Thank you so much sir. Thank you.
Speaker #1: Next question please. We lost our administrator.
Speaker #3: Brian. Are you there?
Speaker #1: Brian. Can you prompt the next question please?
Speaker #2: Hello.
Speaker #1: Yeah. Hi Brian. I think you're back now.
Speaker #2: Hello. Sir can you ask a question?
Speaker #1: Yeah. Why why don't you go ahead.
Speaker #2: Okay sir. So I have a a mainly two questions. One is with respect to renewable energy services. Sir if my understanding is right you correct me if I'm wrong.
Speaker #2: But under this division we build it's more or less more or less like a EPC business wherein we build renewable energy power plant for our client and then once the plant is commissioned we transfer the plant to the client.
Speaker #2: Right?
Speaker #1: Yeah. So what's the question?
Speaker #2: So I just want to understand this is a order that's a business model? Yeah. Yeah. So I just want to understand the business model and whether this is a order book driven business or a long term contract.
Speaker #2: Business.
Speaker #1: So so what we do is that the customer it it is the nature of the revenue is EPC and ONM. And usage of our transmission line.
Speaker #1: And the the way it works is this is only done for corporate customers. So it's still for C&I customers. But some customers may make an internal decision to deploy their own capital expenditure.
Speaker #1: You know to own their own facility and our clients who have publicly talked about this includes Sun Pharma, Himalaya Drugs and Chemicals, Honda Motorcycles, and many others.
Speaker #1: So they may make an internal boardroom decision to invest their own capex. We will do the EPC ONM we will build the plant for them within our farm.
Speaker #1: So it's always on their books. And our source of revenue here are two types. One is upfront margins of EPC on building it. And the second is sustained annuity business from doing ONM and allowing them use of our common transmission infrastructure in our solar and wind farms.
Speaker #1: So we we have a mix of both one time as well as recurring revenues in in in this business segment. It is an order book driven business.
Speaker #1: And currently the order book in terms of capacity that we have is 147 megawatts. We travel is pointing out to in in which is contracted yet to be executed.
Speaker #2: And so what's the order execution cycle for this business?
Speaker #1: Is the order to execution is definitely within 12 months.
Speaker #2: Yeah.
Speaker #1: Maybe even shorter but it's definitely within 12 months.
Speaker #2: Understood sir. And sir earlier with respect to the guidance you the management mentioned that 300 crores EBITDA for FY28. This is from renewable power sale only.
Speaker #2: Right? Or is it including the renewable energy service as well?
Speaker #1: Yeah. We we give a corporate level EBITDA guidance. It's obviously including both.
Speaker #2: Understood sir. And sir what's the last question from my side. What's the peak debt can we expect by FY26 28? Sorry.
Speaker #1: What what's the? Maybe a question please.
Speaker #2: Hello. Hello can you hear me sir?
Speaker #1: Yeah. So we we yeah. So we've given if you look at this page 10 we have put it up right now. We have provided that the steady state net debt corresponding to this 3000 crore EBITDA will be 16,000 crores.
Speaker #1: You know so we may have more debt then if we have debt for under construction assets. But we are saying like to like when you have 3000 crore of EBITDA from those assets the debt will be about 16,000 crores per assets corresponding debt.
Speaker #2: Understood sir. Thank you. Thank you so much. Thank you. We take the next question from the line of Puneet Gulathi from HSBC. Please go ahead.
Speaker #2: Puneet please accept the request. And unmute your from your end. Sir there is no response we'll move on to the next question which is from the line of Eshan from Antique Stock Broking.
Speaker #2: Please go ahead.
Speaker #3: Yeah. Hi sir. Thank you for taking my question. I just wanted to know if we could tell some Kannada around this wherein like what would be the tariffs jump using the best around like two offset the 70 75% cost energy for the customer.
Speaker #3: How many hours of this we are talking about? And what would be the capex?
Speaker #1: So typically yeah. So you know right now it does not form a substantial part of our capex program really for this year. Therefore firstly from a materiality perspective it is not material.
Speaker #1: Right? And it would be about two hours of storage is what the numbers correspond to. So that's what we are willing to talk about right now.
Speaker #3: And how much will be the jump in tariffs using this?
Speaker #1: Typically we have seen that we need about three rupees or so for just the three rupees or more for just the service of porting the electricity from daytime to evening.
Speaker #1: There may be more for generating the electricity in the daytime but the just the best as a service would be closer to three and a half or more is is our our expectation.
Speaker #3: Got it. And secondly I see that in our under construction book from last quarter to this quarter the tariff has gone up from 3.85 to four rupees.
Speaker #3: Just wanted to understand what was the reason for it. And secondly with the extension in ALCM the benefit will be passed on to the customers or will will it be like our reduced capex and as our increased returns?
Speaker #1: So I don't think the ALCM reduction or the ALCM benefit is a humongous one. It'll really apply to the volumes we were anyway building over the next three to four months.
Speaker #1: Those are contracted quantities and therefore there is no sort of tariff renegotiation there. The capex risk or benefit is to our account. So so that's on the next four months of this ALCM issuance.
Speaker #1: And yes the tariff is up now to about four rupees per unit of power. And you know for those already operating it's about 3.93.
Speaker #1: So those are the facts.
Speaker #3: Got it. Thank you.
Speaker #2: Thank you. We take the next question from the line of Puneet Gulathi from HSBC. Please go ahead.
Speaker #3: Yeah. Thanks so much for the opportunity. My first question is on the you know you had in on 31st of March you provided that the date of run rate EBITDA at 1870.
Speaker #3: Do you have a similar number as of 30th of June based on the capacity?
Speaker #1: No. Puneet the way we are looking at it is we we have historically experience that the run rate EBITDA at the close of a fiscal will typically be the EBITDA for the next year.
Speaker #1: Right? And or you know one to 1.1x EBITDA of the run rate EBITDA is actually our reported EBITDA for the next year. But of course there could be many issues which affected one way or the other.
Speaker #1: And therefore you know we we don't really publish a number every quarter of the run rate EBITDA because that gives a wrong indication to to the markets because assets also take some time to stabilize fully.
Speaker #1: So you know the way we would urge you to think about it is what was the run rate EBITDA last end of last year and therefore what is the likely EBITDA for this year.
Speaker #1: That's how to look at it. And I think run rate EBITDA numbers are better looked at on a end of fiscal basis.
Speaker #3: Understood. Secondly on the your your data center contracts are you still experiencing more 12 to 15 megawatt size contracts or have the size of contracts started increasing now?
Speaker #1: We we are I think overall seeing that the you know so firstly for our STU business right which is not customers or is with data centers located in the likes of Mumbai, Chennai, Bangalore.
Speaker #1: There the average per PPA is still about 13 megawatt or so on an average basis. Now of course our largest contracts there also would be about 150 megawatt.
Speaker #1: You you must have read a recent public announcement we signed with GACL something to that effect. As well as I think even with the data center clients the average size of contract is obviously above 13 megawatt.
Speaker #1: 13 megawatt is for the average for all the deals signed. For just data centers or for some of the largest deals it's obviously higher.
Speaker #1: Even in the STU segment. Now we have CTU segment which is more for the hyperscalers because their requirements also at a different scale. In that segment the average deal size is maybe I mean I think maybe about 200 megawatt per deal.
Speaker #1: Right? Would be the average. I don't have a firm number but maybe 200 250 or thereabouts. So that market for hyperscalers is of course very largely.
Speaker #3: And that's currently at VPPA level right? Not the actual supplier?
Speaker #1: That's currently at VPPA level but all of them have the option and put I would hazard a guess even the intention of taking direct supplies of those energy contracts into their data centers as in when those data centers begin operating.
Speaker #1: Because the hyperscalers today while they are building and have announced plans and so on they are not actually power consuming data centers owned by them yet.
Speaker #3: Understood. And lastly you know you one about 300 plus megawatt contracts in this quarter as well. Is it possible to get some sense of what sort of tariffs you would have experienced given that some of them will also have a best component especially in Rajasthan?
Speaker #1: So overall our you know our two things. We have about we're not giving quarter by quarter tariff numbers but for 2500 megawatt contracted yet to be built which is a number as of 30th June 2500 megawatt contracted yet to be built is about four rupees per unit of power.
Speaker #1: And out of this 2500 megawatt only about 150 megawatt or so is in the state of Rajasthan which obviously not significant to me. It's about six seven percent of that total component.
Speaker #1: And of that six seven percent some five seven percent must be best. So you know it's not a significant number at all. And I don't I think the way to look at that four rupees tariff for 2500 megawatt is this is what we are getting now without best.
Speaker #1: Right? That practically how to look at it.
Speaker #3: Understood. And lastly on the.
Speaker #1: And as I said earlier our internal estimate suggests our internal estimate suggests that we need three to four rupees per unit of power for best as a service which is just the act of quoting the electricity from daytime to evening.
Speaker #3: Okay. Three to four rupees per unit. Okay. Okay. And lastly just on the.
Speaker #1: Yes. Including cost of generation.
Speaker #3: Okay. Including cost of generation. And lastly on the EBITDA side there is a 31 crore of unallocated EBITDA. If you can just shed some light on that as well.
Speaker #1: So Puneet this is how we the accounting part is done. The the full EBITDA because there are certain expenses in the EBITDA the revenue is easy to allocate between two segments.
Speaker #1: But there are certain expenses given our business it's it's not very easy to just allocate based on the megawatt basis. So that remains unallocated.
Speaker #1: It's more of a accounting way to think about it guys is it's done allocation of revenue and cost to two different business segments is done as per accounting standards.
Speaker #1: And in consultation which is with our auditors which is KPMG. And therefore as per those accounting standards there would have been some unallocated cost or EBITDA which is sort of therefore identified that way.
Speaker #3: Okay. And just one more from my side. Any update on Beacon Air to when do you expect you know the the transportation line to fully get built and curtailment to completely go away?
Speaker #3: Anything you've heard from PGCL side?
Speaker #1: We we we don't know honestly in this number keeps changing. And therefore we think we should all be prudent and assume that there is heavy curtailment for the rest of the financial year.
Speaker #1: Obviously we fully respect and admire the speed and effort that the power grid and the government is making to rectify the issue. They are fully charged with it and there's a lot of interaction which happens between all members of the renewable energy industry and the government.
Speaker #1: But it's difficult to hazard a guess. So I would say that to be conservative we should assume it continues for the rest of the system.
Speaker #3: Understood. That's very helpful. Thank you so much and all the best.
Speaker #1: Thank you Puneet.
Speaker #2: Thank you. Participants who wish to ask a question please press star and one. We take the next question from the line of Neil Otwa from PGIM India Asset Management.
Speaker #2: Please go ahead.
Speaker #4: Yeah. Hi sir. Thanks for the opportunity and congratulations on a very strong set of numbers. So just one question. With respect to Tamil Nadu are we seeing any delays with respect to C&I project approvals with respect to the new government?
Speaker #4: Just wanted some insight on that.
Speaker #1: Thank you. I I think for there there was one or two months of just I would describe it as flux. I would not call it delay.
Speaker #1: You know sometimes when political administration changes there's just one or two months of flux. People are just waiting for some directions on how things are to move.
Speaker #1: But my you know we do a project review every month. The last one was just on this Saturday and I remember in Tamil Nadu now the approvals are moving and the issues are getting sorted out.
Speaker #1: So I don't think there is structural continuing delay. There was maybe one or two months of flux once the new sort of government took over.
Speaker #1: But I think it's behind us now.
Speaker #4: Sure sir. Thank you so much.
Speaker #2: Thank you. We take the next question from the line of Rajesh Vora from JN May. Venture please go ahead.
Speaker #5: Good afternoon gentlemen. Congrats on a strong growth and numbers. And I think the investor disclosures are amongst the best. So well done. I would like to ask what is the what is the competitive advantage your company has vis-a-vis competition in this business and what is the market share we have?
Speaker #1: So the Rajeshji thanks for your compliment. And I think the competitive advantage is around two or three things. First in this business any customer is contracting for the long run and therefore has a fairly high degree of has has therefore some amount of risk because they're contracting for 23 years and typically on day one a customer is putting in equity for a plant which is yet to be built.
Speaker #1: So the customer wants to be careful that whom am I doing this with and what is the certainty or the de-risking on the project coming up and therefore my savings starting.
Speaker #1: And there is the fact that we are already present in seven states have been the market leaders for the last 15 years. And have a pool of 600 plus customers who contribute typically three fourths or 75% or more of our new volume growth every year is a huge advantage.
Speaker #1: So that's one aspect of it. Second is even this customer needs whether he's an existing customer or a new customer needs to two or three key things from us.
Speaker #1: One a mix of wind and solar power in states where you can have both because just solar power is not enough. You need wind also to complement and meet evening peak and nighttime load.
Speaker #1: Whereas solar is more a daytime load. And in most of the major industrial states of India like Gujarat, Maharashtra, Karnataka and Tamil Nadu which are the fourth biggest C&I markets in this country there is both wind and solar.
Speaker #1: So first we are able to supply wind and solar in all of those key geographies. Second we we are able to you know because of our scale we have very large sites in each of those states.
Speaker #1: And then ability to add brownfield capacity relatively quickly. So that gives customers the confidence that this capacity will come up relatively quickly. So that's the second sort of advantage that that we do enjoy.
Speaker #1: So I think one moat is around 600 customers, 80% of our new volumes from them. And it's a real moat because customer has a risk of investing equity and what if the project doesn't come and so on.
Speaker #1: So you know that's an important one. Second is you know the fact that we are able to do both wind and solar and offer power across ten states because that's an important requirement of those customers.
Speaker #1: And therefore in the market where in group captives the average size per PPA is about 13 megawatt that does become a a critical success factor and advantage.
Speaker #1: And a root cause I always say sir is that you know what differentiates us from some of the other players and all the big boys have had different points in time tries very hard to win in this market.
Speaker #1: But what differentiates us is the fact that sheer focus this is 100% of our business for the last 15 16 years. Yes we appreciate that for a lot of big players they feel that this is an attractive segment of the market and we should do something there and all of you analysts only go and tell them are you look at their without storage tariff is four rupees what is your tariff.
Speaker #1: So you know they they feel the need to also say we will compete but we feel very confident about our ability to continue winning.
Speaker #1: Lastly I would highlight that this is not a winner takes all market. This is a highly fragmented market. Even a market leader like us has 14% or so market share.
Speaker #1: So you know we don't need to win every contract. Right? We are not in every state. We are not in every client discussion. That's fine.
Speaker #5: Very very useful. Very interesting perspective Guldeepji. The second question I would like to ask is what given the enormous opportunity that your business has what is the current organization team and infra setup in terms of stability?
Speaker #5: What level of renewable power installation and we can run successfully on an annual basis let's say two three years going forwards?
Speaker #1: Sure sir. Thank you. I'll answer it in two ways. I'll answer it in two ways sir. One is as you've seen over the past 12 months already we are adding at the pace of about 1750 megawatt a year this is what we've demonstrated in the past 12 months.
Speaker #1: So we've proven that our organizational machinery whether that does project development which is land buying evacuation and so on or that is engineering supply chain management project execution they can all deal with capacity addition at this pace.
Speaker #1: So this is one thing of the we work very hard over the last two or three years to increase our organizational capacity two years ago we were adding 500 megawatt a year we are now adding more than 1500 megawatt a year and we've demonstrated that by doing 1700 megawatt in the trailing 12 months.
Speaker #1: So that's firstly demonstrated organizational capacity. That said sir in any in any business which is growing so fast it would be wrong to say that we have no gap or no teams which do not need improvement.
Speaker #1: You know it is just not I I would say that someone is lying if they said that. And while you know on an analyst call it would be inappropriate to share specific areas but I can assure you that in just last Friday's board meeting we did discuss five six areas of gaps and what we are doing to address them with the NRC subcommittee of the board.
Speaker #1: So it is something which we consistently do to ensure that our organizational capacity to keep growing and you know expand into the bigger shoes we are getting into is intact.
Speaker #5: That's that's very useful. If I can ask the last question in the in the last couple of years or since March 24 AI data center segment has grown something like 10x right?
Speaker #1: Yeah.
Speaker #5: And and and non non data center industrial customer has doubled. Right?
Speaker #1: That's right sir.
Speaker #5: Yeah. Okay. So so wonderful. Wonderful. So my next question is can we repeat that in the following two years? Or is there a potential?
Speaker #1: Sir. If if if you look at it this way the way I would look at it is we've had a 3x growth in contracted capacity in the past two years.
