Acme Solar Holdings Limited (ACMESOLAR) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the ACMA Solar Holdings Ltd. Q4 and FI26 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. And now I hand the conference over to Mr. Nikun Said from MEFG. Thank you, and over to you, Nikunj.

Thank you, Nirav. Good morning, everyone. Welcome to Q4 and F526 Earnings Conference Call of Acme Solar Holdings Limited. From the management, we have with us Mr. Manoj Kumar Upadhyay, Chairman and Managing Director, Mr. Nikhil Dingra, CEO, Mr. Arun Chopra, CFO, and Mr. Ankit Parma, Head of Corporate Finance. Now, I would like to hand over the call to the management. Thank you for their opening remarks. Thank you and over to you, sir.

Thank you, Nikunj. Good morning, everyone. Thank you all for joining us today. I'm Nikhil Dingra, CEO of the company. I would like to begin by expressing my sincere gratitude to Rajat Kumar Singh for his valuable contributions to the company during his tenure as the CFO. He has decided to pursue career opportunities outside of ACME. I wish him all the best in his future endeavors. Arun Chopra has now been appointed as the company CFO. And I'd like to invite him to take over and walk us through the highlights of Q4 and FY26 for us.

It's my pleasure to share the highlights of our Q4 and FY26 performance. I would like to start with sector highlights. India has observed its all-time highest peak electricity demand of 256 GW on 25th April 26. This milestone surpasses the previous all-time high of 250 GW recorded on 30th May 24, and exceeds the peak of 245 GW observed on 9th January 26. The rise in demand is in line with the progression of summer conditions across the country, with electricity consumption witnessing a significant growth of 8.9% during the month of April 26. India continues to maintain strong momentum and capacity additions, with approximately 55 gigawatt of RE added in financial year 26, taking cumulative renewable energy capacity to 283 gigawatts. Total power generation during FY26 reached 1,845 billion units, with share of non-fazil fuels in total generation reaching 29%, roughly 538. In a significant milestone, India achieved 50% of its cumulative electric power installed capacity from non-fossil fuel sources in June 25, five years ahead of the 2030 target set under its nationality determined. Thank you. Merchant and short-term control. We bring net realization value of approximately 2.2. Thank you. Thank you. Thank you. Thank you. for accordingly in the finance cost. EBITDA margin of over 90%, both for the quarter and full year, on account of favorably operating leverage and optimized operational efficiency. PADS stood at INR 138 crore for the quarter and INR 498 crore for the year, with a margin of 96% and 19.9% respectively. Now, at last, coming to operational metrics for the quarter. We generated 1,720 million units in Q4. Coming to our debt optimization efforts. During the year, we secured financing of around 15,000 crores for various under construction projects and refinanced debt amounting to around 3,300 crores. I will pass the update for now. Two gigawatt of operational projects have an assigned credit rating of AA-. Thank you. Advancing Commission. The future operational capacity is expected to have an operating battery portfolio of around 10 GWh, along with 1.5 GWh of contracted generation capacities. Thank you. Short- and medium-term best opportunities to capitalize on evolving market demand.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the questions are assembled. Participants, you may press star and 1 to ask the question. The first question comes from the line of Puneet from HSBC. Please go ahead.

Thank you so much for the opportunity and congratulations on good performance. My first question is on your battery side. Can you talk about how much of the battery cost you capitalized in the previous year and how much have you spent so far in the 2.3 gigawatt that is now fully commissioned?

Hi, Paneet. Thanks for the query. So, in terms of last quarter, this quarter, we have done approximately around 1200 crores of IPEX on the battery. I think for this quarter, it is still going on. So, we will update you once this quarter finishes. But in the last quarter, we did around, in this quarter so far? How?

Current quarter?

Basically, last quarter was around 1000 to 1200 crores.

And how much was commissioned till last quarter? Yeah, just in capacity terms as well?

1.3.

Second is if you can also give a sense of what is the run rate EBITDA you are making out of your existing capacity with and without BEST so far.

So 87% is our bidda for this year, right? It is in the range of 88-89%, I think 91%.

No, I meant rupees per road from the 2,990 capacity.

If you look at FY26, so majorly, you know, whatever this 3 gigawatt is operational, so that was primarily running in 26. So give or take, for the last full year, our EBITDA, including other income, has been around 2,200 odd crore. This primarily includes revenue from, you know, sale of power only from the PPA projects. However, given that the batteries, you know, came in various phases in the last quarter, especially in March, probably the running at Abilta, you will realize... As I mentioned, 2.3 GWh is currently operational and of course it is running on a merchant basis and as Arun And last quarter there was almost nothing from the battery.

So, 2.2 crore per day on a 2300 megawatt hour battery, right? Yeah, yeah, yeah. And lastly, if you can also talk about how have your new solar plants been operating in terms of PLF? So, what was commissioned in FY25, what sort of PLF did they end up generating for 26?

So, our seeker plant basically got commissioned in this year, right, and it is doing close to around 29 to 30% CF for the overall year. So, majority of the projects, Puneet, are in Rajasthan, and roughly that capacity is roughly 2200 megawatts. So, for the last quarter, I think the PLF has been around 28% plus for these plants.

On a full year, 29 to 30 is what you said. For the full year basis, you said 29 to 30% from the new plants.

Yeah, for the new plant, because we have a higher DC installed there, so it has a higher CUF. For the full year, it's been close to 26% for the entire portfolio. He's asking about Rajasthan. Got it.

And lastly, there was this Secchi ISDS hybrid plant-6 scheme. which got a regulatory approval for 3.25, and now it says that there is a battery inclusion. Can you talk about how has the economics changed there?

You're talking about the PPA signed, right?

Yeah, but it got approved, right?

Yeah, it got approved, right. So basically, what happens is most of the states want battery installation along with the project. So it basically keeps the return in high teens only. So it does not impact really the returns from this thing. But of course, we need to satisfy the customer requirement in terms of the power mix they want, because everybody needs peak power now. So that is where we need to offer that one hour of battery.

Okay, understood. That's what I said. Thank you so much and all the best. Thank you, Puneet.

Thank you. Next question is from the line of Karpik Sharma from Anandwati. Please go ahead.

Hello, sir. Congrats on the telephone numbers. I hope I'm audible.

Yes, please. Yes. Yes, sir.

Given the, just continuing from the previous participants, given the rising concentration of projects in Rajasthan and ongoing transmission and grid constraints in the strait, Is there any curtailment impact that we've had, and if yes, could you quantify in what happened in Q4 or the full year, in EBITDA loss, and how are you thinking about future project allocations like Gujarat or Maharashtra, if there is any?

Right, right, right, right. That's a very relevant point. The key thing is, in terms of the curtailment, which... Where are you connected in terms of the transmission system? So, we have, you can say, around two projects only out of our whole portfolio, which are in Rajasthan connected to the state grid. Rest of our portfolio, by and large, is on the central grid, where you are compensated for the curtailment through the regulatory mechanism. So, in the whole year, we were, of course, and in curtailment also, there are two kinds of curtailments where you don't get a long-term open access. Like, which happened with our seeker plant before the full commissioning, because the long-term open access was not active. So that is like a pre-COD or a pre-DNA kind of a curtailment, which is not usually a grid-related curtailment. That is where the infrastructure is not yet ready, but you are ready with the plant. So I would not call that a curtailment. But adjusted for that, for the whole year, we have only 5 to 6 crores of impact on the curtailment, which is the real curtailment. And, of course, on STU, it was only three crores in Rajasthan for the whole year, state-connected projects. And the two, three crores was on the account of maintenance done by the grid operator on account of the, on account of, you can say, the O&M, which they do for that. So, that was the impact on curtailment on our project during the year.

Understood. And the future project allegation, if you could give any?

So all of our projects are in the CTU. So we have consciously built a portfolio with, you can say, all the central counterparties on CTU. So we don't have, and also that is another reason we have not gone aggressive on the CNI because they are all state projects we have to do if you want to serve the actual consumer. So in terms of all our CTU-connected projects with CTU-connected substations, where you are regularly protected from the customer payments are there, irrespective of, you can say, the grid curtailment. So, they are all on the, you can say, various substations in Rajasthan, Gujarat, Madhya Pradesh, Andhra Pradesh, Karnataka. So, once the long-term open access is granted, then you are protected from curtailment on a CTO-connected substation.

Understood, sir. So, just continuing. Can I ask my second question?

No, just a minute. I would like to clarify. My name is Manoj. Most of the CTU-connected projects, we are installing the battery. So, in fact, such curtailment sometimes provides you opportunity to sell the power in the peak or in the evening. So, all our CTU-connected plants, that's what we are focusing. All our CTU-connected plants will have a battery available. So, whenever that curtailment will happen, we will charge the battery, and we will use that power, right, while we will get compensated for the curtailment, but we will use the free power also to charge the battery. Got it. Got it, sir. Thank you.

As the battery installation happens, just on that, just to finish that point, as the battery installation happens, the curtailment issue will be further reduced because as more and more battery gets installed in Rajasthan, and it is by and large happening in Rajasthan because they have the largest operational solar, so you will see that the transmission system improves a lot with the battery installation.

Understood, understood, sir. So we highlighted that there was a sharp improvement in receivables and the DSO has come down to 14 days, which was at one point in time 180 days. So despite the significant scale up, could you help us understand whether this is largely driven by like one-time collections or is this like a structural shift that you are seeing in the portfolio mix when you say that it's going to be more central offtakers and how sustainable this working capital profile is going forward?

So see, our portfolio, as it gets more operational, it is shifting towards 100% central. All of our under-construction projects are 100% central, where they take a cash discount. So, it's essentially, and they pay in 10 days. Basically, in 30 days, if you pay, you get a cash discount. So, that is where they take a cash discount. So, that is why we are getting a 15 days kind of a receivable cycle today. So, which is more or less not because of one-off. It is the norm. Yeah. So, Ankit, you want to add? Earlier, I think the high receivable days you were talking about, so that pertains to a very, you know, you can say a 523 and before that. And I think that point of time, like Nikhil mentioned, the contribution of Central Optica was less. And there are, of course, some payment issues, especially from a couple of discoms as well, especially Telangana and Andhra. Even that payment has normalized now, right?

Is that the effect that we've seen in the trade receivables which have gone down 13% year on year? Yes.

Yeah, yeah. Actually, there was a regulatory reform which the government has implemented called LPS, right? Under that LPS late payment surcharge scheme, two, three states which were delayed actually because of the various regulatory issues. There were some court cases in Amra Pradesh. All those dues are now settled, and they are paying on time because this LPS scheme is very strict. If they don't pay on time, you inform to property portal, and they will get disconnected from the power. So, this discipline is helping, especially for the state project, but mostly now what has happened, our projects are central projects. So, central projects, technically, they are paid in just six, seven days because they want to take a cash discount.

Thank you so much.

Thank you. Next question is from line of Aniket Mittal from SBI Mutual Fund. Please go ahead.

Thank you. First question was just on the cash flow. So when I look at the cash flow statement, they're seeing a very large increase in the non-current assets. Some other balance sheet items which is impacting the cash flow from operations. Just wanted to understand that.

Which number you are referring to and what is the number?

So if I look at the non-current assets in the balance sheet, so looking at the cash flow statement, cash flows from operations have come in lower on a YOY basis, partly I think because the base for last year was higher, but when I look at the balance sheet, there's been a sharp jump in the other non-current assets and also in the other financial non-current assets. Just trying to understand what is happening.

Because of the capex buying which is happening, so these are mainly, it mainly includes the capital credit, actually.

Okay, so, and what is the capital advances number then?

This is pertaining to what? of material which has been given to various and that the material will come in over a period of time.

Let's say battery contracts, we have typically 10% advance up front, where we get a bank guarantee against it. Similarly, the turbines also we give 20% advance. So these are capital advances you need to give to supplier, where they give you a BG against that.

Okay, this is largely because of battery and probably some weight.

Typically, we don't give any advance, but from an international procurement perspective and large equipment, we have to because it helps you to mind the supplier also in terms of the contract honoring and also giving him advance to purchase raw material because if you don't pay advance, he will not have money to purchase the raw material.

And when I look at the PLF number on a YY basis, I see a 1% decline. What's the reason for that for this quarter?

Water could be a function of, of course, the lower radiation and curtailment. These two could be the only two factors which would have impacted. On a YOI basis, of course, the larger capacity. It is a larger capacity, so, of course, the denominator is higher. But these are the two only factors because it is determined by seasonality as well. So, these are the factors. In terms of, we can give you a side-by-side, I think, analysis, but broadly, it is because of these factors.

In the presentation, within the under-construction portfolio, I also see a merchant base of 654 MWh. Are we putting some gas purely on a merchant basis for this 14...

Merchant, as of now, it is slated to go to a PPA, which we are supposed to sign very shortly. Most likely, because it is pure battery, which is taking power from the grid and giving to the grid, it can be fitted in any of these peak power projects, PPA we have, which we have not yet signed, with a tariff of either 6.28 or similar, and there are a lot of bids coming in where we can deploy this best. It gives us some flexibility, and we also wanted to get it financed on a merchant basis because it gives us some flexibility in terms of getting ready for early installation because it does not tie you to a specific PPA. So in terms of the financing and in terms of the early commissioning, we have installed it like this, but of course it will go to a PPA.

And for FY27, how are we placed in terms of the commissioning of the SGV and FDRE project and the NTPC hybrid project?

There are, on the whole, commissioning during the year, I would like to explain. There is a Nemach substation, which will be the first commissioning from our side, because that's the substation which is more or less ready, and it will be charged in June, because, you know, the commissionings are determined by the FDRE commissioning, since we are asking. They are determined by the solar connectivity being ready. So, that's, that's. That will commission our two plants, one is the NHPC and another is the TATA. So that is the first commissioning from our side on the FDRE. Then, of course, the substation at Fatehgarh, which will have the SGVN whole 570, that has a short-term open access available right now. The long-term open access, as per CTU, is in March 27th. So the full FDRE for SGVN, but will be ready by FY27 end. So that's the FDRE. And the NTPC, we are ready with the solar. But of course, there is a long-term open access there also, which is slated to be commissioned by December 26. And our Pachora wind component is also ready, but that is also slated for, you can say, a couple of quarters later. So by March 27, all this will be commissioned. In terms of the other commissionings we are targeting, there is Pavagada, Anantapur, which are also going to come up during this year as per the CTU timeline. What we are trying to do is commission the batteries at our operational substations in Fatigarh 1, which we have 1,000 megawatt. Then Fatigarh 2, which is, again, the Fatigarh 1, sorry, is 1,200 megawatt. Fatigarh 2 is 1,000 megawatt where we have a STOA. In STOA, you can transmit all the battery. So, these, and then we have Decanate 3, again, where Bay is ready, so you can transmit the battery power. And, of course, you can say around aggregating to around 2,500 megawatts of ready connectivity for selling battery power during night is what is ready with us, from where we are trying to transmit 10 gigawatt hour of battery during the next of the calendar year. So, in terms of commissionings, So, the battery commissionings are going to happen early because we have ordered a battery. The battery is arriving every month. And also, in parallel, as and when the CTU substations are getting charged, we will commission the solar also. In terms of preparedness, the transmission line, the balance of system, the equipment delivery, they are all on track. And we are trying to be co-terminus with the CTU timelines of these substations. And we also want to... We will continue from the battery sales, from the power sales through nighttime power, which is now allowed as per the PPA construct and as per the clarification given by MNRE. So we will see a good jump on the revenue side because of the nighttime installations. Which will more than compensate for, you can say, the CTU timelines getting shifted from one quarter to another. So that is the reason we have pre-poned the battery installation, and we are commissioning it at the operational substations and not in the greenfield substations. That is the key thing, and we have 2,500 megawatts of ready substations and connectivity, which are going to go live in the near future.

What would be a battery total install base, let's say six months down the line and one year down the line?

So, 10 gigawatt hour is our total target, and of course, it is completely dependent on a number of factors in terms of the supply of material, in terms of the connectivity, but as far as connectivity is concerned, we can do this 10 gigawatt hour because we do have the connectivity, we do have the financing available, we do have the supply type available, But of course, in terms of the various factors which are interplay in terms of the supply of material, in terms of, you can say, geopolitical factors, those are the only uncertainties. But as far as the CTU link is concerned, and as far as the other dependencies go, it has much less external dependencies than, you can say, a CTU-connected solar plant.

Good. I'll join back in the queue for further questions. Thank you.

Thank you, Anika. Thank you. Next question is from the line of Ishan from Antics Talkbroking. Please go ahead.

Yeah, good one, sir. Thank you for taking my question. CELC has recently proposed a new mechanism for LOA-based connectivity. So, wherein the capacities have been delayed for one year, there is a surrendering exit option for those connectivity. So, I just wanted to know how much of that is connected when we fall into this and what is your strategy to basically convert it?

Right, right, right. No, that's a very welcome move from CRC, which CRC has done. It's a discussion paper right now, and they will formalize it after getting comments from all. So, that's a good move. In terms of how it will work is, if you are not able to sign PPAs for a certain amount of LOA, and you have been, and the Naval Energy Implementation Agency really clarifies that these PPAs cannot be signed, then, of course, that developer is free to develop it in a merchant basis or free to use it in another LOA. As far as we are concerned, you know, we have around 6.2 gigawatts of signed PPA, which we are constructing. And so, which is a very sort of, so our LOAs are more or less converted into PPA.

3.2.

Yeah, in terms of the construction, if you remove the three operational for us, we have 3.2 gigawatt of LOA which have converted into PPA, which we are constructing. There is 1.8 gigawatts of PPAs we have won recently, and there are some which are older. You can say around. 850 megawatts of older PPAs, which are in various stages of discussions. But we are not anywhere near to that timeline where the RIA will say that PPA will not be signed because they are trying their best and all the agencies are trying their best to get it signed. There are various discussions at various forums to get it signed. But just in case if this happens, these will be for us, our strategy will be to use them for future bids or to use them for, you can say, for battery-connected projects in future. So we will use this connectivity in any case because we have a good pipeline of PPAs where there is a lot of bids which are coming which are now backed by a solid demand from states like a thermal mimic which is coming which will require a large amount of capex and a large amount of solar and battery. So, and there are a lot of other bits which are coming, which we will use the connectivity for. So, we will keep the connectivity with us, and we don't foresee that our LOAs will, we will have to surrender. But just in case it happens, we will have a backup plan ready by then.

Got it. That's very clear. Just to follow up on that and on the industry level only, we have seen like around three plus gigawatt of PPA conversion from LOA capacity. And over one of the industry, there was a huge buildup of LOA capacity. So, how do you see like Descom, what types of capacity are the Descom preferring to convert from LOA to PPA? And also, what is your overall view in the RE tendering momentum in FK27, given the peak demand is growing strong?

So the good thing is because of the huge amount of bids which they did, of course, more than the demand, most of the developers have a sizable PPAs to execute, and that is giving everybody a sizable, you can say, a capex opportunity or a revenue opportunity. And, of course, there are a lot of unsigned PPAs. So, in terms of the PPAs getting signed and demand coming up, there is a demand for peak power. So, which does not have a battery is hard sell as far as the states are concerned. So, everybody needs some amount of peak power at least. If not four hours, at least one hour, two hours. So, something which, and if not, so plain solar is the hardest to sell, right? But some states have a typical demand for solar because they are putting up their PSP or they are putting up their thermal is some distance away. So very few states have a plain solar demand. So in terms of the pecking order, you can say peak power is selling fastest. The partial peak power is second-second fastest, and then the wind is selling well, but wind opportunities are very less and people are doing less wind, and the solar is selling the slowest. In terms of the bids for this year, we see that the bids will be lesser than last year, but the PPS should be faster again because they are not doing bids until the previous ones get at least allocated or signed in some way, and the RIA is one, so focus will come. In terms of, there is only Secchi, which will now be aggregating demand, so they'll have some sort of, you can say, aggregation power, which being a sole entity gives them in terms of the, with the states. So, they are aggregating demand for, let's say, thermal kind of tender or peak power tender or a CFD tender, which is, which will find takers because that is purely basis demand. They are doing wind tender, they are doing PSP tender. There are at least 5 gigawatts of tender currently open with Secchi, which has... Which is 2 gigawatts of wind, around some 1 gigawatt of PSP, then there is this thermal mimic, there is CFD. So, you will see bids of a level of 15 to 20 gigawatts. Of course, this can change depending on the shortage this year, so the states can change their behavior. And not all states can afford to do state-level bids because there is little renewal in some states. They'll continue to buy from SECI because of the competitive rates which these go. And also there are some states which will do on their own, where also they'll be successful, like southern states or Maharashtra or you can say Gujarat. So there also you'll see some growth and bids coming up, like UP recently called for a bid wherein they called for a peak power in their own, where you could charge from anywhere in the country, but the battery is installed in their place. So those kind of bits you will see. So a lot of peak power. Peak power is something which everybody wants. So bits focused around that will be successful.

I would like to add that although the big size will be only big capacity in next year, this year, adding state and the state will be 20 to 30 gigawatts. But the overall solar or overall the capex requirement will be higher than the last year because what is going to happen in the plain manila source solar is 3, 4 crores, 4 crores per megawatt. But the current bit which is happening, for example, mimicking the thermal power or mimicking that longer duration storage, solar storage. They will tell you a very large solar behind the battery. So technically, maybe 25 to 30 gigawatt will technically mean solar of 40 to 50 gigawatt. So overall, if you see that, the name of the, actually configuration of the procurement will change, but deployment of solar will remain 40 to 50 gigawatt.

Just to add here, even if you look at the CRC connectivity rules, when they are asked to put batteries, they have made it mandatory to put solar in the three years, once you take a connectivity. So, the solar is mandatory to be installed if you are taking connectivity under certain guidelines, like 5.2 regulation. So, they also want their connectivity to be appropriately utilized. So, you will see battery linked solar installations coming up very fast, and pure battery installations will be very less. Yeah.

Sure, sure. Just one last question on the standalone battery. What is our IRR expected IRR from that 550 megawatt project and what is the end of the life value for the VSS in that particular project?

Our project is currently, basically, the tariff is adopted with a caveat, so it is not yet started. But in terms of the IRR for that project, you were asking? IRR is in, again, in terms of mid to high teens for that project, because there is not much transmission infrastructure to be put. It's a 33 kV level installation. And, but the zero date for that project has not started for us, so we have not really finalized the CAPEX because the state regulator has really asked that on the trading margin of NHBC, because in this case, it's a pure leasing and they are getting a VGF, so it is in terms of whether they should get a 0.5% margin or a 7-pesa margin, so that is being debated, so zero date has not yet started for us. We'll be able to update you once the zero date has started. But broadly, we are telling you the bid return when we bid it. And also, in terms of the end of life assumptions, these batteries are basically slated to run for 8,000 to 10,000 cycles. Right. So in terms of, I think that depends on the PPA, it's a single cycle or a double cycle. I think it's a single cycle or a double cycle. It's a very small project in the overall portfolio because this is 550 megawatt hour, but correspondingly for other projects that we have, which are 5k watt infrastructure, that will require installation of around 17 gigawatt hour of battery. So it's more just like the small project that you're talking about, it's more like a leasing model, wherein you're not putting any generation storage, you're just storing the power, which is you're getting from the... So those are the bits we have, it's a one bit out of the portfolio of 8 GHz. So we are not focusing at all on those bits. And like Ankit mentioned, the batteries which are part of the overall solar, wind and FDRE mix, the peak power mix, those will be, you can say, 99% of the Gpx. This is less than 1% of the Gpx.

Got it, sir. Thank you. Those are my questions.

Thank you. Next question is from the line of the roof. Machul from HDFC-AMC. Please go ahead.

Yes, sir. Thank you so much. Sir, if you look at your gross block increase for the year, it's about 3,400 crores YI, approximately, what you have reported. And your run rate EBITDA would have increased by about, I think, 300 odd crores. So it was 1,700 crores last year and it's about 2,000 crores this year. So the gross block to EBITDA run rate is about 11x, which is very worse off versus what you typically do. I'm just trying to understand what I'm missing here.

The cost block has increased by around 3,000-odd crores, right, in terms of the capitalization, right. So in terms of the, what you are seeing, not seeing is the, you can say, the wind has not really started performing, first of all, because wind has got installed in the infrasation phases.

Yes, but that's included in your rent rate of 2,000-odd crores, right?

No, no. See, the run rate EBITDA is basically, in terms of the last month, it basically got commissioned at the fag end of the year. And so run rate EBITDA is, what are you talking about is the reported EBITDA or the run rate EBITDA?

No, run rate EBITDA. So in Q3, I reported run rate EBITDA of about 2,100 explodes. I think largely all your projects by commission were then, including the win. Probably a small portion was remaining. Or is it probably the gross block number includes the BAC3 which was commissioned by the end of the year for which the run rate EBITDA is not part of it?

It definitely includes the, we can give you the commission projects for the full, basically the run rate EBITDA is for the 12 months number. We have, I think we don't have that number in this year because these, the whole gross block will not be operating for the 12 months.

So, out of the 3,460 crores, roughly 1,000 to 1,100 crores is related to battery, which...

Ah, okay. I think that explains that. Yeah. Yeah. So, that explains it very well. So, 1,000, if I remove 1,000, that's the... your gross block is increased by about 2,300, and that explains it.

Yeah. Yeah.

Got it. So, perfect. The second question is on the MNRE clarification that you highlighted. Now, does it mean that for an FDRE project, if you are commissioning a battery early, the charging of the battery can happen through a conventional power, which is now allowed? Is that the approval which we have got, or the regulation which has changed?

Yes, it is allowed to be sold in the merchant. Basically, it is allowed to be sold outside of the, because since it's a non-renewable power, you can sell it outside the, to your, not to your off-ticker, to anybody you want, till the time you are not installed renewable behind the battery. It is not a renewable power. So, it is, that is the clarification they have explained, which was already part of the PPA, but they have clarified it.

So, for example, for an MDR-E project, I would like to add it here that even if you have installed the solar panel, if you are not connected with the battery, for example, if your LTE is not right now operational, Most of our projects are actually connected with the brownfield of power gates for the station. That means we can energize our transmission line, we can energize the project well before our connectivity timeline or our PPA timeline. What we are doing is actually we are installing the solar and we are installing the entire power generation also, but we are not connecting it. Because the moment we connect it, it will be treated as a part of FDRE. Because right now in the summer, the price is very good. We are not connecting that, we are just connecting the battery and charging from the grid and selling it. That is giving us a very good return. So we are doing purposely, but the day that COD timeline comes in, LTA rate comes in, the whole thing will get integrated and go as FDRE.

We are deferring the CAPEX also on the solar side because it doesn't make sense to call modules at site and keep them here because what we are doing is we are deferring the solar part of CAPEX. We are not installing the modules because of course you

can get the cheaper merchant power from the exchange and also the interest during construction is saved.

So there is no reason to do a solar CAPEX until your LTO is operational. So we are deferring that also which is helping us

And the last question is, you mentioned about the commissioning target of your generation assets for this year, but if you can give the number what you are targeting to commission based on, of generation assets, based on whatever transmission visibility you have, in megawatt terms.

So we are targeting 1.5 gigawatts of projects in this financial year, right, and And around 10 gigawatt hour of battery. So, this 10kWh of battery may be for those projects which are not included in this 1.5, because for 1.5, it will be maybe 5kWh, but we are charging the battery ahead of time.

Got it. Yeah. Perfect. Yes, sir. Thank you so much, and all the rest. Thank you.

Thank you, sir.

Thank you. Next question is from the line of Dhruvind Shah from HDFC Securities. Please, go ahead.

Yeah, hi, sir.

I think my question was answered in the previous session, but I just wanted to clarify the 10 gigawatt that you said we are planning to commission this year. How much of it would be on merchant basis? And what is the kind of EBITDA margin that you can expect on these best capacities that operate on merchant basis? That's it.

Yeah, so see, in terms of the, all of it will start on a, other than the, you can say around 1200 megawatt hour to 1500 megawatt hour, which will be commissioned on the FDRE format, because of the NIMAT substation, which I mentioned earlier, rest of it will start on the merchant basis in this financial year, because the substations will get, start charging in the FAG end of the year only. So, you will see around 8.5 gigawatt hour out of this 10 gigawatt hour would be on merchant, and 1.5 gigawatt hour would be in the FDRE format. In terms of the EBITDA realization, Ankita, I'll request you to go. Right. On the EBITDA margin, look, it's a function of at what cost you are procuring and, of course, at what price you are selling. But assuming, you know, a tariff arbitrage of 6 rupees, which means selling the power at 8 rupees, which, of course, more than that we are currently seeing, and processing the power at 2 rupees, so give or take the margin will be around 75 to 80 percent, the EBITDA margin.

All right.

That was very helpful, sir.

Thank you.

Thank you. Next question is from the line of Achal Jalan. From Rotaswell, please go ahead.

Hello, thank you for taking my question. So, sir, in the first slide for under construction portfolio, a total of 3,282 million dollars plus 12 million dollars.

Achal, sorry to interrupt. You're sounding distant. Can you see him closer towards the fore and top?

Am I audible now?

Yes.

So, my question is that in the first slide for under construction portfolio, a total of 3280 megawatt plus 1200 gigawatt hour of BES portfolio is given. So, by when will this be completely commercialized, the whole under construction portfolio?

Yeah, there is a second slide also, which is PPA yet to be signed. But on the PPA signed, yeah, so these will be commissioned by FY28. Battery we are putting up earlier, like we mentioned earlier.

Yes, yes. Okay, sir. Thank you.

Thank you. Thank you.

Next question is from Laino Swetha Jain. From Mananwati, please go ahead.

Thank you for taking the questions. A couple of questions. On this best arbitrage that we're talking about, you know, using conventional power and then discharging at peak demand, how long do we see that this arbitrage situation should sustain into the future?

So, this is anybody's guess in terms of that?

Let me take this answer. Actually, right now, the current calculation of CA is you need around 200 gigawatt hour of battery to come to this. If you don't add any more solar. But what is happening is also another 40-50 gigawatt of FDRE and this one where the sender has happened, they will get added in the daytime. So technically what is happening, as long as you are adding more and more daytime solar, you need more battery in the evening. So that's a formula. Right now that formula tells we need a 200 gigawatt hour. But what has also happened is that the thermal power in the evening, it is already at 6.5 rupees. If you run at full capacity, and most of the capacity, thermal power cannot come up fast and cannot go down, so they operate around 60-70% capacity. So considering their capital cost, full capital cost in this one, they are around 9 and 10 rupees. So battery will remain, my guess is battery will remain at 9 to 10 rupees in the peak hour time. And as a country, we will need around 200 to 300 gigawatt hour, considering the current installation and the planned installation of this year. But as and when we are adding more and more solar, it will keep on going up.

So, if you look at the last history, if you look at the last few years, we have seen that the annual price remains at around 7 to 8 rupees for the last few years. Even when we have low demand, in terms of the last few years, we had relatively less demand than before. But even in those slow years, we had a realization for peak power for around 7-8 years. But now that the gas is constrained, it is slightly elevated, and it is likely And we are seeing some peak demand, which is much, much higher than last year. So we see that, like Manojji mentioned, at least for around four or five years, we don't see this going down.

That's helpful. Secondly, sir, when you mentioned that majority, almost 50% of our projects would be on the CTU side of the business, wanted to understand the transmission and distribution angle. Are we facing lack in terms of substation connectivity at the STU level or the CTU level from an industry perspective? And how do you see the projects getting commissioned when we shift the portfolio to this 80% mark that we're looking at?

So, see, in terms of the CTU substations, what happens is there is a lot of linkages. They are mostly on time with regards to their local infrastructure regarding bay construction and equipment ordering. Where they lag is the components relating to transmission line interconnection and right-of-way issues, because of which there is a timeline delay at their end. And the central transmission utility is in turn dependent on the various companies which bid for them. So they get a timeline, basically, delay on their part. So the CTU is a very structured entity where they give you a firm date every quarter when their subscription is coming up. So as far as we are concerned, we plan our project basis at declared date because that's the obligation on our part to commission the project by that date, and we get extension till the time that thing is coming up. So, till date, they have done a wonderful job of give and take. Six months' delay. They have done a wonderful job of coming up with the transmission capacity, and we have also been in sync with that, let's say, a delay of six months. We also try and sync our KPEX and sync our work along with that. So, as a renewable player, we can't really function without the transmission, so we have to sync up. So, there has been a delay, but for a grid of this size and scale, which is the largest in the world single grid, I think they have done a good job. So, six-month delay, I think, very much should be taken in a good light. As far as STU is concerned, we are not building any projects on STU. The Gujarat project of wind we did was the only project we have done on the state grid. There is no project in our pipeline other than that battery we are installing on the Andhra Pradesh, very small, 550 MWh. There is no project on the state grid. And state grid is a different organization structure. It depends on each and every different states. Some states are more efficient, some states are not. And some states don't have renewable energy potential, so they don't really develop their grid as much. But states like Gujarat are quite good, I must say, and of course, in terms of getting the transmission up and running on time. But it varies from state to state. But as far as we are concerned, state STU are not a factor. And as far as the portfolio realization and risk and everything is concerned, CTO is a much better place to be in terms of the curtailment and in terms of the predictability of the subsistence coming up on time and in terms of central grants and monitoring at every level.

And just lastly, are project blueprints already factor in the six-month kind of a delay on a nominal basis?

Yeah, so what we see, typically, this can't be generalized. This is on a generic overall portfolio level. But some substations, you can say around 60% are on time. The maximum delay is typically six months. In some cases, because of some unfortunate event, it could be more. But typically, like I mentioned, our Nemaj substation is on time, right? Some substations are delayed. So, not every substation is delayed, but wherever it is delayed, and we know it from now, we will not call for our modules, we will defer our CAPEX. What we can do about it? I can tell you what we can do about it. We can defer our sizable CAPEX of modules because modules are available just in time and there is sufficient capacity of that available in India. So we will not call for modules because it's around 60% of a solar plant CAPEX or sometimes more. So you don't do that. You keep the service-related work ready, the transmission line ready, the substation ready, because those are typically, you can say, 20-25% of the overall project cost. But these are long-lead items. So you do that, you don't call your modules, you keep your everything else ready. And that's how you defer the CAPEX. And that is how the industry has been doing and syncing up with the power grid or CTU. And also you get extensions also. The good thing is you don't get any penalty because of the delay because of this. And that's how the central renewal program has been running because in sync with the grid.

So, just one last question. So, there is no risk in such cases and there would be no risk in terms of PPS getting not signed or, you know, getting the discounts or not eager to sign the PPS from the developer's perspective?

So, see, that's a different question. See, in terms of the, if you don't have a connectivity, there are two things on PPA signing bit, right? PPA signing, when you go to a DISCOM, they look for what is the declared date of your substation, right? And they look for a declared date of a substation getting charged in near term, right? So, if you are... You will get a better priority from Discom because customers have more visibility to your project, right? Because, but if you, if there is somebody whose subsistence is coming up in, if the connectivity he has is for 2029. Then he'll get a second trial. He'll not get a seat at the table, right, because the state will say, I don't want power in 29, I want in 27, and there are certain ISTS waivers also which are expiring in 2028. So this determines your attractiveness to the customers, right, in terms of the connectivity date, right. So, but if they get delayed in future, the states also don't get penalized because they are also part of the same sync-up formula where the ISTS waiver also... They are eligible for depending on the original date declared by a CTU. So that's a good regulatory setup where nobody is basically penalized for the delay on the behalf of CTU. Neither the states nor the developer, right, gets penalized because it is something beyond their control, right? So the only thing which a state needs to take care of when they are signing PPA, what is the declared date of that substitution, right? As long as that is 27. Get the same window of ISTS waiver, which is applicable during that particular year, even if the suspicion gets delayed to 28 and 29.

Okay. Okay. That's helpful. Thank you so much.

Ladies and gentlemen, that will be the last question for today. On behalf of ACME Solar Holdings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Thank you.