Power Grid Corporation of India Limited (POWERGRID) Q1 2027 Earnings Call Transcript

Ladies and Chairman, good day, and welcome to the Power Grid Corporation of India Q1FI27 Erlings Webinar Call, hosted by ICSI Securities Limited. 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. Please note, this conference call is being recorded. I now have the conference over to Mr. Mohit Kumar from ICC Securities Limited. Thank you. And over to you, sir.

Thanks, Ryan. Good morning. On behalf of ICICI Securities, I welcome you all to the Q1FY27 earnings webinar of Power Grid Corporation of India Limited. We will start with a detailed presentation, which will be followed by Q&A. I would like to thank the management for giving us the opportunity to host the webinar. Without much delay, now hand over the call to Mrs. Anjana Lutra, Company Secretary and Compliance Officer of PowerGate. Thank you and over to you, ma'am.

Thank you, Mohit. Good morning. I am pleased to welcome you all. I am pleased to welcome you all to webinar for investor and analyst organized by PowerGate Corporation of India Limited. Today, our Functional Directors and Senior Management team will discuss company business and share company's performance outlook based on Q1-FI 2627 financial results, recently announced on August 2026. Now, I would like to be privileged to introduce our Functional Directors, Sri Burra Vansi Rama Mohan, Chairman and Managing Director. He is also holding additional charge of Director projects. Dr. Yatendra Devedi, Director-Personal, who is also holding additional charge of Director Finance.

Good morning.

Dr. Naveen Srivastava, Director Operations. Good morning. We also have with us, Sri Venkata Subramaniam Galiuri, Key Financial Officer.

Namaste.

And other Senior Officials with us. Now I request Chairman and Managing Director for the presentation to the investors.

Good morning, all.

Thank you for joining this webinar on the earnings update of Power Grid Corporation of India Limited for the Q1, ending 30th June, 2026.

It has a standard disclaimer for the presentation, which has been on the screens.

The presentation offline will be in the manner like we start with the highlights and overview, execution and operations, competition, the order pipeline and the outlook of the sector, financial performance of the company, sustainability and acquisitions. As far as the highlights and overview, please be informed that the gross fixed assets stand about 3.25 lakh crore flaps. The transmission lines in terms of circuit kilometres are about 1,86,000 circuit kilometres. The transformation capacity is 6,34,516 MVA with about 291 substations within two classes. The system availability continues to be one of the highest in terms of 99.8%. The market position, the shareholding of government in India continues to about 51.34%. The market cap, 2.66 lakh crore, and the FII shareholding, DI shareholding at 24.33 and the 20.70 respectively. The credit profile continues to be one of the finest in terms of the domestic as well All these figures are as on 30th, June, 2020. The major elements which have been commissioned in the quarter of 527, about 1,635 circuit kilometres. And which is almost 35% of the last year's achievement. In the first quarter of 2021, we achieved almost 35% of what we achieved the last year. The transformation capacity stands about 10,500 MBA. The transmission lines, important transmission lines, which have been commissioned during this period are Karnamstri Maheshwaram, Dawsa Beaver in Rajasthan, a new Navasari in Kala, Kadapa in Anantapuram, again in Andhra Pradesh. The transformation capacity has been added in Bikaner 3 substitutions, KPS 3, Fatehgat 3, Padge, and the 400kb systems include Jabalpur, Satna, Anantapuram, and Fatehgat. Added to this, after June 26, the major systems which have been completed are Raichur Kapal in the state of Karnataka, Gadad Kapal, and that also is in the state of Karnataka, and Bikaner 2 and Bikaner 3 in the state of Rajasthan. These projects are by and large associated with the RE generation in the respective states. Substation and new substation and couple has also been completed. And on the capitalization front, the guidance standing at 30,000 crores. It is almost 3.13 times than what we have achieved in the last quarter. So as against 1683, we stand about 5,277 as far as capitalization. Availability and the tripping storyline continues to be one of the finest in the sector. Please inform that Power Grid, as far as you are aware of, Power Grid has this emergency restoration systems for towers, which grew very beneficial during emergency situations, and Power Grid has also been inching towards bringing in much similar systems on the substitution Thank you. Which you all are aware, the 220kb mobile GIS day was successfully indigenously developed in association with power grid. And now we have also got the 130kb mobile GIS day and 400kb GIS day is shortly in the end. So basically we are well armed with trying to deal with the urgent situations which ever are going to arise during the construction phase and the operation phase. PBCP Friends, there's competition we are talking about. The success until July 2026 in interstate as well as intrastate, six transmission projects that have been successfully in these projects over there, with a total gross annual tariff about 2,200 crore. The performance stands about 47% cumulative as well as the ISTS scores. And including both interstate and intrastate, total 19 projects were made during this period of which Power BI was successful in six projects. It also includes an intrastate project. And a new element added to the asset class in the country, and PowerGrid was the first in securing this project, that is the synchronous condenser, the first of its kind in the country itself. So PowerGrid's a 4A, I should say, into the new asset class. It's a 400 KV level system base that also associated with it. Two such synchronous condensers in Fataygarh, two. And this is expected to improve the system strength, that is the short circuit ratio, reactive power support during calls, increased grid inertia, and damping of the low frequency oscillations, which are the characteristic of the synchronous condenser. So all these benefits would be occurring once the systems are positioned, so as to bring better integration of the RE into the grid. The total outlook for the sector. In terms of 1.75 lakh crore, which are the works in hand for PowerGrid, which includes both CPC and Altium and others. The bidding pipeline is also very strong in terms of 1.19 lakh crore, and the long-term outlook is also very secure, about more than 15 lakh crore. Getting into the details of each of this, the 1.75 lakh crore, which work in hand, the TBCB amounts naturally having a line share about 1.46 lakh crore. RTM stands about 25,000 crore, and the other business, smart computing, data center, and BES, all of that include about 4,200 crore. Summing up to it, total works in hand about 1.75 lakh crore, of which 50,000 is a CW. Bidding pipeline underbidding 73,875 crore and which are floated to be floated about 45,000 crores and with the total projects which are to be underbidding in the pipeline about 1.1 lakh crore and the major projects which are there on the system are the Rajasthan-Badmar complex, HVDC. So, all these things put together about 1.1 lakh pro available in the market. The strategic drivers powering up the transmission system investment cycle, as you are aware, is the plans of the NEA and the Ministry of the National Emergency Plan, the anchor program of 900 plus gigawatts by 2035-36, 7.9 lakh co. And the hydropotential in the northeast portion of Brahmaputra basin was 6.4 lakh crore, and the data centers emerging to be one of the strongest intake for the transmission systems to evolve was 71 gigawatt. Added to that, the global one sun, one world, one grid. This also getting active traction in terms of the increasing challenges going to hormones. So the need for integration is much more visible now. So we expect that the neighboring countries get associated in strengthening the spirit beyond the borders. I have signed a loan agreement with JVIC. Salama Green is a loan agreement of Japanese yen $80 billion. We're riding on the subsidiary towards hedging, which the government of India has announced. And the robust collections continue to be there in the sector, with the building standing at about 10,963 crore, and the realization about 104 percent, let's say 11,404 crore. A comparison with the previous quarter and the current quarter visibly indicates that the number of receivable days comes down from 19.41 to about 12 days. On the consolidated front, which I will be focusing upon, the transmission charges, there's a 3% increase, standing from 10,620 to 10,905, and the total income from 11,444 to 11,697. The pad stands at about 3,598 compared to 3,631 in the previous quarter. I would like to state over here that the total increase in the transmission charges is about 790 crore going to the new assets which have been commissioned. We need to appreciate that we are under the regulatory tariff regime, which the measure of the assets continue to be there. So the regulatory characteristics or the trajectory, I should say, has a revenue reduction in terms of the depreciation in interest, which are but natural in the regulated regime, about 330 crore. And 230 crore is going to the interest because of the difference between the petitions filed and the orders issued by the regulator. So, this amounts to work 560 crore was the downside going to the regulatory nature of revenue. While the transmission charges continues to boost forward and move forward, the regulatory characteristic of the asset class which we have owned has an impact on the... Financial figures also reflect the similar kind of trend over here. The financial performance continues to be strong in terms of the gross fixed excess continued to move upwards from 2,92,000 crores to 3,25,000 crores. The capital work in progress from 41,000 to 50,000 crores. And the increase in debt, an obvious indication of the growth path of the company. The net worth improving from 96,482 to 1,4028 crores. And the ratios accordingly going to the increased network having an impact of earnings per share standing at 3.87 and book value per share about 111.85. Other key information, the income from previous periods, Q1 there was plus 8 and Q1 of 27 is minus 22. The interest in the differential tariff, which I was saying so, was from 257 stands at 22. Interest from subsidiaries continue to be up. And the incentive as a consolidated figure is also growing. The dividends from the JVs and subsidiaries is first owing to the status of high-long sale of Torrent, Sikkim Power, and Parvati Coal Dam. So the figures reflect the situation over there. And the CSR expenses continue to be steady. All the other ratios, including the equity in TBCV and equity in TBCV, both in operation and construction, continue to improve into the nature of projects. On the consultancy and telecom front, the Q1 of FI27 stands at $252 crore and $391 crore, respectively. And on the telecom front, the connectivity to Andaman and Nicobar has also been provided by PowerGrid's subsidiary, that is PowerTel. The first international long-distance communication established to Nepal, so adding up more business to the telecom division. A bulk order from NIC and NKAN project continue to move it forward. 100% backbone agreeability is the hallmark of the telecom systems. On the consultancy front, the domestic front, we have 16 orders, and on the international, 3 orders. And the country footprint is about 25 countries for the consultancy footprints. On the sustained commitment, please inform that the target set for 2025 has been already set, achieved in 2025, as far as the 50% electricity from RE, it's achieved, and the other targets, in terms of achieving zero waste to landfill, were the 90% achieved, and we are close to achieving that by 2030, which is the target it's set. Becoming the net water positive is also having increasing results with more than 50% achieved, and we should be able to achieve much ahead of the target. Becoming net zero, the target standing at 2047, 20% reduction already achieved, and we are inching forward to that date. On the accolades and the recognitions, we've seen from the paragraph that has been... Let's say, awarded going to be initiative under the CSR scheme, the Electrum Scholarship Scheme, which PowerGrid initiated, and PowerGrid has also been confirmed with the Mechanon Award, and also the PowerStell has been recognized by the Nixie for its Maximum Traffic User Award, and on the industry front, the Technology and Innovation Award, and FICCI and D&I Award.

Thank you. Thank you for the patience here.

Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please click on the Ask a Question tab. When the operator announces your name, please unmute your microphone, announce your company name, and proceed with your question. The first question is from the line of Prasada.

Please announce your company name and go ahead with your question. Rassad, please accept the prompt and proceed with your question.

Since there is no response, we'll move on to the next question, which is from the line of Apoorva Bahadur. Please announce your company name and go ahead with your question.

Hi, sir. I hope I'm audible. This is Apoorva from IIFL Capital. Thank you for the opportunity. Sir, you touched upon this on the drag, which is coming from decline in depreciation, normative depreciation, as well as some regulatory differences. Would it be helpful if you can quantify this drag in depreciation and its impact on revenue? How much would that be for this quarter?

Q1, depreciation in interest, which stands about 330 crore. And owing to the interest, because of the differential between our filing and also the CRC order date, that stands about 230 crores. It should be about 560 crores, the drag-on account of the regulatory characteristic.

Okay, okay, sir. And how do we see this, sir, going ahead, especially because I think depreciation probably will pick a little bit more pace. I recollect in the last cycle we added a lot of capacity around 20, 14, 15, 16 at that time, so that would be completing 12 years. How should we think about that, sir?

See, as you rightly said, what capitalization happened 12 years ago? That will definitely have an impact because that is a characteristic of the industry itself, the transmission industry under the regulatory regime. So this is the quantum of capitalization what has happened in the previous 12 years. It would have an impact, but then that is a part of the regulatory characteristics. So that should not be a cause of concern because that is the way how the revenues and the expenses are taken care of.

Sir, if I'm not wrong, this should have been profit neutral, right? Because there's a reduction in revenue and a reduction in the expense as well. Yet, I believe it had an impact on profitability. Could you help us sort of reconcile that? Because despite the 28,000 crore capitalization last year, profits have remained largely flat.

Yes. One is that certain components which otherwise were available in the previous quarters, some couldn't have been available. Like, for example, the interest owing to the differential between the CRC orders standing at 230 crore is no longer available now. And also, the write-back on account of a particular asset class which was there in the previous quarter is not available over here. So, this has an effect of bringing it down. Added to that, the depreciation, what is being accounted for, as well as the tariff which is there, there will be always a differential in that. Yes, that also is a marginal difference in depreciation and interest, because it will not match what is the notional, what has taken in the regulation.

Because of that, there is a marginal impact. Marginal. Marginal impact. But why not? The impact is because of the interest on the differential between provision and provision.

Major impact is basically interest on the differentiators between the CRC's orders and also the write-back on account of one of the projects. Last year, which has happened.

Understood, sir. Just one last question. If you can share of the 13,000 crore of equity which we have invested in the TBCB business so far for both operational and under construction projects, how much of that would have been funded by taking debt at the standalone or parent level? Or is it all of it is through equity instead of cash?

All of us have to be equity on. IR. IR. Okay. Okay. That's a strong internal revenue mechanism and it is capable enough to take care of the quantum of growth what we are foreseeing.

Sure, sir. Understood. Thanks a lot.

All the best. Thank you.

Thank you.

We take the next question from the line of Baranidhar. Please accept the prompt and announce your company name and go ahead with your question.

Am I audible?

Yes, please go ahead.

Great. Yeah, I'm Bharani from Aventus Park. My first question is on the 7.9 lakh crore of estimated cases by 2036 by the government in the transmission space to augment non-fossil fuel-based capacity additions in the country. So my question is, in how many years, in your opinion, you think that would be pitted out?

The 7.9 lakh crore.

Yeah, this one, I should say that is kind of a medium part. Immediately, it's standing as 1.19 lakh crore, and 7.9 lakh crore is to be immediately bit off. Based upon the traction what we are receiving, there is going to be continuous inflow of projects into the system. So, the 7.9 lakh crore will be spread across maybe another three years or so, because we need the systems by 35-36. The next three to four years, this will have to be spread across. So these systems will have to be available in 35, 36. So considering about two to three years of the construction period, so these projects should be visible, should be on bar in the next three to four years. But having said that, it will be by and by dependent upon the others also because transmission is an offshoot of generation. So the quantum of generation coming up, not only generation, understand, sure it could be the data centers, the green hydrogen. These are new set of requirements where it is going to push the transmission system. Not limited to merely a generator, it also has a new specific loads which are coming in terms of green hydrogen, data center, green ammonia, and you already see few of the projects already taking position in terms of the eastern and western parts of the country. So, this is going to give further boost, and it could be that much faster as well.

Understood. Related to the same thing, is inflation and other cost escalation built in this estimate by the government, or is there a scope for increase in this?

These are general estimates. Obviously, it would be difficult to factor in the quantum of escalations, what would be happening during this period of time. So, should there be a massive escalation, it obviously would get reflected in these costs.

So, there is a scope for increase in this number. Okay. And again, related to the same 7.9 lakh crore number, just to clarify, this will also include the cost of acquiring land, right? And if so, whether the new land rates, according to the new guidelines by Ministry of Power in the last one year, two years, is it being incorporated or do you think that will also, you know, result in some scope increase in the cost because it may not have been included?

That's quite an interesting question, I should say. You see, the guidelines which have been notified by the government of India regarding the land compensation in terms of the right-of-way challenges, what are witnessed in the transmission line, a few of the states, initially it was Delhi and Haryana who have adopted it. You see, recently, Gujarat also adopting it and other states following suit. So, obviously, this has not been factored while working upon the estimates. And it is presently not possible to actually even factor in the quantum, because that would be emerging only once the MRC rate has been finalized. So as we move forward, we get more clarity as to what extent of compensation could be included in these systems. It could be probably specific depending upon the location, high admin areas, high admin areas, And rural areas, that would have a different impact. As we move forward, we get more clarity on this. But these are the quantum of systems which will be coming up, keeping in view kind of the growth trajectory, achieving 900 gigawatt non-fossil capacity by 2536.

Understood. So, essentially, even the land competition which can be higher is not in this number. It can be higher. Okay. My final question is on basically the general execution delays that the transmission state is stating, including us. As it stands now, is there anything you would like to highlight on status of these reasons why delays are happening, meaning is there still delays due to equipment availability? What is your view on delays in acquiring land or labor shortage or this entire process of finding out the land rate based on new cycle rates or market rate to give compensation for right-of-way? So, we'll be happy. It'll be good to hear your news on the exhibition delays and the schedule.

Earlier, as you recall, the timeline taken for the transmission line was about 36 to 40 months. Subsequently, there was a lot of demand from the private parties that they would be implementing the systems in much higher title timelines, and it has gone to the extent of 18 months worth the timeline given to a 765 kV double circuit line. It's quite a challenging timeline. So, over a period of time, it has been now recognized and realized that these timelines are not practical in terms of implementing transmission systems. So, now, the Government of India has revisited these timelines and have adequately revisited these timelines and improved upon, which now stands about 26 to 30 months plus. So, this is going to make sure that whatever projects are there are having adequate timeline for them to implement. So, as far as the policy goes, yes, it has been recognized that transmission lines do take time in terms of implementing them. The second part of it is the land compensation. With the guidelines coming in and with the states taking over, a few of the states taking over, there will be some settling time for them to actually arrive at the mechanism for the MRC. There could be nuances in each of the states as to how they would be dealing with it. So as and when this particular issue is overcome, I'm sure it would be that much faster. Rather than me finding it difficult in building up transmission systems, if these guidelines are well accepted and it's translating into reality, with the compensation duly being paid to the landowner, I'm sure it would be bringing that ease in implementing of the transmission system. Having said that, the challenges of ROW is there, cannot be wished it or wished away, with more increased urbanization, increased other infrastructure coming into the picture. So we will have to coexist and build these systems to ensure adequate evacuation in the country.

Sure, that's the answer, except if you can highlight if there is any challenge due to equipment also. That will be my last question. Thank you. Equipment supply.

Equipment supply, with the high intensity growth in the sector, obviously, the existing capacities at times have a challenge in trying to provide these supplies. And looking into the power, power build has taken an initiative of trying to give much more visibility to the manufacturers in terms of procuring it in bulk rather than project-specific procurements. This has given the confidence to the OEMs. So they started establishing a good amount of capacities, which I'm sure is now reflecting in terms of better discovery of prices and also better timelines. And eventually, it is going to be doing good to the sector. So the stress on the equipment supplies, which was there sometime back, should not be asked much what it was before. So that is going to ease.

So, you are telling that the equipment supply challenge we had in high-capacity transcombers or TIA substations is significantly lesser now?

This will be? Yeah, it would not be as bad as what it was before, because the manufacturers are also now ready to take on the additional capacity requirements. So, there is ramping up capacity in the country as well. So, that is going to do a lot of good to the sector in terms of timely availability of the equipment.

And obviously, because government has recently allowed a few Chinese companies also to be able to bid, that will also probably ease the equipment supply product, right?

It should. It should. With more capacity, obviously, more players in the field will definitely ease the situation. Thank you so much, sir. I will join my conversation.

Thank you so much. Thank you so much.

Thank you. Participants, in the interest of time and fairness to others, we request you to restrict to two questions per participant. We take the next question from the line of Ketan Jen. Please accept the prompt, announce your company name, and go ahead with your question.

Hi, good morning, sir. My name is Ketan. I'm from Mendes Park. I just want to double-click on a follow-up question on the difference in tariff from CERC and our filing. What is the reason behind this? Is it that CERC has not approved some of our expenses?

No, I think I should put some parity over here. The trajectory of the tariff of the regulator Is that they recognize the tariff towards the cost of loan, that is the cost of debt, they recognize it as depreciation, and they unwind that particular cost in 12 years. That is the nature of the tariff or the regulator gives. After 12 years, the entire debt is supposed to be done away with, and then it's only the equity portion. So the characteristic of the tariff in itself will fall down after 12 years. Because the component towards the repayment of the loan is to be addressed within that time. So that is the way how the tariff has been governing. So that is one part, the trajectory of the tariff of the regulator. The second part of it is, as we file a petition for the tariff, and if there is a delay in the issuance of the order by the regulator, then during the intervening period, there is an interest which is accrued to the company, PowerGrid, SBI, MCLR+, and that these points is what we are entitled to receive during the period because the order has not come into position. All of that is also an additional revenue which comes into our credit. As and when the orders are issued by CRC, The order was significantly available for us in Q1 in the previous year, and as the year progressed, the order started being issued by the regulator, so that particular component was built. Presently, that component is not significant, so you find a variance between the Q1 of the previous year and Q1 of the current year, to the extent of 230 crores. This is the nature of the regulatory regime which we are bound with. There is no other concern in terms of regulator not allowing any tariff. Absolutely, there is no such issue. The time taken by the regulator, because he is also stressed with a good number of petitions, and he has a cycle to dispose them off. But during that period, he makes sure that the developer is not at loss, so there is a component of interest which is accrued to the developer. 30 crores was the quantum which was available to us in Q1 last year. As the year progressed, CRC started giving the orders because their cycle will have to come through. It's naturally not available now. We get the orders. The final orders are already on the board. Understood.

Thanks for an elaborate answer. So, if I understand, if I have to calculate the adjusted profit, I need to add 230 crores to the Q1 F27 profit, and also adjust the base for the writing back of any liability. What was that amount, sir?

Yes, writing. How much was that amount? 33 crores, which was available in the last quarter, is not available to you. There was one provision of writing of a particular company, KSK Mahanazi, KSK.

After the adjusted profit, I should reduce the base profit by 33 crores and increase the current profit by 230 crores. Yes. Yes, that's it. Those are my questions. Thank you.

Thank you.

We take the next question from the line of Atul Tiwari. Please accept the prompt, announce your company name, and go ahead with your question.

Yes, sir. This is Atul here from J.P. Morgan. So my question is again on equipment supply status, especially for some equipment like transformers. The industry has seen quite a bit of increase in price rise over the past few years because of a lot of ordering. But now, has the situation started to normalize and are the priorities stable and are they coming down?

Because we gather that a lot of capacity is being added by vendors, which you also alluded to.

And does it have a scope for reducing, at least to some extent, the cost of implementing the projects?

Nature or the logos with more players, more capacity in supplies, obviously it would have a reducing impact on both the price as well as the timelines, availability of the systems. But having said that, the raw material which is required for the transformers and all, that is the factor which will continue to impress upon the costing of these equipment over here. The combination of ingredient types and the combination and the raw material costs would happen. So, we see that the prices are quite stabilized over here, and in the days or the months to come, we should see much better progress as far as the price goes. And definitely, obviously, if the price is coming down, it will have a much better impact in terms of strengthening the revenues of power grid, in terms of the earnings of power grid.

And sir, what is the status of the award of Rajasthan Phase 4 Barmer Complex HVDC project? What are the timelines here?

The timelines have had these bids have been submitted. The initial offers have been submitted. They have been evaluated by the bid process coordinator. And the next steps as what the BPC will have to take will have to be announced. So the bids have been submitted. That's the status.

Is there a date for announcing out yet or the date is still not out?

The date is still not out. The date is known just before the date of ERA, one day before it's known. So, it is not known as well.

Okay. Thank you. Thanks.

Thank you.

Thank you, Thibariji. Thank you. We take the next question from the line of Janesh Karya. Please accept the prompt, announce your company name, and go ahead with your question.

Yeah, honey, am I audible? Thank you for the opportunity, sir. So you have mentioned a very strong pipeline going ahead from the Brahmaputra Basin requirement, data center, GH2 opportunity. Any thoughts on how can we see the HVDC pipeline for the next three to five years and any thoughts on whether we can have preponement of any of the CAPEX that we have mentioned beyond 35? Any thoughts on that? And that is the first question.

See, as you're aware, one of the projects of HVDC is already in the pipeline, and by 27, there's traction for another project to come into the pipeline out there. We look forward for that. And having said that, almost 21 HVDC projects are there, depending upon the evolution of the generation and the load centers, because we need both the points for us to identify the projects. So, the 900 gigawatt report of CA has about 14 HVDC projects, and the Brahmaputra basin has about 6 HVDC projects. And the international HVDC projects linking Sri Lanka and Anuman and Mahanar, they also have actively in their consideration. Depending upon the evolution of the technology, the ease and availability of these systems and the costing of the systems will have an impact in the planner deciding to go towards the HVDC. To tilt towards HVDC, we need to have the availability of them because they have a long gestation period, these HVDC projects, and also they have significant costs. So the planner will have to carefully examine the availability of these projects on their requisite timelines and accordingly plan these systems. So, there is good traction as far as the HUDC projects, which I'm looking for at the time.

Got it, sir. So, like you mentioned, cost overruns would be one of the factors that could determine the timing and quantum of SGDC projects. Any thoughts on how BESS as a system would play a role in the upcoming five years, given pricing side pressure from OEMs capacity coming in might go down, but commodity inflation for the OEMs raw material can still drive up the pricing. So, any thoughts on HVDC being complemented with VESS or getting converted through VSS to some other technology? Any thoughts on that front? And just to follow up on that, what kind of equipment would VED or any other transmission player would be procuring from Chinese OEMs who have received approvals from the government? So, yeah, those were the last two questions.

Yeah, multiple questions over here, I should say. The replacement of HVDC with the BESS, I don't think it will be exactly so in that manner. BESS has its own utility and HVDC comes with its own utility part. So these two components in the planner, planning part, will be taken by the planner and CA put together. They will be seeing, because it is not a static scenario. What we need to appreciate is that the power sector is not a static scenario, with more generation coming in different locations, more data centers, or more roads having in different positions. This is continuously dynamic in nature. So given the situation, given the costing of these systems, BERS, HVDC, and other alternative systems. including 1200 kV HVAC systems. All these things are actively considered before finalizing upon that particular component, which will have to be taken out, which is most suitable. It is also working upon this very clearly. Thank you.

It depends upon the traction, what is going on, what is going on, what is going on, what Thanks, and just if you could just follow up on the Chinese OEMs, the equipment that we plan to purchase, the kind of equipment we plan to purchase from the Chinese OEMs, who have received approvals.

As you are aware, with the recent notification, four of the companies within the country have been allowed by the Government of India. Having said that, power grid continues to be in adherence to the guidelines that are notified by the government of India from time to time, and to the extent whatever we have the options for procuring this equipment from the neighboring countries, power grid will be adhering to that.

Got it, sir. Thank you, thank you for patiently answering all my questions and all the best.

Thanks so much, Dinesh. Thank you. The next question comes from the line of Sumit Kishore. Please accept the prompt, announce your company name, and go ahead with your question.

Thanks for the opportunity.

My question is, the equity investment in operational TBCV projects has gone up from 4,671 crore last year to 9,965 crore. Could you give us a sense, given TBCV is the main driver of growth? I mean, what is the color that you can provide us on the consolidated performance of TBCV in terms of revenue, EBITDA, and FAT? And also give us a sense on what kind of return on the invested equity in operational TTCP projects that you have been able to secure.

The operational part, as we were saying, equity in TBCB operational has moved from 4,671 to 9,965. The mainstay, as what you're saying, the lion's share of the projects presently are under the TBCB regime, and there is competition in terms of securing the projects. Obviously, we need to tread a path of both growth and profitability, and Power Build is continuing to make sure that there is growth and profitability in its diverse, whatever we are doing. And then the returns are also, if that's a specific question, I should say, returns are also well calibrated to make sure that the investor is comfortable with those. Because it's not one single project which will be determining it. The multiple projects, each of the projects comes with its own niceties. And after execution, the quantum and the quantum of claims which are there, all of this put together will be giving the effective returns. And Power Grid is well safe and also making sure that all the returns are well within the interests of the shareholders.

One big question here is that because your business growth is largely driven by TPCB now. Could you make a separate disclosure in terms of what we consolidated? You know, contribution from TBCP projects is to the P&F. That is the main growth driver for the company. So what is the consolidated revenue, consolidated EBITDA, consolidated profit for TBCP? That will help us analyze the company better. There are periodical, you know, regulatory adjustments, which anyway are in a business where the case of growth has slowed down quite considerably. But we are not able to appreciate your results. Given the key underlying driver of growth, the transparency on the disclosures is not allowing us to evaluate how TBCD performance has been.

I do appreciate the concern. In fact, it is an equal concern from my side as well that you need to appreciate certain regulatory pulls or pushes actually impacts the power grid's financials. I think we will examine that, and with these kind of needs or such as the platforms which are there or maybe better disclosures, we will try to make sure that this is properly reaching out to the analysts and the investors alike so that they continue to appreciate and have confidence on the company as to how we are moving forward. We will examine that. Sir, as to the regulator, what we have to discuss, we are already disclosed, and wherein the net profit… We will examine that. We will examine that. We will do that. Thank you so much for that particular insight. We are also equally concerned that the true reflection of what we are performing should be there with the investor, so that he can analyse us that much better. As we have seen during this discussion, the primary concern was their inability to judge that there is a regulatory drag, which is but very natural, and nothing much… We have already accepted my previous statements.

Just one more question. Given the nature of capacity addition, it's more leaning towards solar. Thank you very much. Projects have not come up, and power grid transmission lines have got commissioned, and in those cases, are you facing any challenges in terms of, you know, both operationally and recovering your dues from customers?

Okay, I should say yes. To the extent of the transmission charges of power grid are not governed by the power flow.

Yeah.

So, it is not that only power flows, power grid starts getting. The first part is that the systems which are built under the regulatory tariff regime, that is the RTM mod, we need to go to the regulator and get the clearance for the... The revenue will also flow as when the regulators use the orders. So that revenue also will start accruing now. Thank you. So, these are the regulators. As and when the regulator starts hearing these petitions, now that revenue also will start accruing. And as far as PBCB goes, there is no such need to go to the regulator, and it is considered as deemed to go after a specified period. Not coming or being underutilized will not have an impact on the revenues of.

Thank you so much.

Thank you. We take the next question from the line of Satyadeep. Please accept the prompt. Announce your company name and go ahead with your question.

Hi, this is Satyadeep Jain from Ambit Capital. The first question on the – in the slide, you mentioned new awards which total 2,200 crore of annual revenues. Maybe can you share corresponding NCT CAPEX estimates for the new awards this year so far?

I think we can get that separately if you're looking into the NCT part. I can get you, but the intrastate, that wouldn't be available, the intrastate part of it. But the NCP is not definitely a guidance factor for us to get the tariff over there. We can definitely do share that. I can take the detail and somebody will reach out. But then that's something on this screen.

Okay, because in just time, the 2,200 crore annual revenue seems large, given typically, historically, revenue by gross block numbers. Just, I'll maybe take it offline on the NCT cost estimate. Also, the CRC... The notification back in March, it suggested that, which was also one of the things you noted on regulated ROE on transmission projects, or transmission on, sorry, BEST projects. BEST is also now part of transmission element. And so when do you realistically expect to get some best projects awarded to you on regulated return basis? Is there any visibility you have that you expect some sizable work enhancements from that?

Yes, with the regulator coming up forth, with that regulation, the amendment which you are stating. So, we have already had discussions with the concerned RPCs both at the northern region and the western region. And having their clearance, we moved forward and we submitted our petitions that are also filed before the regulator. So, because, see, we have to understand any new system which is coming, there will be a lot of challenges in trying to do it. There will be some settling time for this. The battery is not considered as transmission element as what you are saying. It is considered as that element who is doing it. The generator is doing it is considered as a generation element. What is a transmission? It is a transmission element. But this regulation has actually allowed a transmission company to get into the integrated storage business that is battery included. So PowerGrid has already taken initial actions and we have moved very fast in terms of about a couple of months. It has taken two to three months after the regulation where we could also reach out to the stakeholders in the RPCs and also then file the petition before the regulator. Having said that, we will have to await the regulator's position what we would like to look into it and the other stakeholders. Then it will mature. Once it is so, we will obviously come forward and let you know what is the state. But the present status is, we have already moved forward, we have done all the groundwork, all the homework is done, and we already filed the petitions. Okay. So, just a point. This is as per the procedure of the regulation itself. As per the regulation, we will have to move in this manner, so we have already done all of that.

Okay. So, just one quick question on the profitability for this quarter. So, I know previous participant also alluded, you mentioned there was interest accrued while you were waiting for tariff of about 200. Now that you have got the tariff. It seems like I'm not sure on a why-why basis that should impact your profitability comparison too much. But there is some forex impact also. Just wanted to see, are you able to pass that on? And is there a, because we're not able to see plant growth, does that otherwise mean that the TBCV projects you commission, which is also what the previous participant was asking, that in the first year, you don't have much part from the entire TBCV projects you commission in the last year. It's just trying to understand the profitability, bridge better, interest accrued, I know till the tariff is approved, but now tariff is approved, I don't know if that should have any impact on why by comparison.

The tariff continues to accrue the entire year after the CRC order comes over there. But until then, there is a revenue stream which comes owing to the interest because of the differential between the DOCO and the CRC. That is the reason there is an upside. Obviously, when we compare with that upside with any other figure, there will be a difference. That is what is visible to the extent of about 230 crores. And the capitalization which has occurred, the transmission charges. Could have gone up to 788 crores, as far as the earnings go on the top line, should have gone by 788 crores going to the transmission lines which have been commissioned. And correspondingly, the PACs would have been about 247 crores, so that should have moved up. But for the regulatory drag, which is an inherent and a natural way how the regulators assets all these years, which is mine, that is visible here, which is actually bringing it down to the numbers what you've seen. Otherwise, the transmission lines have increased by 188 crores over here in this quarter.

So, you're saying 247 crore additional part from all the TVCB projects commissioned in the last one year, is that what you're saying?

I'm not committed to TVCB. It's a combination of both TVCB and the trajectory of the RTM projects put together, with the land share being that of the TVCB, yes.

Okay, so, and the FX losses that you had in the regulatory account, what is, are you able to pass that on? Is that also a one-off or there was no? Thank you.

Thank you.

We take the next question from the line of Dhruv. Please accept the prompt, announce your company name, and go ahead with your question.

Hi, sir. Thank you so much, Dhruv from HDFEMF. Sir, first question, we have started well with 5,000 crore capitalizations in one queue. Is this scope for a meaningful upside to the 30,000 crore capitalization guidance for the year?

Yes.

At some degree, if you can.

We are, the transmission systems are not coming, unlike other businesses which have a cycle of every quarter or every year, the transmission systems do have a cycle based upon the timeline given for implementation over there, taking into account the ROW challenges. I was glad to inform, as I was stating in my initial statements also, the quantum of capitalization which has happened in the Q1 stands about 5,277 crores. And we are also looking for a good number of projects, that is the copper, gadgets, and the Birir Maheshwarams. These projects also will be on bar, apart from other projects which are implementing them. So as we move forward, the projects come on to capitalization, and I'm sure that this number will be that much more steady and improved.

So the second thing is, I was trying to do a console minus standalone, trying to imply the TPCB numbers largely. And if I look at the gross block increase, difference between console and standalone, the gross block increase in a YY basis is about 67%. So 1Q this year, 1Q last year. But the increase in depreciation, the same differential increase in depreciation is only 27%. I'm just trying to understand why this gap. Is this because most of the incremental TBCB projects are coming on under lease accounting method and hence there is no depreciation associated with that? And if that's the case, does it change the way, you know, PAC gets reported for TBCB, I mean, reported PAC for TBCB moves under the lease accounting method versus your typical, your normalized accounting method?

Yes, we are now going to the new method, right? Lease method only we are following here. Wherein the depreciation will not come, it will be taken as amortization of the lease. So that is the reason why comparing the depreciation component in TBCB will not be commensurate with what is the capitalization. Because capitalization, out of capitalization, lease receivables are also there, which are in both mode. So further, the depreciation component will not be there because that is prepared as lease.

So, does it in any sense have an implication how typically we think of PAD for a TBCP project versus how it moves in a lease accounting method in the first three, four years?

No, even if it's this accounting method, the PAD will not have any impact on the difference between either I go through the PPA method or through the lease. Got it.

Sure. And so last question is, yeah, this regulatory adjustments that you mentioned about, which is happening in the standalone, the reduction of depreciation resulting in the reduction of revenue. We understand this has no, you know, this is a regulatory process. But probably just to give a better understanding, if this is having any implication of PACT on the PACT number, if you can probably help us, you know, understand what is the nominal or normative loan that you have on your regulatory accounts, Versus what is the actual loan, which is sitting in the standalone assets on the operating transmission assets. Because if there is any meaningful gap, that would probably indicate that there will be some drag because of this regulatory adjustment. And if there is no gap, then probably the market understands that there is no implication of this. Basically, the difference between the normative debt and the actual debt on the operating regulated assets.

I will check this back and get back to you. Should that be fine?

Yes, sure, sir. Great.

Thank you so much, sir, and all the best. Thank you. I mean, difference would be there, but I'll let you know.

Thank you.

We take the next question from the line of Mohit Pandey. Please accept the prompt, announce your company name, and go ahead with your question.

Yeah, good afternoon, sir. Sir, my question is on grid strengthening projects. So, I understand there will be incremental projects for strengthening the existing grid as renewables penetration. So, increases, for example, for adding energy. So, in cases where we already have, we are the owners of the assets, will those strengthening projects come to us on regulated mode or will they typically be?

All projects which have to come are obviously in the pipeline only, whether it is a regular grid strengthening scheme or a generation associated scheme, all of them are in one particular bracket. And as far as the existing systems, substations, what we have, should there be any extensions which will have to be done there, this is taken care by the NCT. They look forward to the best way of implementing it, and at times it is given to the regulated entity who is already there, or the entity who is already owning that asset class over there. So he is given the opportunity to undertake this under the RGM. And sometimes we see that it is also given under the bidding rule. It is a combination of both these things. There is no specific mantra rule as to how it happens. We have seen both these things happen. There is no specific way.

Understood, sir. Sir, and on the One Nation, One Sun, One World, One Grid, when do we realistically see projects or any sense on that? Oh, yeah.

Obviously, we need to, as we have evolved from a state to a region and region to a country, so the more we are integrated, the better we are in terms of utilizing the resources that much more effectively. So going beyond a country, it does have an additional component to tide over. We need to bridge that gap with the diplomatic relations with that country. If that is done, this would be one of the finest ways in terms of integrating, because the telecom network has already been integrated, as you see, the entire world is now under one internet. So, eventually, as we move forward, this should be the answer, so that the ups and downs which are there in a typical sector are well taken care of, and it should move forward, this particular concept of one sun, one world, and one grid. One nation, one grid, one frequency power grid has already achieved that particular objective, and this would be the next extension what we need to reach out. So, the moment one or two countries we are able to integrate, which other countries are doing elsewhere in the world, so we are going to switch this particular network across the world. It would be in the interest of the human, mankind, I should say, if we are hitting those.

Okay, sir. Thank you so much, and wish you all the best.

Thank you so much, man.

Thank you. Ladies and gentlemen, with that, we conclude the question and answer session. I now have the conference over to Mr. Mohit Kumar from ICSA Securities Limited for closing comments.

Thanks, the management, for the detailed presentation. We would like to thank the management team for giving us an opportunity to host the call. Sir, would you like to make any closing remarks?

Yes, yes. Thank you so much, Mohit, you and your team for this particular webinar being connected so smoothly. And importantly, thanks to all the participants, including the investors and analysts, who continue to propose confidence and power grid. And the Q1 results, obviously, they do have these kinds of queries which are there. We are glad to actually unveil the challenges as far as the regulatory regime looks in terms of the drag, what has happened over the regulatory regime. I'm sure that these clarifications would put them in a better perspective in trying to understand what our risk growth trajectory is. And thank you once again for your time and continued support. We look forward to gain your confidence.

On behalf of ICC Securities Limited and Power Grid Corporation of India, that concludes this conference. Thank you for joining us, and you may now disconnect.