Acme Solar Holdings Limited (ACMESOLAR) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Ackman Solar Holding Ltd. Q1 NFI 27 on a conference call hosted by MAFG in time. As a reminder, all participant line 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Nikunjee. Thank you and over to you, Nikunjee.

Thank you, Dhanesh. Hello, everyone. Welcome to P1 F527, earnings fiscal of Actomy Solar Holdings Limited. From the management, we have with us Mr. Mahudmarupate, Chairman and Managing Director, Mr. Nikhil Nyingata, CEO, Mr. Arun Chopra, CFO, and Mr. Rit Parma, Director and Head of Corporate Community. Now, I would like to hand over the call to the management for their opinion. Thank you, and over to you, sir.

Thanks, Nikunj. Good afternoon, everyone, and thank you for joining us today. I am Ankit Verma, Director of Corporate Finance, and it is my pleasure to present the highlights of our performance for the first quarter of FI2L. Before we get started, I would like to thank all our shareholders for their continued trust and support. We are also pleased to have successfully completed our QIP, which reflects the confidence investors have in our long-term vision. This would give us the flexibility to pre-cone our CAPEX for our under-construction projects and deliver better return economics. Let me now begin with our financial performance. This quarter marks another milestone for the company as we deliver the highest ever revenue and EBITDA in our history. Total revenue for the quarter stood at INR 954 crore, which is up 63% year-on-year, while EBITDA increased 66% to INR 831 crore. This strong performance was driven by higher CUF, revenue contribution from our best operations, and renewable capacity additions. Our total EBITDA margin was around 87%. Looking at the businesses separately, our renewable energy portfolio delivered an EBITDA margin of around 88-89%, while the best business recorded a margin of approximately 82%. The difference is primarily because the cost of power per case for charging the battery is accounted for within the operating expenses. Therefore, the blended margin should be viewed in that context. Profit after tax stood at INR 235 crore. It is of 80% on a wire-wise basis, translating into a pad margin of around 25%. Our asset base expanded significantly to around 25,000 crores following the commissioning of new assets and batteries. We incurred capital expenditure of around 3,000 crores, and for the full year, we upgraded our graphics to approximately 15,000 to 20,000 crores for this year. Moving to our battery energy storage system updates. In line with our strategy of early deployment, we commissioned approximately 2.3 GWh during the quarter till day, taking our cumulative commission best capacity to approximately 3.62 GWh. With this, we now account for around 40% share of India's cumulative commission best capacity till day, one of the highest in the country. Our best operations made an meaningful financial contribution this quarter as follows. Out of the total revenue of INR 954.00 in this quarter, INR 226.00 came from best from power sales, comprising approximately 85% revenue from short-term We have demonstrated large-scale FBRE operations through battery operations in a bigger and more demanding way by charging and discharging the batteries in a 15-minute slot interval. You have secured contracts in the quarter, locking in more than 1,400 crore of revenue for partial FY27 BESS commission capacity. Coming to our BESS updates, I will repeat again. BESS operations made a meaningful financial contribution this quarter. Out of the total revenue of INR 954 crore in this quarter, INR 226 crore came from BESS power sales, comprising approximately 85% revenue from short-term contracts, We have demonstrated large-scale FDRE through battery operation in a bigger and demanding way by charging and discharging the batteries in a 15-minute slot interval with 1,400 crore capacity. Also, we will keep on participating and tie up more such contracts for full best capacity in 47. Operational performance for also the plant availability for batteries is more than 99%. Other business updates, 600 MW of FDRE in hybrid PTAs with SECI, 3880 MW, out of total under construction capacity of 5080 MW. These PTAs are yet to be signed, are progressing well, fully now stands at 8070 MW, 20 GWh of battery storage. We also achieved the highest capacity utilization factor in the company's history at 30.9% compared with 28.5% in the corresponding quarter last year. Power generation increased by 23% year-on-year to 20-20 million units. In the quarter, we secured financing of approximately 6,000 crores for our 700 MW of under-construction FDI projects that has now been tied up for nearly 85% of our PPS and portfolio. Before I move to sector updates, let me briefly address the recent incident at our ACME Suryodhya rest facility. I communicated earlier, certain media reports incorrectly suggested that the fire originated within the battery system. I read that the detailed technical route for the analysis has now been completed, and the investigation confirmed that the incident was caused by an electrical short circuit in the AC cabling between the transformer and power conversion system, which resulted in a localized fire and equipment shutdown. Importantly, there was no damage to any battery systems or any other equipment at the site. We have already deployed safety measures across detection, suppression, and containment, video analytics for early fire detection, EPS panels, additional aerosol-based fire suppression systems inside PCS enclosures between electrical and improved cable protection. Also, we have long-term warranty for best and other equipment from the suppliers. We have also built a best-in-class in-house 50 members EPS best team, which is responsible for overall integration, including installation, commissioning, and operation of best. Now, turning to key sector and regulatory updates, India's power sector witnessed a strong start to FY27, supported by expanding economic activity, delayed monsoons, electricity demand during Thank you. Fossil fuel sources now accounting for approximately 54% of the total installed capacity. During the quarter alone, the country added nearly 13.9 gigawatt of renewable capacity, taking cumulative renewable capacity to 289 gigawatt. On the policy front, several developments are increasing for the sector. MNRE extended the commissioning deadline for open access and net metering renewable projects to 31 December 2026, ensuring a smoother transition to cell level leads to compliance. This also provides us greater flexibility to evaluate and commission merchant-based projects, co-located with solar generation. The Ministry of Power extended the graded ISCS waiver benefits for projects delayed due to transmission readiness for PPA signed up to 30 June 2016. This reduces financial risk for developers and provides greater clarity for DISCOMs while also benefiting our opticos where GNA availability is delayed. CTO has begun granting best connectivity and best deployment while strengthening the grid reliability and enabling better participation during evening peak power demand. Looking ahead, our priorities remain centered on discipline execution while continuing to build a healthy project pipeline. 10 GWh, bringing forward this milestone by nearly 3.4. We also expect to operate, we also expect to commission 1.5 gigawatt of contracted renewable energy generation capacity, subject to timely availability of substation and transmission lines. We have already ordered more than 15 gigawatt hour of battery from leading global suppliers including CATL and heatium, well within our budgeted cost. From the industry growth perspective, we expect to see large bids going forward, especially across the following categories. Mid-term contracts, long-term peak power, RTC-FDRE, CFD related to peak power, and state rates. We will continue to actively pursue all such opportunities to capitalize on evolving market demand and machine market dynamics. By 2030, we contemplate to increase our target beyond 10GW as guided earlier, which is the new growth opportunities that we are seeing in the market, and we will keep you updated on the same in coming quarters. With that, I conclude my remarks. Thank you for your continued support. We will now be happy to take your questions.

Thank you, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone 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 question queue assembles. Our first question comes from the line of Subhadeep Mitra with Noama Wealth Management. Please go ahead.

Grafman, thank you for the opportunity. Firstly, congratulations for a great set of numbers, and clearly your strategy of early best commissioning with the short-term sales for peak power is working and reflecting in numbers, so congratulations on that. My questions are largely around the BESS piece because clearly that's adding a lot of traction to the numbers. So in your estimate, what quantum of, let's say, open market or early commissioning of BESS is what you're estimating, let's say, in the current fiscal in FI27 and for the next couple of years? And the second question is, in the current short-term contract of the 1,400 crore locked-in revenue that you've talked about, what would be the ballpark range of realizations that you're looking for for the best short-term contracts?

Thanks for the query. So, in terms of this by end of this March is what we will have on a daily basis in terms of the capacity being sold. Of course, as we scale up from 3.6 to 10, this will be a number which will keep on adding every month, and that is how we are contracting, planning for the capacity additions. And there is an upward bias to this number because the contracted we have done is much higher than 10 gigawatt hour. So as and when the deliveries are made, there could be an upward revision to this number. In terms of the realizations from the contracted capacity, they range from, you can say, between 8 to 10 in terms of the realizations, depending on the month and depending on the volume of the contract. These are all bids conducted on the deep portal and the HVTAM markets. So, those are the ranges which are publicly available.

Understood. And as a follow-up, the 10 gigawatt hour by March 27 will naturally move upwards, I guess, over the next couple of years. Any ballpark range? Because I believe the overall number will be 20 gigawatt hour. So how much of that would be, let's say, open capacity for the next couple of years that we can look at?

We have only, right now, 600 megawatt hour which is open, which also is planned to go into a PPA. So we aim to have zero open capacity by end of this year. We don't want to operate any merchant outside of PPA. So the target is to have zero outside PPA. This is all inside PPA. All the capacity we are operating. Only a 300 megawatt plant, which is 300 into 2 right now, which we are scaling up to 300 into 4. That is something which we are yet to contract. Rest of all, there is nothing open.

So, I would like to add here that, my name is Manoj, so I would like to add here, every year at least 10 gigawatt hour of battery will remain expense market, PPA. So, to answer your question from two-way one, we don't expose ourselves for a merchant market for the battery for next 25 years. But our plan for next five years is at least 10 to 12 gigawatt hour of battery remains available for the short-term power market.

So, yeah, it's an important distinction which I forgot to make. So, the thing is, we are doing early CAPEX, as you rightly noted, right, in terms of the best installations. So, first year, you can say it will be a merchant and let's say around, so one year of merchant operations. But the CAPEX is all allocated towards PPA in terms of the final destination. So that's how it is working. There is no open, from a long-term perspective, the bus is not open other than the 300-megawatt plant, which is currently open. But we are aiming to put it in the next bid, Vishal.

Perfect, perfect. That amplifies. Thank you so much, and congrats once again.

Thank you. Our next question comes from the line of Aniket from SBI Mitchell Fund. Please go ahead.

When I look at the presentation, the GNA timeline for the STV FBRE is about June 27th. I just want to understand how do we look at the commissioning for that? Would you want to upfront the battery and wait for the Sura commissioning to be pushed out of FY27? What's your views on that?

Yes, please. So, Aniket, you are very right. We have already commissioned the battery for these two plants. If you look at Higer and one more substation, Bikaner 2, those two are already commissioned best for the SDVN plant. So, that is already commissioned, accurately noted. But the DNA connectivity is scheduled for the month, which you again noted in next year. So that's the only time we can commission the solar. So that's how it will work.

And the KPEX for that then will also get pushed out? Like the modules and all, you've not placed the orders for it?

Yeah, the KPEX is by and large done for the non-module part. We are done with, let's say, 80% of the transmission line and rest of the substations and the plant infrastructure. So, the modules we are looking at opportunistically, let's say right now the module prices are sub-12 rupees, right? They are in the range of 1160 because of the changes in China regulation. Till from now till December is a good time to buy modules where you are buying Chinese sales. So, we will be very opportunistic about the module and the other purchase, but we will want to minimize the interest during construction. So, we'll balance these two objectives and bi-modules, right? And we are also requesting that if there is any preponement on the GSS side that we are also working with. But we are doing like that. In terms of the Patega 2 independently, which is not relevant to the PPA question you asked, but separately this Patega 2 is the base charge. So, if we want to give the nighttime power, which we don't want to for this particular PPA, but for future PPAs or other PPAs we are doing there, the bay will be charged, the bay is currently charged, so it is capable of evacuating nighttime power, which is not relevant to the question you asked.

I know about that, because I know I understood. In, there's only, you know, 1,400 crore of contracts that have been logged in. Typically, what's the, you know, payroll for this, and what are the aggregate units that we need to supply under this?

Ankit, we mentioned, is around 8 to 10 rupees, and in some cases higher also. So that's the, you can calculate the amount of units, because as the capacity is currently 3.6, it is going to 10. So the capacity will keep on adding up, and that's how the volume-weighted megawatt hour will be arrived. So, in terms of the contract nature, they range from until March. We had a couple of bids where we participated where the states are buying power for March today. Because of the al-Nino effect, there is a lot of planning which states are doing in terms of the shortage they are perceiving across the monsoon months, we are also seeing a strong demand. So, typically, they are less than a year. All these are less than a year because that's where the short-term market is in terms of the contracts. But we are also seeing the mid-term bids coming up from various states where they are looking at five-year contracts. But that five-year contract, we only have one project which we can offer from, like we mentioned, which is currently non-tied up. So, we are only looking for bids under one year because keeping in mind our commitments and other things. So, they are typically, you can say, maximum one year, but typical range is around six to nine months ahead.

That's it. I think, within this quarter, the battery that we have, how many cycles are we running in a day on an average? The 20 years out of battery, how much have we already contracted?

You can say around 90% of it. So, already contracted. And in terms of the timing of battery procurement, that's an important point that we foresee that this year is a good time to purchase because there is a 6% export tax being imposed in China from January. So that's another thing. And of course, the merchant market-wise also earlier the better. So even that we've contracted by and large all of it in terms of the contract. Wherever the PPA is not signed, that is, we don't count it as something we need to order. So that is what is left. But wherever PPA is signed, there we have ordered the battery.

I will join back in the queue for further questions.

Thank you. Our next question comes from the line of Mohit Kumar from ICSA Securities. Please go ahead.

Thanks for the opportunity. And congratulations on a very good quarter. My first question is, can you help us with depreciation and increase in the quarter, especially for the batteries, which were counted in the P&L?

In terms of policy, it's a 20-year depreciation for the batteries. So, in terms of number, I'll just give you the numbers.

Arun, can you spell out the numbers? Arun, you can spell out the numbers. The portion in the battery part is around 32 crores, and the depreciation part is around 47 crores.

My second question is on the, of course, the CRCA introduced a free exit option, a merchant route conversion from point is lacking a signed PPA. I think I mentioned in the PPD that this is advantageous to us. Can you just help us, you know, how does it impact us in slightly more granular details?

Sure, sure. So, as you would have noted that, Mohit, that bulk of our PPAs are signed, and the rest of the LOAs which are still left are also on a good track to be signed. So, we gain from this freed-up connectivity where the PPAs are not signed and where the people don't want to do, let's say, the alternatives which CIC is suggesting, let's say, putting up a merchant plant or putting up a CNI if their PPAs are not signed. So, we are expecting that quite a large number of connectivity may be freed up by this initiative, which is a good initiative by CRC. So, that's how we are positive in terms of the future growth, that we were seeking, you know, higher GHI connectivity always. So, this will enable us to try and let's say there are options for this connectivity, which is freed up. It will help us get that, which we could not have got if this initiative would not have taken place. And secondly, it will also help the CTU plan the future connectivity better, which is good for the grid in terms of the overall country, that the connectivity is appropriately utilized and not stranded. And also good for batteries, because the nighttime also will come around those, because there is a right of first refuser attached to some of these connectivities, which will be freed up. So that will also free up a lot of non-rofer connectivity or a rofer connectivity, which is all linked to the solar connectivity. So very good development for us, and the industry.

What is the expectation on bidding activity for the next nine months in the fiscal parades? We have seen that there will slow down in general in bidding, especially in the last quarter and FY26.

Right. So, in terms of the bidding, as you know, that we only have one RIA, which is now six months since that initiative. So SECI is consolidating all the bids, and now they are putting a rule that they will not come up with a bid until they have a prior, more or less firm commitment on the requirement of power. So what we are seeing is the cycle time from bid to PPA will reduce because of that. So the quantum of bids, of course, have reduced from SECI because of that, because they are realigning their whole sales and procurement system basis guideline from the ministry. So, what we have seen from them is a good amount of PSP, good amount of wind, good amount of 4R peak, peak power bids, the full round-the-clock FDRE bid. So, very large bids are expected and CFD is another contract for difference. So, these are all which are very solid bids It's backed by demand from the counterparties. You know Bengal is coming up with a good amount of requirement post-elections. Then there are a lot of other states which are coming up and let's say for the round-the-clock FDRE, there is a good demand. And these are all high crore per megawatt KPEX bids. So in terms of the KPEX and ROC, these are very significant And it is good for serious players because it needs connectivity in multiple places. It needs integration of various sources. So that is there. Then other than SECI, there are a lot of medium-term bids which are coming up from the states, like we said, like a five-year big power procurement, even Gujarat, and a lot of other states are coming up with their own FTI in terms of the high-credit-worthy states. So that's, again, a good opportunity. And with ISTS, we were going, there is, again, move towards best tenders and, again, move towards putting up projects in high-resource states. Some states are going for that, like Maharashtra is also coming up with those kind of bits. So, the format of the bits has changed. There is no solar bit which will come, right? There is no, of course, pure wind bits will continue coming, but the battery-related bits will be the focus. There is no bit in renewable which will come other than KSP which will not have battery. So, you will see that the focus will be, and also there is a right sizing of battery bits which will happen because of delay in the VGF-based projects which was done by various states. So, states will also size up how they realign post-grad bits in terms of the actual execution of those bits. So, you will see that realignment currently going on because they were hoping for that execution, but that execution is not happening because the competitive nature of those bits. So, some realignment because of which the volume is currently low, but the structure being put in place and the demand drivers are very strong.

The megawatt-wise, I think I would like to also add, the megawatt-wise, there may be lesser megawatt, but each megawatt will be equivalent to 4 megawatt of solar because they are around the clock type of power, which we expect more and more to come in.

It's very clear, sir. Thank you. I'm one of the best, sir.

Thank you. Our next question comes from the line of Sambhu Kaila with HSBC Bank, please go ahead.

Yeah, thanks for the opportunity. My first question is on the PPAs that you have signed this quarter. So, on the two projects, are there any change in terms that have allowed you or enabled you to sign these PPAs, especially for the hybrid project? And also, if you could elaborate on the configuration of these two projects.

What we have done is we have offered one hour of battery, right, that is a change to the standard configuration, right, and the second project which we assigned is, which one? 6.3.3. Yeah, this is no change, there is no change in that project configuration.

Okay, got it. And secondly, if I look at your last quarter's PPT, there is one Acne Marigold LOA-awarded project where you had mentioned that you have been invited to sign a PPSO. Any progress there? What's the update?

Yes, yes, yes. Yes, so in the Northeast, so they were taking time to, because you know The railway's status is currently, as an open access party, is being revised by the Supreme Court, you must have gone through that proceeding. So, because of which it took time, we are still very advanced stage and we have given the bank guarantee for signing PPA. So, it is expected to be signed very, very shortly. It took some time at their end, at the state end. The REMCL is very proactive on this, but the railway unit in the northeast took some time. So, this is still, it's 100% going to be signed very soon.

Got it, got it. And just lastly, if I, just a clarification, on the projects that are, that were targeted to be commissioned this year and where the GNA timeline is well into FY28, what you're saying is that you will perhaps operate best on those projects, but you won't commission them early and operate them on eGNA, right? Is that understanding, correct?

So, see, the ministry is also requesting everybody, given the curtailment in Rajasthan and others, so every ministry also doesn't want people to commission because there was a representation by the industry that there is a lot of curtailment happening in the whole state. So, nobody in the industry would like to commission on TGNM because the amount of curtailment which you get is not good for your shareholders or anybody, right? Even the lenders would not like it. So it is prudent to plan such that you only supply where your lines are complete, all the elements of the line are ready, right? You right size your plant. So we will, wherever the solar GNA is available, right, we will try and prepone the plant as much as possible because it is always beneficial for us to early commission the whole plant, which we will continue to do. But wherever the solar DNA is not available, it does not make sense to buy modules and keep them stranded or not generate the whole PPA power because that is IRR's decretive.

So we will never do that. So, to clarify, I think your question also, everyone knows this one. We will make the plant ready in terms of transmission line, service station, and even the entire balance of the plant. What we will do is we will operate the battery there at the plant, and whenever the daytime G&A gets operational, then we will start feeding solar.

Got it. Got it. Thanks, Mr. Salman, so much.

Thank you. Our next question comes from the line of Apooriva Bahadur with IFL Capital. Please go ahead.

Hi, sir. Thank you for the opportunity. You mentioned in your presentation and in the commentary as well that you have signed a locked best capacity, which will earn about 1,400 crores of revenue in this year. Can you share how much of the best capacity has been locked in and how much of the storage inventory is available for further monetization?

So, Apoorva, you can, we have mentioned 1,400 crores, so you can say that is around 80, 70 to 80 percent of our capacity which is locked in, and 20 percent is still left. And this is assuming a 10 gigawatt hour kind of a number by March. If we go above, then we will need to contract that, but we are slightly, we want to basically factor in any supply chain or such kind of issues, that's why we are guiding for Trinity.

Okay, and the EBITDA margins would be similar as 1Q, 82%, or do you expect a change of error as well?

Yeah, the Q1 is a slightly better quarter, but since the commissioning happened in a staggered manner, right, so the interest and depreciation, so we will have to see. I'll have to come back to you on this one, but by and large, not very different from this, right, so the cost of power was also similar. So, it should be similar. I think it would not be very different. Maybe 2% to 5% here and there, but not very different.

I know. So, that's quite helpful. Also, in your presentation, I think you shared the capital cost for bets, which has been capitalized, around 93 lakhs per megawatt, if I'm not wrong. So, that comes to around $100 per kilowatt hour. How are you seeing this? I think initially, the first few batches which we ordered were at a slightly lower rate. And now, what is the current price of delivered bets into India?

Right, right, right, right. You are very right, Kapurva. So, the initial bets we ordered were at a lower price. And then, of course, the lithium carbonate is a very volatile commodity. And, of course, China has some, again, a supply-demand economics through which things play out. So, this 93 lakh could go up, right, could go up for the future best, but not, again, by a very high percentage, not more than maybe 5 to 10 percent. So, that's another budgeted cost. So, because, you know, rest of the components we are saving, we are saving, like the PCS is coming lower than the budget cost, and rest of the components are also coming in. And mind you, we are building at the substations where the line is already there, right? Line and substation is already there. So, that also helps us save costs. The other thing is we are not factoring in the hedging gains we will have in this cost because we have already hedged more than $300 million of dollars from which we have a lot of hedging. So, we are telling you the cost as we are spending it, and there will be, so in terms of the, because we have locked in a rate of around 89, 90, in some cases, 92, 93 also, depending on where the dollar was at that. But we keep on hedging as and when the opportunity comes, because, you know, it's a very volatile world. So, we keep looking for opportunities to hedge. So, that, there is a, you can say, positive bias in terms of reducing cost on the, because of the dollar movement. And this 93 lakhs, which you mentioned, comprises, given that it's the

capitalized cost, including the stage of transformer, everything.

Okay, okay, sure. Also, I want to know your thoughts on the depth of the merchant market, which can support, how much of best capacity can it support, right, because the arbitrage is so good, and I think a lot of players are jumping in with both fields. A lot of best capacity has been awarded, and I think now the entire industry is trying to replicate our strategy. So how do you see this? I mean, for how long will these threats sort of hold where they are, or do you see a compression, and by when?

So see, you know, Apurva, it's a very important question which we keep on debating. So the key thing here is that this is a very nascent market in terms of the availability of best, right? The peak power demand was always there. But people were making it through alternative methods. Let's say we go to states for selling this power. So what they say is that we are buying around the clock power. They are buying thermals, right? They are buying thermals because there is no gas this year. So people are buying thermals. So when they look at the maths of buying a thermal for meeting their peak requirement, they have to buy it for more number of hours than they actually need to for this. When they look at the actual problem they have, that is in the four hours or six hours, mostly in the night, right, where this product is actually was not there till last year. So, this is an unmet need which was there last year, but there was no supply of that product, right. So, if you look at the 4.5%, let's say 40%, we and Adani are doing it, very large, very small supply, if you look at it from the best side. And nobody is actually doing merchant. People like us, I'm sure Adani would also plan to put it in long-term contracts. So, people are not putting up specific merchant plants, which are online for 25 years. Everybody will, like we have a consistent pipeline which will keep on coming for every year. So, first of all, I wanted to clarify that the supply for pure merchants will not be very high, right, because some of our plants will go into PPA, then we will again get into new projects execution. So, like Manojee guided that 10 gigawatt hour we will have on a, let's say, merchant basis every year because we are executing projects, right, which have PPA. So, the supply side, I'm not very bullish on the huge supply into the best on an open basis, right? So, there will be very opportunistic supplies coming in into the best from the supply side first, right? In terms of the demand, so this has opened a very new, let's say, each state is now evaluating it very seriously because they were not aware of this availability, right? And they were not aware of the ability to supply, right? Here we are supplying 15-minute power on demand every day, right? They were not aware that this kind of very high supply can be done by battery because there is a low trust on battery, right? It is new for everybody, right? Including suppliers, including takers. So, that trust is growing by state and state. So, let's say we will be supplying to more or less seven, six, seven states right now, right? So, they have Panjoon power from us, Adani, various other players also. Everybody is doing it. So, there is a growing trust, and now the bids will come, which will factor in that supply. Earlier, the bids were basically compared with the round-the-clock power or the gas power, which is much, much higher than this cost. So, both in terms of the – so, this is that. In terms of the absolute quantum, as the solar, see, all the FDRE which is coming, or all the peak power is coming, or even the connectivity which power, ministry of power is giving, all batteries coming with solar. There is no battery which is coming in without solar, because it's all co-located solar. So, you are not seeing actually the sink which the grid needs because of excess solar. So, when the sink comes, when there is a net battery addition without solar. So, in terms of, we see that addition of new solar, addition of, let's say, ramping down of more thermal, right, we'll see the requirement of peak power going high, much more than, much more than currently. So, in terms of the factors driving it, that's there.

Yeah, I would like to add here, actually we have this peak is driven by the dust storm phenomenon. So you know that we are adding the rooftops, 6-7 gigawatts of rooftops. What is happening is, when you add rooftop that is also reflected in the grid, we are adding kusum that is also reflected in the grid. You are adding B worth to 0, 100 gigawatt hour, but I see that it will get pushed towards, as we are adding more solar, it's like making sure to the grid. As we are adding more and more solar in the evening and morning, see that we will be close to the situation. That's where this market will take.

Very interesting, sir. Thank you so much for sharing that perspective. And lastly, I think I just want to touch upon this, maybe a temporary slowdown in renewable auctions. Do you see some sort of a change in the pattern of demand, like you said, because of rooftop and because of CNI? And specifically for CNI, do we have plans for entering that space or anything on the captive side that you're thinking about?

So, yeah. So, in terms of the bids, Apurva, like we said, there is a recalibration because of the lean in the format and change in the, you can say, the binding nature of the bids. So, we see that the government-backed bids or the government-seti-backed bids will be coming quite strongly in the next, you can say, six to nine months and from there on. Because there is a definite plan to do that, and they are procuring various other communities like green ammonia and various other things, which will also add to the whole demand. So, they are diversifying their procurement. So, that's one. And the states will also come, the CRP will come, the peak power bits will come. So, there is going to be a revival of that. That is very, very positive about it. Secondly, on the CNI part, so that is something we are considering in terms of the various things, but as long as our pipeline and the IRR on the government bits are strong, right, it will always compete with the CNI for that, and we will never dilute the mid-team or high-team returns we target for this thing. And also, our focus is on CTU projects because it gives us flexibility. So, for using that power in terms of peak power or towards various use cases. So, we will always look for CTU-connected CNI customers. And, of course, we will definitely come in the next coming quarters in terms of some of the other use cases which are not non-government. So, we are actively exploring that, and we have made good progress on that as well. We will update you whenever there is anything concrete there, but there is a definite plan to do that.

Sure. Thanks a lot. All the very best.

Thank you. Next question comes from the line of Nikhil Abhayankar with UTM Mutual Fund. Please go ahead.

Sir, I just want one clarity.

I mean, X of best, if you look at the EBITDA, it has grown almost 21%, while we haven't really put in a significant capacity addition as such. So, what exactly is driving that number? And if you can also quantify the impact of coattainment in this quarter and why? Very important question, Nikhil. So, if you look at this quarter, our COF has gone up by around 30.9%. 30 is gone up to 30.9%, which is the absolute highest. So, that is the biggest contribution to the highest higher EBITDA we had in this quarter. So, like from last year, year-on-year basis, we've gone up from 28.5% to 30.9%, right? And from the last water also, we have gone up significantly. So that's the key reason, right? The second part of the question was what? No, I would have thought.

Repowering of the plant. So the plant what you have seen perhaps the last year, we will have, in this water, what we did in the repowering on the existing plant, that also is reflected in this. So these are the two factors which is driving the EBITDA, apart from the VESS. So, you asked one more, sorry, there was a second part to your question, Mr. Amir.

So, curtailment contributed around 1% of the revenue, only from the state, only from the state-based projects. So, that was the curtailment on the overall revenue 1%.

Yeah, that's the one reason we are also taking now, even the state-based projects, we are taking that to add a little bit of battery, so in future we can even capitalize on that.

So good, I think we didn't add it in the industry update. There is a circular which has come up, which allows you to use your surplus renewable, which you generate in solar, into battery. So that is a good OM, which has come from the ministry. So that we will do in all our state projects, that whatever megawatt are, we can charge, right, completely from that excess generation. It makes complete sense to do that, and that will completely eliminate the curtailment bit. Of course, it will be seasonal, but we will size up to eliminate as much as possible, and also the DSM. So these two things will help by adding these batteries, which we are doing. So in future, we plan to eliminate it. Of course, we have some regulatory solutions to this, which we are again taking up at the appropriate forums to have the same curtailment-related provisions which are there in the central grid in the states also. But there are some operational changes we are doing, and there are some regulatory changes we are doing to reduce this number of 1%.

Thank you. Thank you, and all the very best.

Thank you.

Our next question comes from the line of Anush Abadha with Investec. Please go ahead.

Hi, thanks for the opportunity and congrats on a good set of numbers.

So, just a clarity on a question which was asked by a previous participant. You mentioned this 1,400 codes of logged-in revenue from the BES.

Is it from the entire 10 gigawatt hour? Because in the presentation, you have highlighted that 50% of this 10 gigawatt hour BES is largely towards or catered to the upcoming FDRE projects. So, how exactly should we rate for it? Is this from the 50%? We have logged in 1,400 codes for the entire 10 gigawatt hour.

Like, we answered that it is around 70-80% of the 10 gigawatt hour we have contracted, right? So, 20% is still left to be contracted. And in terms of the, what was the second question? 50% ability. No, 50% is not right. Actually, all of our capacity will go to PPA, like we said, other than the, you can say 1200 MWh, which is in the merchant right now, which is again going to go to the future bits. So, there is no 50% ratio, unless you are referring to something specific.

Actually, his question was also that some of the person will go to FDRE project, which is getting access to those projects. Those projects, he have already taken under review.

So, that is not part of this sale. So, wherever the battery is going to the FDRE, you are right. Maybe you are referring to the Nemach or some other plant.

So, on an average, it is Thank you.

So, right now what we are delivering, we are only talking about that.

Fair point. And here, bunk cycle is for 3 hours or 4 hours, sir? The best?

No, 4 hours typically. Typically 4 hours. Only in one project we were doing 2 hours, which is now 4 hours. So, yeah, typically 4 hours, in some cases 6 hours also, depending on the PPA requirement. Some states are also buying 6 hours power, like till 12 o'clock, till 2 o'clock.

Okay, okay. And any plan to cater to the data center requirement on the CNSA?

So, yeah, it is a very promising sector, and we are building team around it. So, we have started with the hiring and other key strategic planning. So, of course, this is something we want to explore depending on the profitability, right? We want to play in the segment which gives us long-term concessions and also caters to our strengths, which are around, you can say, building infrastructure and building infrastructure relating to power, right, and also the related competencies we have. So, we are definitely, this is the segment we don't want to ignore. So, and of course, we are building our strengths around it in terms of the capabilities also and in terms of the marketing also. So, yeah, this is something which will – and macro-wise, it will, of course, add to the requirements of southern states and western states in India, which is a big positive in terms of round-the-clock renewable power. It is going to add, and we are going to see a lot of procurement which will be driven by this. And other than EV, right, this is the single biggest segment we see which will increase the power demand for renewables and the peak demand in the country.

So, there are two things I think I would like to add. As we are adding more and more EV, the peak power demand for one hour, two hour, three hour will keep on adding more and more, especially in the evening and daytime. And the second is, as we are telling here, is that even the solar energy is taking is also now creating a platform where they will work with the data center. They will work with the data center to procure power for that. So, if they also get into, they are also working in this area, so if they become And even with the direct

players, because they are very credible players. The only thing right now which we are figuring out is the profitability metrics, because the profitability we are seeing, of course, in terms of the headline, this is a good headline, but the profitability is something which we need to, I think, both on the cost side and on the pricing side, we need to really work to make the right come out.

Sure, sir. Thanks for this. Quite helpful. Best of luck, sir.

Thank you. Our next question comes on the line of Yogesh Patil from Dollard Capital. Please go ahead.

Thanks for an opportunity, sir. Now, you are guiding that 10 gigawatt hour base capacity will be available in the short-term market for a particular year, in the next 3-4 years. Then, what one can assume the base is the 10 gigawatt hour kind of capacity, or you can also guide us on the same annual basis. That's the first one. Okay, let me listen. So, you are guiding that a 10 gigawatt hour kind of a base capacity will be available for the short-term market for a particular year, in the upcoming next 3-4 years, correct? Then, what one can assume the base revenue from these 10 gigawatt kind of a capacity? Will it be more than 1400 crore kind of a revenue because already 80% of the capacity of 10 gigawatt is tighter and we are expecting a 1400 crore kind of a revenue in this year? So, this phenomenon of 1400 crore plus will be applicable to upcoming years also, or the question again, this is limited to only no year. From the next year onwards, the power demand will normalize to 6% and the added power will be back into the game. And the best short-term revenue realization will be on the lower side. Because right now, the realizations would be better than that, given an age, whether it is on short-term business dam or HP dam in all these markets. I just wanted to have your view on this.

Yes, yes, yes. Now, very important question you raised, Yubesh. So, in terms of the, there are two parts to your question. So, one is on the volume, which we can do, and another is the price, right, price we So, in terms of volume, we have contracted, it is only 80% of the volume we are targeting. So, that definitely takes the overall revenue to higher than 1,400 if we end up tying up that 20% more of volume, right? So, that is the current tie-up for this year. In terms of the going forward price stability and whether this was an exceptional year or not, So the key thing what we are finding is that a lot of states have not yet started buying best power, like I earlier answered in the previous questions. So this market is not yet tapped because very few DISCOMs, if you look at in India, have bought best power because it's a new form of power. The whole capacity has come up in the last six months. Whatever capacity is there in India has come up in six months. So, any capacity takes time for people to rely on that. So, we will see that new tenders which will come, which will focus on that. So, we don't see a slowdown in terms of peak demand. Of course, in terms of the pricing, there has to be an alternative supply, right? If the hydropower which will come back, if there is a fixed cost, if it was anyway not able to meet that peak demand. So, that's where I think even in the Al-Nino, I think there could be, and the other thing, other than the physical factors or the scientific factors, there are election-related factors which come up, right? There are some factors relating to the heat other than the Al-Nino and also the penetration of air conditioners and various other things. So, we don't see a slowdown. Overall, this is our macro analysis because we have a team which tries and maximizes the revenue, which predicts the revenue, and, of course, we are using various systems also. So, we don't see a slowdown in the pricing also for the next three years. And, of course, we can forecast beyond three years, but that's really susceptible to changes. But we don't see a slowdown based on various factors, and we spoke about the dub curve and various other things.

Yeah, so as I said earlier that first of all that 300 gigawatt hour of current demand to be met, that itself is a very big number to cope up. And as we are adding more and more solar in the rooftop, more and more and more solar in the kushum, what is adding is it is creating more dust curve. That dust curve will drive the evening and morning cost more, not met by the hydro. Hydro is, for example, when it runs, it runs 24 by 7, especially in the time when it runs. So the peak type demand which comes in, they are driven, they can be either addressed by the gas, weaker, if you are cheaper than the battery, and the third can be the pump storage. These are the three solutions for this software. For an 8R solution. And that will take long time, at least.

And on the technology part, the sodium batteries are making good progress in the world and China. You must have seen that in inter-solar, they have spoken about supplying these batteries in Europe in the cold climate. So on the cost side also, there are positives which can happen, which will increase the life of the battery to, you can say, closer to the PST timeline. So, that's a very key movement which is going to happen, which can move the profitability in terms of the overall peak power dynamics.

So, you believe that a 1,400 crore kind of a revenue run rate can be possible in next 3-4 years, considering the 10 gigawatt hour kind of a capacity in a short-term contract type. Will it be fair to assume in our financial modeling for next 2-3 years?

PPS we have, right? And keeping in mind the pipeline we have, right? What our aim is that we need to do this 10kWh of bits. Of course, it's subject to the return of the PPS. Right now, we have. So, you can assume it for the next 2-3 years because we have that pipeline, right? And we know the GNA and we know. So, for the next 2-3 years, you can make that assumption. Even more than 1,400, even more than 100. So, that's given our PPA timeline because it's very specific, right? So, as we are going forward, right, in terms of getting new bids, in terms of getting new business, that is our plan, that we will continue to boost that business because this is what we believe in, that we should do peak power, right? Beyond 28-29 is what I'm talking about, that we should continue to aim for such business, which provide you this opportunity, because we like this business in terms of the quick, you can say, time of implementation, in terms of the technology movement, in terms of the fundamental demand supply gap. So, you can make that assumption for 2-3 years, but beyond 2-3 years, it's dependent on the market, how we are able to get those PPAs, how the profitability remains for those PPAs. And, of course, we will continue seeking those opportunities to replicate this beyond 2-3 years as well.

Next question related to EBITDA margin. If we exclude the base revenue and contribution to the EBITDA from the base side, Okay. Then how much would be our clean or core EBITDA margins for the business during the quarter of F20-7? And what would be your EBITDA margin guidance for the core business for the next three, four quarters, considering the base EBITDA margin would be 80 to 82 percent?

So, if you remove pass, it's 91 percent is the EBITDA margin for this quarter, right? And that is, I think, with...

And that is static. Four quarters of the previous year, it was close to 90-91%. Except for the second quarter, it was September 25, it was 88-89%. So it is basically, because of seasonality,

this varies from, you can say, 88-92%. Yeah. 88-91%.

Yeah.

So that's how we can guide you, like we mentioned earlier, to keep on improving it. So that's... There would be further, depending on the project profitability also, like there are FDIs Thank you so much, sir.

Ladies and gentlemen, that was the last question for today. With that, we conclude today's conference call. On behalf of ACME Solar Holdings Limited, that concludes today's conference call. Thank you for joining us and you may not just make your answer.