JSW Energy Limited (JSWENERGY) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the JSW Energy Q3 FY26 Earnings Conference Call hosted by Investec Capital Services. As a reminder, all participant clients will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing star and then zero on your touch phone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Upadhyay from Investec Capital Services. Thank you, and over to you, sir. Yeah, good evening, everybody. On behalf of Investec Capital, I welcome you all to the conference call of JSW Energy to discuss the Q3F26 results. We have with us the leadership team of the company led by Mr. Sharad Mahedra, the Joint MD and CEO, Mr. Chandrasekharan Prabhaga, CFO, Mr. Vikas Chaudhary, Head IR and ARM. And with this, I would now like to hand over the call to Mr. Sharad for his opening remarks and taking the call forward. Over to you.

Thank you, Anuj. Good evening, everyone, and thank you for joining us today for JSW Energy's Quarter 3 FY26 Earnings Call. Before we begin our discussion on the results, I would like to wish each of you and your family a very happy new year. I am also delighted to warmly welcome our CFO, Chandrasekhar Prabhatran, who joined us at the beginning of January from J. S. W. Steel. Pravhatran brings with him over 25 years of rich and diverse experience across corporate finance, accounting, and governance gained through senior leadership roles in large enlisted conglomerates. He has been associated with the J. S. W. Group since November 2014 and was most recently serving as the Deputy Chief Financial Officer at J. S. W. Steel Limited.

His appointment also reflects

the group's strong emphasis on leadership development and internal succession planning. Kamatran will be closely working with me as we continue our journey of strengthening the company and taking it to new heights together. The third quarter of this fiscal has witnessed a flattish power demand growth primarily driven by an unusually long and intense monsoon season and cooler temperatures. This reduced the need for cooling and irrigation pump power demand, leading to a muted overall growth. That said, we strongly believe the long-term demand growth strongly remains intact, and the current crop is largely a weather-related phenomenon. Encouragingly, power demand growth in December 25 was robust at 6.5% year-on-year, driven primarily by strong industrial activity. Even for the first 20 days of January, power demand growth is robust at 6%. For the year-to-date period till December 25, overall power demand growth is stood at a modest 0.5% year-on-year. Another notable trend in last quarter was the all-time high December peak demand of 241 GW, which also represented the peak power demand for the quarter. To compare the peak power demand with the corresponding quarter of the previous fiscal stood as much lower, 224 GW. This underscores the underlying strength of power demand when weather conditions normalize, highlighting the continued structural growth despite near-term volatility. From power sector perspective, bidding momentum during the year has been mixed, reflecting a clear evolution in the sector priorities. There is a growing recognition of the need for reliable and formed power, with thermal capacity increasingly gaining prominence. On the thermal front, bids from various states aggregated 12.8 gigawatts during the first nine months of the current fiscal, underscoring renewed demand for dependable base road capacity. In contrast, renewable energy bidding activity has moderated with only 10.4 gigawatts for the first 9 months of this fiscal. Further, 7.6 gigawatts of storage bids were observed in the first 9 months compared to 1.6 gigawatts of storage bidding in FY25 in the same period. Additionally, for the first nine months of the fiscal, about 10 to 12 gigawatts of renewable generation PPA is estimated to have been signed. Overall, the bidding landscape points to a clear transition from plain vanilla renewable energy towards a more balanced mix of thermal storage and storm power solutions aligned with the future needs of grid stability and energy security. Despite this broader moderation in bidding activity, our growth pipeline remains firmly intact. We have already logged in about 18.7 GW of incremental capacity in generation and 29.6 GW in storage, which will take our installed capacity beyond our stated target of 30 GW in generation, While we are confident of achieving our 40 gigawatt hour in storage by 2030. During the quarter, the merchant power market remained soft, with day-high prices on exchanges declining both sequentially and year-on-year basis. Despite this, our merchant realizations were at 20% premium to the average exchange prices during the quarter. This was possible due to strategic tying-up of various back-to-back short-term contracts. Further, it is encouraging to note the improvement in the merchant tariffs by about 30% in the first 21 days of January compared to the average tariffs in the previous quarter. Despite last quarter's subdued merchant market environment, the impact on our business has remained limited. This resilience reflects the proactive de-risking measures we have implemented over time, including prudent portfolio diversification and disciplined contracting strategy. Currently, our open capacity stands at approximately 8%, which will further reduce to around 5% from 1st of April 2026, following the securing of 400 megawatt, 25-year power purchase agreement for our Utkal plant in Ulissa with Karnataka disforms. Additionally, we have also signed 115MW short-term Power Purchase Agreement from our Ustel plant with Assam Dispon for two years, which further reduces our exposure towards merchant markets. With this, our total plant capacity, almost more than 95%, will be tied up in long term. As a result, our portfolio continues to deliver stable and healthy returns, underscoring the strength, resilience, and flexibility of our business model, even in challenging market environment. Now, I would like to share the key highlights of our performance this quarter, during which we have made meaningful progress across several fronts. Our power sales recorded a strong 65% year-on-year growth in quarter 3 of current year, increasing from 6.8 billion units last year to 11.1 billion units in the current year, in this quarter. For the 9-month period ended FY26, next generation grew by 62%, rising from 24.4 billion units to 39.6 billion. Notably, long-term PPAs accounted for 82% of total power sales and registered a 63% year-on-year increase in quarter-three, supported by our disciplined and robust portfolio de-risking strategy. From a mode-wise cost perspective, we witness improvement across all sectors. Our solar and wind portfolio next generation rose by 149% year-on-year, led by organic capacity additions and contributions from O2 power. Thermal generation increased by 55% year-on-year, primarily driven by contributions from KFK and capacity additions at our Utskal plant. Further, hydro generation grew 27% year-on-year versus the national average increase of 13% during the quarter, benefiting from improved hydrology and contributions from our new Kutahar plant in the market. I would like to reiterate that our quarterly power sales growth of 65.5% year on year stands out against the broader industry backdrop which recorded a demand degrowth of 0.1% year in quarter 3. Over the past 12 months, we have added 5.2 gigawatt of capacity, comprising of 3.1 gigawatt of renewable and 2.1 gigawatt of thermal, which has been a key key driver of our year-on-year EBITDA growth. This expansion includes inorganic capacity additions of 1.5 gigawatt in renewable and 1.8 gigawatt in thermal, further strengthening the scale and resilience of our portfolio. During the quarter, we added 125 megawatts of new capacity and renewals, including hybrid projects, taking our total installed capacity to 13.3 gigawatts. Our capacity addition represents a significant year-on-year growth of approximately 64 percent, up from 8.1 gigawatts in the same period last year. Building on this robustness, we have equally delivered in shaping the quality of our capacity links. On the capacity front, approximately 3.3 gigawatts is formed. Around 25% of our current installed capacity is secured with high-quality, group captive, and C&I customers. As we scale beyond 30 gigawatts, this is expected to further increase to approximately 5.7 gigawatts. Importantly, these capacities are contracted at highly remunerative tariffs with renewable tires at a high blended average tariff of over Rs.65 per unit. Turning to our recent capacity additions, I am pleased to share that Kupair plant has now fully stabilized and generated about 130 million units during the quarter. We have also continued to remain at the forefront Thank you. I am pleased to share that as a reflection of our strong green focus and long-term commitment to carbon neutrality, our expanding renewable portfolio enabled us to avoid approximately 14 to 15 million tons of CO2 emissions in the first nine months of this fiscal, based on the prevailing Indian grade emission factor. Another important milestone during the quarter was the preferential allotment of equity shares to the promoter group involving a capital infusion of 3,000 crores, comprising 500 crores through equity and 2,500 crores through warrants, which will convert into equity over the next 18 months or earlier. In addition, consistent with last year, we have also received shareholders Thank you. We also received the NCIT approval for our resolution plan committed by the company for Rygar Shampa Railway which is the KfK plant rail infrastructure. Further, I am also happy to share couple of important strategic developments post the quarter on the thermal front. Post Q3, we have placed an order for two ultra-supercritical turbine generators of 800 MW each for our Salvoni Thermal Plant in West Bengal with Toshiba JSW. The turbine generator package will be manufactured and delivered in line with the project's construction schedule, enabling timely completion and commissioning of the plant. By sourcing critical equipment through our associate company, we are strengthening supply chain certainty, improving coordination during execution, and mitigating risk arising from industry-wide equipment constraints. This contract represents a strategic step in enhancing supply chain control and ensuring execution certainty for the Salabhani project. Further, at Salgoni location, I am pleased to announce the signing of our second 1600 megawatt PPA with West Bengal Discom for a second thermal power plant at Salgoni, increasing our total capacity at the size to 3200 megawatt. This makes Salgoni our largest single-location asset. The project benefits from its strategic proximity to Goldock as well as synergies with the existing 1600 MW unit under construction, driving significant operational efficiencies. With this, our secure thermal capacity stands at 10.7 gigawatt and total login capacity at 32.1 gigawatt, providing ample visibility to our ambitious 2030 target of 30 gigawatt. Moving on the financial performance, which I am sure most of you have had an opportunity to look at already. Revenue for the first quarter increased by 61% year-on-year to about 4,255 crores in line with the robust growth in capacity and generation. Correspondingly, EBITDA increased by 98% year-on-year to 2,202 crores for the quarter. With a continued capitalization of newer assets on the balance sheet, interest in depreciation were higher on a commensurate basis. Depreciation more than doubled and interest was jumped by almost 2.6 times on a year-on-year basis in quarterly. The company has recognized a deferred tax asset and therefore the profit after tax is up by 150% to 420 crore in the More importantly, our cash profits increased by 12% year-on-year to about 570 crores during the quarter. On the default tax, our JSW Energy Uthkal has entered into a 25-year power purchase agreement with Karnataka discount for supply of 400 megawatts of power commencing for February 2026. In view of the reasonable certainty of sufficient future taxable profit from this PPA, the company has recognized a deferred tax assessment of 557 crore on carried forward based to business losses and unabsorbed depreciation. Further on our KFK asset as well, there was a deferred tax recognition of 189 crore during this quarter related to carried forward business losses and unabsorbed depreciation. Further to the above, in alignment with the changes in the labour codes announced recently, we have also provided, with a conservative approach, we have provided 65 crores in relation to this, which is one of provision in nature. Turning to leverage, net debt at the end of the quarter is put at 63,771 crores, up from 61,960 crores as on 30 September 25. Excluding capital work in progress, the pro-pharma leverage ratio stands at approximately 4.9x. The net leverage is expected to come down upon full receipt of the recently completed preferential allotment proceeds. Further, our liquidity remains strong, supported by cash and cash equivalents of over 7,100 crores. On the cost of debt, as guided earlier and in line with the recent rate cuts, we continue to see a sustained reduction in the weighted average interest rate. During the quarter, our cost of debt declined by about 11 basis points quarter on quarter from 8.79 to 8.68%. We expect this declining interest cost trend to continue as and when our bank loans undergo their interest reset. Calc returns on net worth after existing for our investment in JSW scheme shares remain robust at approximately 19 to 20%. You may kindly refer to the slide number 14 for this. Finally, on receivables, total receivables at the end of December stood at approximately 3,000 crores. Translating to debtor days of 73 days, which is a sharp reduction versus the 96 days which we witnessed in the corresponding quarter of last fiscal. The key takeaway is that the robust catastrophe additions undertaken so far have now begun translating into higher energy generation as well as cash flows. And we expect this momentum to improve going forward. With this, I conclude my opening remarks, and we can now open the floor for Q&A. Thank you.

The question queue assembles. Our first question comes from the line of Pramit Kishore from Access Capital.

Please go ahead.

Good evening, and thanks for the opportunity. My first question is in relation to the Saiboni project. Could you outline the PPA details for the first 1,600 megawatts, as well as the subsequent 1,600 megawatts PPA that you have entered with Beltingol? What is the nightly K-TECH payout for this mega-project, and how are you looking to payout commissioning of the units? That's my first question.

See, the PPA timelines first to me, thank you very much. The PPA timelines which are there is from the date of proceed, notice to proceed. I think the date is 48 months for the first unit of first phase and second unit after another six months, that is 54 months. So, all the planning is within the same timeline. We will definitely be completing the phase 1 within the PPA timelines which are there. So, that we are sure because we have our supply chain is on the boiler, turbine and generator which is a challenge this country is seeing as I said in my remarks also. That is all under control. So, this is what we wanted to do. And also, in terms of the capex, we will be announcing, but yes, you can benchmark whatever we have said in the domain is, that maybe the phase 1, about 16,000 crore of investment for 2 into 800, which we have announced earlier. So, we will be around that number only.

Okay.

And what would be the tariff arrangement here for fixed payable and what are the details? See, there are two first bids. The tariff is in the range of 3 rupees 65 pasha, which we have already announced, and the second, 4 rupees 6 pasha. This is the fixed class, this only. 3.6 for phase 1 and 4.06 for phase 2. Fuel is pass-through. You live faster at what heat rate? Those details we will provide you, but that is asked for the guideline which is there, which is 2350 heat rate.

So, this is Vikas here. We will be happy to connect with you on this if you want the details. We will give a detailed presentation and we will be happy to connect with you.

Perfect. My second question is on, you know, you have targeted in the second half of the year to commission about 1.5 watt giga watt if I recollect. And, you know, broader question is that given the grid constraints for this financial year, you know, on an organic basis, how much RE capacity would you be able to close nearby? And for the next financial year, you have a sizable under-construction, you know, sort of portfolio. So, given great constraints and other challenges, what can be, what is doable in FY27 on organic basis? Also, if you could attach, yeah, yeah. Yeah, yeah, please do. And just to close this question, if you could also, sort of, there's a big ramp-up in CapEx

See, Sumit, one is that as we have said earlier, you rightly said that 1.5 gigawatts of fresh capacity addition during H2 of current fiscal. Out of this 125 megawatts we have commissioned during quarter 3, so we are well on track, and in the current quarter, the capacity additions which are going to take place, It shows we will be meeting the guidance that we have given for 1.5 gigawatt in second half of current system. And for this grid, connectivity, and land, everything, these projects are at advanced stage. Second, for next year, whatever plans we are having, we will be definitely giving the numbers later. We are in the process of finalizing our next year plans, but also keeping in mind the connectivity availability and land. And as I have been saying for quite some time, we are absolutely insulated for next one year to two years from connectivity challenge. Reason is two steps what we took have secured us from this uncertainty which the country is facing. One is that we have majority of our projects coming next two years are SCU instead of ISCS inter-state. It is our inter-state and SCU connectivity is available. And second is the O2 acquisition. All capacities which are going to come under that, 100% of the connectivity is available with us for the entire to reach the capacity of 4.7 gigawatts. And beyond that, if we have to do, there is additional capacity, connectivity is available beyond 4.7 in O2 also. So these are the factors which gives us almost certainty that we will not be facing any challenge on these factors. Regarding CAPEX numbers, as if when we finalize our next year plan, which we will be doing shortly, we will be definitely making as the right time the announcement.

Just to close the loop on, you know, you have about three other posts.

Sir, your audio is not coming through. So, I request you to please repeat it.

Given connectivity challenges, can get permission by, say, FY28 and also.

See, yes, FY27 and FY28, more or less, whatever plans we have to reach our 30 gigawatts by 2030, we are on track, and till FY28, we have absolute clarity of the connectivity also.

Thank you, I'll get back in the shoot.

We will be commissioning as per the PPAs, because majority of our capacity, the PPAs have been signed, so we are on track to complete everything within the PPA timeline.

Thank you.

Our next question is from the line of Mohit Kumar from IPACI Securities. Please go ahead. Yeah, good evening, and thanks for the opportunity. My first question is related to the PPA which you acquired for Invarukh is Karnatka. I think it's 400 megawatts. Is 400 megawatts net capacity the first sub-service question? Okay. Is it possible to help with a fixed tariff of this particular PPA? Okay.

See, this 400 is the net capacity one, and this is a tariff at 5.8 rupees at my plant bar.

And the fixed tariff there is this? No, no, this is a fixed tariff of 5.8,

but also escalable, but with this 5.8 tariff is the year 1 tariff which we are going to get from Maharashtra, from Kanataka. And is it a single tariff? It is fixed plus variable, fixed the single tariff bidding, isn't it? For 25 years, is that right?

Yes, yeah. Understood, sir. My second question is on the salmonee. Of course, we have already given the order for the turbine generator. For the boilers, for 3.2 gigawatt, what is the plant? Are we giving it to the GE facility which acquired or it only shows the source tube components?

See, yes, as we have announced earlier, the GE boiler manufacturing plant in Durgapur, which we are in the process of acquiring, and we expect the process to be completed and the plant to be fully littered by June or July of 26. So, we will be making these boilers for our captive requirements in Dhulvapur only, which has a capacity of almost about 1.5 boilers of 800 megawatt, 1.5 boiler equivalent materials to manufacture, and as and when required, we will increase the capacity also there. So, we will be manufacturing our own requirements from Dhulvapur boilers unit only.

And this is my last question. What is the progress on conversion of our LOA into PPA? Of course, we have a good pipeline of PPA, but still some of the LOAs on the RE side have been there for quite some time. So, what is the kind of conversation happening with the counterparties?

Yes. See, if you see that our total capacity which is there, is 12.6 gigawatts of capacity, which is already contracted. Already TPA signed. Are we front-hand talking?

Yes, sir. My question was more about the pipeline of Eloy, which is lying with us for some time.

Yeah, that is about, see, there is a total capacity which is, there is about 4.5 gigawatt, for which there is dependencies, and some we are expecting shortly to get signed, and others we are waiting, but keeping in mind that our contracted capacity and the PPA signed capacity, the gap is such that we are absolutely certain that 30 gigawatt number, what we are telling by 2030, that is on track.

So Mohit, if I have to add on what was the first thing, that we already have with current capacity and with under construction, we had a 27.5 gigawatt, right? And on pipeline 4.5 and the details of the pipeline is there. So you know as well as we know when this pipeline gets converted, right? There are lots of capacity like this which is pending in closure. So, as and when they close out, we will let you know. And we are more than certain that we will reach 30 giga over by 20.30.

Yeah. Thank you and all of it. Thank you. Thank you. Thank you.

Our next question is from the line of Rajesh Majumdar from 361 Capital. Please go ahead.

Yes, good evening, sir. So, in line with the questioning earlier, I had a question on the overall quantum bidding while you are saying locked-in contracts is fine. But are you forcing a reduction in the total bidding space, particularly in the renewable space, next year, in terms of the overall market size, in which case, keeping our market share around the same, the level of additions will be limited to about 2.3 gigawatts per annum, barring the locked-in capacity. Is that a fair assumption?

I think, yes. See, there are, we have to understand that there are two, three challenges which are being faced. If you see, currently, the capacity with Greenfield, as I announced, is extremely low in terms of the bidding which has taken place in first nine months. The unsigned PPS which are there, close to 40 gigawatts of bids wherein the PPS signing is pending. So, that is also slowing down the fresh bidding. Second, the uncertainties in terms of the connectivity, like we are seeing a very good greenfield capacity addition in the current year in the Arvin space. But will the same number continue for next 2-3 years is a challenge because now from FY27 we are seeing that the challenge of getting the fresh connectivity will be one of the major bottlenecks which is going to be there. So, all these factors put together, we definitely see that there will be a moderation in the bidding which we have been seeing till last fiscal. And this is likely to continue.

But even with that, you are saying, your assumptions assume around 4, you know what, additions per annum. So, that is a good history.

As I told you, you see our present operating capacity, like we are ending the year, maybe in the range of whatever I say, 14 and a half, 15 gigawatts, and then another about 12, you say, 13 gigawatts capacity already tied up.

And also, and also, just to add, and also, there is the calvary, which is 3200 megawatts, which is 2030 and 31. So, it will be more towards the end. So, it's not a capacity divided by number of years, is what we are trying to say.

Sir, I understand that. Okay, thank you. My second question is, sir, on the KSK Mahanadi, what is the impact of the tariff reduction on the overall EBITDA per annum? And related question is, C2, we have seen a 30% drop in the standalone revenue. Is that a reflection of that or is something else?

No, see, one is that reduction in revenue, we have to understand that the conditions here have been, the reserve shutdowns which have backdowns from the states, especially in the northern state of UTI, which has resulted in the lower revenue in generation, but we have to understand this is a tide of capacity, my plant availability is there. So, for me, this is not going to have any significant impact on my progress. I think we will be getting as for the plant availability, my fixed charges. So, that is one we are absolutely certain that that is not a challenge. Then you ask one more question. T.S.K. T.S.K. T.S.K. T.S.K. T.S.K. Tariff reduction. Tariff reduction. Okay. There will be of course going forward in FY27 as per the PPA term. There will be a tariff reduction of close to about 1.25 PAKA from one of the discomps. So that will definitely have some impact, but operational efficiencies as I said earlier. During the year, we have been building up a lot of operational efficiencies and which have come. So, that will give us annualized benefit next year. To some extent, we will be definitely reducing the impact of the service reduction from that side, and also the sale of the reserve shutdowns and other things, backdowns on the plants which we have started. So, that we are expecting that the impact on the overall habitat will be there something, but it will be minimal.

What portion of total capacity is impacted by the service reduction out of 1800?

What capacity? Thousand megawatts. Thousand?

Okay.

Thousand megawatts, which is with UP, tied with UP.

Right, sir. And my last question is, when do we see the first tranche of capital coming into the company and a kind of... And also, do you think that with the promoter stake coming in, there is a chance of credit rating improvement in our debt? Yeah, that's about to say. Thank you.

And see, the thing is, as I have said, maybe you will see the numbers in December closing. We have sufficient cash flow, free cash with us to take care of our going forward the capex which is required and the funds which are required. But as I told you, whatever capacity addition plan, once we finalize for next year, capital requirement, we have the enabling approval to go for the fund raise. As and when during the year IGP, definitely we will be going, but right now we are comfortable, and because we have got the promoter equity inclusion part of that already, so which will take us there, and definitely we expect as a market is definitely expecting that the promoter investing at the current level, higher than what the current level is, is a positive for us, which the market is also seeing, and our agencies also.

And to add on to the rating part, we are one of the best ratings, double A, in the texture, but really appreciate your point that we will also take it to the rating agency and upgrade it for our benefit. Thank you very much for the time here.

Thank you, sir. Thank you.

Thank you. Our next question is from the line of Apoorva Bahadur from IIFL Capital. Please go ahead.

Hi. Good evening. Thank you.

Sir, I was just curious about Utpal TPA. You said that it was a single part, single tariff base. Just wanted to know, in case there is a backdown for the plant, how do we get space? Will the space be the entire 5.8 rupee tariff or?

Yeah, as I told you, this is the total tariff, which is 5, exact tariff is 5.78 Paisa, out of which the fixed part is 4.04, and 1.74 Paisa is the variable cost, and the plant availability is there as per the PPM, as fixed cost is accrued.

Okay, I'll miss it, sir. Thank you so much. The other thing, sir, on Salmoni, the tariff for phase two is, the fixed tariff is around, what, 40 Pesha higher than phase one? Yes, yes. In my understanding, typically if the plant is larger, there could be utilities which are, there could be commonality of utilities and typically the capex per unit per megawatt goes down. What precipitated this rise in Paris and was the state okay with it?

Yeah, we have to realize, see one thing. The first phase of my Salabuni project was a year back when the tariff was discovered, the fixed cost. After that, if you see all the bids which have happened, have happened even at a higher price. State is seeing that what is the total cost, and this is still one of the lowest tariffs. State is seeing this as 4 into 800. Blended, if you see, it becomes a significantly attractive tariff as compared to the almost 12 gigawatts of bidding which had happened during last one year. In thermal case, this is one of the most attractive tariffs. So, state is absolutely comfortable, and regulatory approval also is in place. Keeping in mind what has prevailed, we need to know what has happened in Azharbiz, in Assam, whether it is Bihar, or whether it is empty, you will see the state. So, this is a very good tariff which has been discovered.

Understood. Sir, I see your presentation. I believe the BESS standardization and cell assembly plant is about to get commission. We have certain BESS PPAs as well which we need to execute. So, will we be importing the cells and converting it and containerizing it at our facility for these people? Yes, exactly.

Yes, we are doing that.

Okay, and have you placed the orders for the cells yet?

Yes, we have placed for some, and the material will start coming because the trial production plant is stabilized. We have submitted our products for necessary approvals, which we expect by March, end, or early April, the approvals to be in place. But by the time, we will start the production sometime in February, between February and March.

Sir, can you share how much of cell capacity or cell import orders have you placed?

Exact number, I will get back to you right now. I will let you know. But yes, we understand and we have that sensitivity done. I can understand from where this is coming in terms of the prices, which we have seen the northward movement in prices. So, we have been aware of this trend and accordingly we have taken the necessary steps at right time.

So, sir, much appreciated. Thank you so much.

Thank you. Thank you. Our next question is from the 9 of Satyadeep Chen from Ambit Capital.

Hi, thank you. Just want to check on RE contracting capacity, PPA. In the PPA, just specifically, can you give an update on FDRE-4, what is happening there?

That, that battery thing.

We are waiting for the regulatory approval. We are waiting for the regulatory approval for the FDRE. We have received the letter. We are waiting for regulatory approval. That is, we state there is no further communication to us from Rajasthan on this.

There is no communication on translation or anything.

We are waiting for the PTA has been signed. We are waiting for the regulatory approval. That's all. Nothing else. PTA has been signed.

That I know, but the HRC approval is still pending, right? Yes, yes, yes. And just want to understand, on the NEP also, the government has been focusing a lot on distribution side, you know, historically, that is one area that you will not focus on. Is there anything, are you incrementally looking at that at all, or is that a no-go zone for you?

So, there is nothing, there is no go for us. We definitely keep looking towards the opportunities as the sector and the segment is evolving. Now we see lots of tailwinds in this area also. So, we are in the sense that looking towards the various opportunities, we are estimating, we are also observing what is happening in UK, which has come out with privatization. So, we are keeping a track, but definitely, we have to come with a concrete plan, but we are there, there is definitely, no way is not the world for us.

Just come to me, you have evaluated, you will take a decision later on, but you have evaluated all this prioritization opportunities.

Yeah, we are in the process, because there is a sufficient capital allocation strategy also efficiently, so that also is a part which claims that how to prioritize and when to work.

Okay. And on the DSM, just wanted to, given you also have a very wind-heavy portfolio, have you also obviously commented on your proposal for DSM? Just wanted to understand, the internet is also talking about DSM being a part of the thermal by 2050.

See, this is an industry-wide issue we have to understand. So, as an industry, we are, technically, we have taken up, and the losses which are there at the industry level because of this is something, the pooling and other various other options which are, as an industry, we have taken up. And Wind Association is also actively working on these settlement mechanisms, and lots of resistance, it would be relaxed, is what we feel, and will let us wait for some more time on this. But yes, industry has taken this up with a minute.

Okay, thank you so much.

Thank you. Our next question is from the line of Nikhil from UTI Mutual Fund.

Please go ahead.

Thank you, sir. Just have a couple of questions. So, we have seen a lot of renewable generation getting hurt in the quarter.

Wanted to understand how much was the impact offered on our financial? See, see the curtailment

which is there, we have to understand that again because of the evacuation constraints and respect to being witnessed majorly in the state of Rajasthan. So what is happening, there are two types of curtailments. One is against the GNA which is there, that I had the grid connectivity and still the curtailment is there for the grid stability coin. And financially I am protected because I am getting the full payroll cost, full as per the charity coin, I am getting that. A part of our, small part of the capacity which came up early and the connectivity is maybe a few months ahead, we have got a TGM, which is a temporary connectivity. As of when there is a pressure on the grid, this temporary grid connected with connectivity gets curtailed, wherein there is a financial impact. So, our portion is significantly small as compared to the large capacity which we operate. So, our capacity is negligible right now. So, it will now die back on us. And the positive which has happened, we have just maybe about a week, 10 days back, the new, this evacuation, this connectivity has got started. With this, the even the curtailment has significantly reduced, which has benefited us also from the temporarily grid-connected portfolio.

Understood. Any understanding also why the wind PLFs have been lower because industry-wide they are far a bit better than what we have reported at 16%?

See, the thing is, we have to understand the wind portfolio. If we see asset to asset, our wind PLF, in fact, has seen one of the best and significantly higher than what it was last year. We have to remember that a large portion of my acquired capacity of Micra, which is from a 50 kilowatt machine to maybe 2, 2.3 gigawatt of machines. So, there the PLFs are low. Those are low PLFs by design, which all was considered at the time of exhibition, the valuation was done accordingly. So, when on a blended basis, you see, our PLFs on a blended basis may look lower, but on all the fresh capacities which we are commissioning, there the PLFs are in line or slightly better than what is there in the country. And going forward, as in when the new capacity is getting added, with the newer portfolio percentage of wind increasing in the overall, our PLS will also overall also be improved.

The final question on the thermal bit, I mean, at 4 rupees, I mean, the returns that

you make are very good. So, any understanding as to how big can we look at our thermal portfolio, okay, 550 or down the line?

Right now, if you see that the thermal portfolio has a time period of maybe 48 to 54, 60 months to complete the project, the refill project. So, right now, what we are seeing is that 4 into 800 we have in Calamoni, which we are absolutely working on. In addition to that, at KSK when we acquired another 3 into 600 work which is already on is one capex because that will be balance of plant was fully ready, part work of other three units was done. So, this will be completing additional capacity of 1.8 gigawatt at TSK will be coming at a much lower specific cost capex as compared to a greenfield and as you rightly said what are prevailing in the market. So, we are right now, next 5 to 6 years, seeing Stalvoni coming in, KSK edition, and maybe if any other good opportunity is there, we will be open, but it's a time, which takes its own time.

Okay.

We have started CapEx on the additional 1.8 gigawatt at KSK.

Yes, we have started for the fourth unit, which was already 30-40% of the work was complete when we acquired, and also some of the material which was lying in the court, which we have been able to get after the LCIT order, we have placed the order, and enabling work has started, and now very soon the entire work will start, and we expect in about three years time we should be in a position to commission this. Commission, one unit or the three units? Both units, and then subsequently every three to six months, that is two units also. Thank you, sir.

Thank you. Ladies and gentlemen, you are requested to please restrict yourself to two questions only for participant. Our next question comes from the line of Atul Tiwari from JP Morgan. Please go ahead.

Yes, sir.

Thanks a lot.

Sir, my question is on industry. So, you mentioned that in the first nine months, we have seen about 12 gigawatts of thermal built from the state. So, do you mind how much more can happen over, say, next one or two years from the state strongly? Are we looking at a similar number, higher number? And, you know, what can be your share potentially for the new thermal collect?

Yeah, this is, again, a question. You see, the government of India has announced 97 gigawatts of capacity addition, fresh capacity commissioning by 2034, 32 to 34 period. So, in line with that, whatever the pipeline is and balance, so we see some bits, fresh bits definitely will be coming. Some of the states have already given their indication that they are preparing for the bidding. So, we expect maybe giving a exact number will be difficult, but yes, definitely there will be some fresh bits we expect at least for next one and a half to two years in thermal space will be coming. Regarding us, as I told you that we are absolutely full to 2031-32, but yes, any attractive opportunity with the sufficient timelines and efficient capital allocation, we will be exploring all the possibilities and decide. Because now we are secured from the material supply point of view, supply chain security with the acquisition of GE boiler plant and placing the Toshiba into the Toshiba JSW. So, we are secured in terms of the supplies of BTG, which has been a big constraint for the industry. So, we will be evaluating the opportunities as and when the future gets come.

Yes, thanks a lot, sir. And then my second question is on, say, console, you know, PDT or PAT numbers, excluding the deferred taxes. So, obviously, the capacity growth has been quite strong and generation and cash flows are, you know, good. But your PDT has been under pressure, you know, because of depreciation and interest costs, You know, down, you know, in second quarter, I believe, and this year it's been lost. So, I mean, how do you think about this dynamics as you further ramp up CapEx and capacity over next one, two years? I think because, you know, it does impact your reported, you know, ROEs, you know, post-acquisition, etc. So, is that a target in your calculation at all to get the reported ROEs to 30, 40, 50% kind of number? Are you okay to continue at a very subtext PBT level?

Yeah, I will request Mr. Prabhakaran to just reply to your question.

Sir, if you look at, you know, currently we are kind of adding capacity. Initially, what happens is that as you add capacity, initially, I think, if you look at the returns, it is kind of quite a lower return. And overall, once the interest and this one starts coming down, that is the time in which basically you will find the returns at a PBT level. So considering that, that initially since we are in the kind of phase, where we are in the distribution phase, the next 2-3 years we will have, and this quarter specifically we will have anyway a lower CELF, right, in terms of CELF, both for wind and for solar. So that's a seasonal one, but as in when we kind of stabilize, I think we should kind of even out.

You know, and to add to what Pravatarin said, we have about 5.2 gigawatt of capacity which is ring and hydro, right? So, that on third quarter is always muted. So, we should actually look at it from on a year basis than just looking at one quarter. Yeah, okay.

Thank you. Thank you. Ladies and gentlemen, we will take that as our last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Thank you, everyone, and thanks for being with us today, and again, wish you a very, very happy 2026, and look forward again meeting you all. Thank you very much.

Thank you. On behalf of Investec Capital Services, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.