JSW Energy Limited (JSWENERGY) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, goody and welcome to JSW Energy Q4 FY26 Post Result Earnings Call hosted by PL Capit. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star 10-0 on your touch-alone phone. I now hand the conference over to Mr. Vishar Perival from PL Capital. Thank you, and over to you, Mr. Perival.

Yeah, thanks, Michelle. Good afternoon, everyone. So, I'll welcome you all for the quarter four earnings call of JSW Energy. Today, we have leadership team of JSW Energy with us, led by Mr. Sharad Mahindra, joint MD and CEO, Mr. Chandrasekran Prabhakaran, CFO, and Mr. Vikas Chaudhary, head investor relation and ERM. I'd like to thank you to the management for giving PL Capital the opportunity to host the call. And now, I'm giving the speaker to Sharad, sir, for the brief from him, and then we'll have a line open for Q&A.

Thank you, Vishal. A very good afternoon to everyone, and thank you all for joining us today. It is my pleasure to share the highlights of our performance for the quarter and the year gone by. FY26 has been an exciting year where we began to translate the bold ambitions of our Strategy 3.0 into hard business outcomes. During financial year 2026, we increased our installed capacity by 2.6 gigawatt to reach at 13.45 gigawatt, with generation growing commensurately by 58% year-on-year. The company reported its highest-ever annual EBITDA of 11,041 crores in financial year 26. Before I delve into our performance, I would like to share some sector observations. India's power sector continued its structural transformation in FY26, though demand dynamics were different from what we saw in recent years. Total power demand for the country grew modestly at 0.9% in FY26, the most muted growth in last 5 years, driven by an extended monsoon season that weighed on consumption through the first half of the year. However, from quarter 4 FY26 onwards, we saw a fair demand recovery with demand growth rebounding to 2.1% in quarter 4. In FY27, so far, year-to-date demand growth remains healthy at a growth of 4.6% year-on-year. Overall, the season softness that we have seen in the first half of FY26 does not, in our view, alter the medium-term structural demand story in any way. India's growing industrialization, organization, and rising per capita consumption continue to underpin a 5-6% CAGR in power demand over long term. Peak demand on 25 April 26 reached to 256 GW, and with the summer of 2026 now commenced and expected to be severe, the system is positioning to handle a new peak of approximately 270 GW higher than the 250 GW On the supply side, India added 64.9 GW of new capacity during the fiscal, of which renewable energy accounted for 50.9 GW, translating to 78% of total capacity additions. Non-fossil sources have crossed 50% of total installed capacity for the first time in FY26, a landmark moment for the sector. The ongoing West Asia crisis has further reinforced the need of energy self-reliance for India. India's coal reserves insulate us from crude volatility, an advantage the country is actively leveraging. Structural shifts toward induction heating and EVs are expanding electricity demand, while data centers are also expected to anchor the long-term uptake in India. The merchant market remained soft through most of FY2026, averaging approximately Rs.3.86 per unit on exchanges, reflecting muted demand. Despite this, in line with what we have maintained, our FY26 merchant realizations commanded more than 20% premium to average exchange prices, which are driven primarily by strategically executed back-to-back short-term contracts. We are already seeing tariffs from up in FY27 as summer cooling demand builds. As mentioned earlier, till date, the power demand is up by 4.6%. Now, coming to company performance, FY2026 has been defined by scale and integration. We have added 2.6 gigawatt of installed capacity during the year via a calibrated strategy of organic and inorganic route, taking our total operational base to 13.45 gigawatt, making us one of the largest diversified power generation companies in the country. The additions span organic commissioning across wind, 240 MW, solar, 305 MW, hybrid, 451 MW, and hydro, 240 MW assets. And the full integration of all the inorganic acquisitions was completed in FY25 and FY26. The integration of O2Power, the 4.7 gigawatt renewable energy platform that we acquired in April 2025, has progressed well. O2Power's operating capacity has grown to approximately 2 gigawatt at the close of FY26, with active construction underway across the remaining portfolios. It's asset quality, underpinned by diversified geography, long-term PPAs with credible counterparties, supported with 100% connectivity and majority of the land, and rich tariffs, has met our original underwriting assumptions. Coming to thermal, on KSK Mahanadi, our 1800 megawatt operational capacity delivered robust performance during the year, driven by synergies post-acquisition. We have been focused on implementing cost efficiencies and improving plant performance, and I am pleased to report that PLF has remained healthy through FY26 and among the top 10 plants in the country in the first full operational year in our hands. The ramp-up plan for the remaining units of plant is progressing on schedule, with water and rail arrangements formally in place post our recent acquisition of KSK's water and rail SPVs. On the organic front, we commissioned 1.24 gigawatt of new capacities during FY26. Notably, the 240 megawatt Kutahar hydroelectric plant, which was commissioned in quarter 2 of FY26, is one of the fastest timelines for a project of its scale, further cementing our position as the largest private IPP in hydro sector. We also acquired one 50-megawatt Tidong hydropower plant from Statcraft, which is at an advanced stage of completion. I am happy to tell that 50-megawatt of this has already been commissioned on 7th of May 26, and balanced two units are expected to be commissioned within this quarter before June 26, which was against the original plan of October 26. This timely commissioning will help us catch the ongoing hydro season, adding meaningfully to the top line and bottom line. Alongside renewals, thermal power has regained its prominence as a reliable base load, and we made rapid strides on this front as well during FY26. Following the signing of 1600 megawatt Salaboni PPA in FY25, we secured an additional 1600 megawatt and signed the PPA for the same location, making Salaboni our largest single-site asset at 3200 megawatt. On the first 1600 megawatt project construction has commenced, and equipment procurement is on schedule. As we have informed, in parallel, we have taken strategic steps to de-risk our thermal supply chain through the strengthening of Toshiba-JSW joint venture for turbine generators, and the acquisition of GE power boiler business with the latter transaction expected to be consummated within In the next two quarters, turning to our under construction portfolio, JSW Energy is currently building 14 gigawatt of generation projects, all of which are fully tied up under long-term power purchase agreements. This high quality, fully contracted under construction book gives us a strong visibility into future EBITDA. This fiscal year, we are looking to add about 3 gigawatt capacity and a capex spent of around 20,000 crores for the year. On our thermal optionality at KSK, we expect the first 600 megawatt to be commissioned by quarter three of next fiscal. Beyond this, we have a robust project pipeline of approximately 4.6 gigawatt where letters of intent have been secured. Our total logged in capacity now stands at 32.1 gigawatt, placing us firmly on track to deliver the 30 gigawatt target of generation by 2030 under strategy 3.0. Coming to energy storage, we recognize the critical role it plays in integrating renewable energy and ensuring grid stability. Our logged in storage capacity now stands at 29.6 gigawatt hour, of which 3.2 gigawatt hour are in battery energy And 26.4 gigawatt-hour in the remunerative pump storage space. Further, our 5 gigawatt-hour battery assembly facility in Pune was commissioned in quarter four of FY26, and the commercial sales of the battery storage have already commenced. First, this plant will position us to meet domestic content requirements for battery energy storage systems as and when mandated by the Government of India. Energy storage is passed, becoming a mainstream infrastructure investment, and we are well ahead of the market in building this capability. Additionally, our green blade manufacturing facility at Halol in Gujarat, scheduled for commissioning in the first half of FY27, We will provide advantage to us in terms of lower capital costs for wind projects due to savings in logistic costs and foreign exchange, thereby strengthening our vertical integration. Coming to the operational performance for the quarter, we have added organic renewable capacity of 118 megawatt during the quarter. Our net generation for quarter 4 in FY26 rose by 48% year-on-year to 11.7 billion units. Thank you. is under permanent recovery. So, we are getting the tariff for the same, thus not impacting our revenue. Only a small portion of this curtailment has resulted in a revenue loss of around 16 crores during the quarter and approximately for 50 crores during the year gone by. This curtailment, however, is expected to be over by July 26, with the expected commissioning of new evacuation line. Thermal generation grew 43% year-on-year to 8.8 billion units, driven primarily by robust offtake at our Mahanadi and Utkal plants. Our KSK plants, PLF, for quarter 4 FY26 remained robust at 93%. Further, our overall thermal portfolio maintained a healthy PLF of 78% for the quarter and 73% for the full year. Compared to this, country's average thermal PLFs stood at 68.7% during the quarter and 65.8% during the full year. I would also like to address one operational nuance from the quarter. KSK Mahanadi experienced some PPA backdowns attributable to a transient demand softness in the region. However, we successfully monetized the backdown volumes through short-term market sales, mitigating any major revenue impact. This has since normalized with the onset of summer and the consequent surge in demand. The KSK plant in fact registered an impressive EBITDA of over 3,300 crores in FY26. Also driven by fuel cost reduction through optimizing sourcing of coal from nearby mines resulting in lower logistic costs, just like we did what we did for our Utkal plant as well. Further, at Utkal, both our units are fully operational, and the plant registered a PLF of 75% in quarter 4 of FY26. Now, driven by full tyre that we had done earlier, our Vijayanagar plant's PLF also stood robust at 79% in quarter 4. With open capacity now at about 5% of our total installed capacity, and a 25-year 400 MW PPA for the Utkal plant, At Rs 5.78 per unit and another 2-year PPA for 115 MW PPA with Asar Discom with effect from 1 April 2026, the quality of our underlying EBITDA has improved substantially. The predominant share of our remaining open capacity is domestic coal waste with plants closer to the mine, which reduces sensitivity to global coal prices volatility and keeps our merchant break-even economics highly competitive. Now, coming to the outlook, FY2027 is expected to be a year of accelerated earnings delivery. The sizable projects commissioned during FY26 will stabilize and contribute to full-year EBITDA, driving a meaningful step-up in our financial performance. India's power demand recovery, with the government projecting peak demand of 270 GW this summer And a medium-term CAGR of 5-6% provides a strong tailwind for our growing portfolio and remain fully on track towards our FY30 targets of 30 gigawatt of generation capacity and 40 gigawatt hour of energy storage. We remain committed to disciplined capital allocation. Every investment must meet our mid-teen return thresholds and our balance sheet management continues to be guided by our leveraged guardrails. While net debt has risen as expected during this phase of accelerated investment, the quality and our contracts on our growing asset base means that pre-cage generation will improve progressively, supporting, deleveraging on a path towards our 2030 net debt to EBITDA target of approximately five to five and a half times. Finally, and equally important, on the people front, we are proud to retain our Great Place to Work certification, a recognition that our culture and people practices continue to keep pace with our growing scale. Also, we have been rated amongst top 525 places in the manufacturing sector in the country. Moving to our financial performance for the quarter, details that most of you have had the opportunity to review ahead of this call. Supported by our robust quarter fourth generation growth of 48%, our EBITDA during the quarter rose 72% year-on-year to 2,602 crores, resulting in an all-time high annual EBITDA for the company during FY26. On the bottom line, our profit after tax came in at 574 crores, up 38% year-on-year, and pack-to-share holders stood at 372 crores. As you may know, we have already served a notice to exercise our call option in KSK Mahanadi to acquire the balanced 26% stake. The minority outflow should materially reduce once we consummate the same. Further, our cash profit to the shareholders for the quarter remains robust at 699 crores. Our cash returns on net worth adjusted for our investment in JSW Steel shares remain strong at approximately 18%. Revenue for the quarter 4 FY26 grew 39% year-on-year to approximately 4851 crores, a trajectory firmly anchored in the robust expansion of our generation capacity. As our newer assets continue to be capitalized on the balance sheet, depreciation and interest costs have risen accordingly. Depreciation grew almost 1.7 times during the quarter four on a year-on-year basis, while interest costs increased approximately 2.4 times, both consistent with the scale of capital deployment underway. On the leverage, excluding capital work-in-progress related debt, our net debt to EBITDA stands at approximately 5.2 times, well within our financial guardrails. Our liquidity remains ample, with cash and cash equivalents in excess of 10,000 crores. Out of the 3,000 crore preferential allotment that we have done recently, 1,125 crores has been received in quarter four. On the cost of capital, consistent with our earlier guidance, our weighted average cost of debt declined by approximately 67 basis points year-on-year to 8.36% as of March 26. This reflects our healthy credit profile and the sustained confidence our lenders and rating agencies placed in us. Finally, on working capital, total receivables, as on March 31st, stood at around 3,240 crores, translating to debtor days of 62, a sharp and meaningful improvement from 76 days in the corresponding quarter of the prior fiscal. This reflects both improved collection disciplines and the evolving counterparty profile of our portfolio. The central message is that significant capacity additions we have executed over the past several quarters are now visibly converting into higher generation volumes and stronger cash flows. We expect this momentum to build further through the remainder of the fiscal and into FY27. Thank you. And that concludes my opening remarks. And I am now happy to open the floor for questions. Thank you.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions, may please press star and one on the touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Yeah. Good evening, sir, and thanks for the opportunity. My first question is, sir, I think, what is the guidance for RE asset commissioning for FY27 and FY28? I think commission to do 3 giga to FY27. Is it possible to break down this between Vina and solar? And also give FY20 at number, possible?

You see, the thing is, FY27, as I have said, that approximately close to about 3 gigawatts of capacity emissions will happen, which will be a mix of solar, wind, and hybrid projects. So, the breakup between solar and wind depends on what kind of project, what kind of hybrid which is there. But as per the PPA terms, we can say that. But maybe you can say in terms of if I have to do a percentage, maybe out of 3 gigawatt, close to about 35 to 40 percent will be wind, rest all is solar.

The second question is, has the amount to be paid for minority acquisition for KSK Mahanadi? Is it crystallized? If yes, can you help us with the amount? Yeah, in the cheap capacity, please.

No, I think it's not crystallized. I think the process is currently on. We can't comment anything at this point in time. I think, but it is kind of probably by end of Q2 is what we'll have some number of.

Last question, sir. How are you thinking about PPA for KSK Mahanadi, the last unit? Is it likely to remain on the merchant?

See, the thing is that PPAs, definitely there are demands from different states which are there, and the discussions are on. Meeting with our timelines of commissioning of first unit and the balance two units, the discussions are on. Various states want the power. So, accordingly, as and when the PPA requirement comes, we will be definitely participating. But, however, to note that this being close to the mine and the low fuel cost also gives us a leverage to the merchant also. But in a longer term, we will prefer to be, our strategy is to have a long-term PPA for this.

Understood. Thank you and all the best. Thank you.

Thank you. The next question is from the line of Sumit Kishore from Access Capital. Please go ahead.

Good evening. Thanks for the opportunity. My first question is, on the 3 gigawatt that you're looking to commission in renewable in FY27, what would be the broad phase-out of commissioning of these capacities from Q1 to Q4, if you could give us some sense?

You see, the thing is that some of our projects, which are at advanced stage of commissioning, so we, of course, giving exact number will be difficult, but you can say that maybe it is uniformly divided between H1 and H2.

Okay, so one and a half, one and a half, roughly, okay. Second question is on CapEx. So, when you said about 200 billion rupees of CapEx, I mean, the free cash flow that you are generating right now, or basically your EBITDA, less your net interest cost and the tax adjustment, that seems to be enough to take care of the equity requirement for 20,000 crores of CapEx. So is there any thought process in terms of raising equity funds beyond the infusions that are coming through preference shares and the warrant issuances to promoters?

Okay. Pramakran will speak here.

Yeah, I think similar to what you understood is right, now with the existing 20,000, the cash flows would be generated, and with this kind of the net debt to kind of the net debt to EBITDA, I think within those ratios, we will be able to easily manage this 20,000 crores which we talked about. So, in case like we want to, so we have this additional 18 million crores of which we can kind of travel at any point in time. So, if you want to kind of postpone or fast track this one, we have this leverage to do it.

Okay. So, just one last question, trying to understand the broad breakup of this 20,000 crore capex, because there is some allocation that should start happening to the Salboni project. Something to the battery energy storage system project that you are commissioning, the pump storage hydro. So, I mean, just to understand, because what kind of CWIP should we expect, you know, for the thermal project, pump storage hydro by the end of the financial year?

You see, when you talk of thermal, definitely, yes, when Salvoni work has started and also the Pompisores project for which we have got the clearance from the environment and forest stage one clearance, definitely some investment will go in these projects. But we have to remember that normally the year one of such projects doesn't entail significantly large It is only the order placement and some kind of civil work which starts. So, it is a very small percentage of the payment which flows, and then gradually it increases. So, it is not significant, but if you want a breakup, it can be maybe 20,000 crores, we have said. You can say 4,000 to 5,000 crores will be for these projects, enabling projects, which are the thermal project and the pumping storage. Rest all will be in the wind and solar space and battery energy.

Very clear. Just one bookkeeping question to understand, what was the CWIP for your RE projects at the end of FY26? Because you are going to commission, see, what percentage of the investment has already happened, just to understand.

We have a total of about 17,300 crores of CWIP, out of which about close to 11,200 is for RE, and the balance is for the thermal and others.

Very clear. Thank you and wish you all the best.

Thank you. The next question is from the line of Ketan Jain from Evendus Talk. Please go ahead.

Thank you. Thank you for the opportunity. Sir, it's interesting to understand the 2.6 recall of capacity addition, how much of it is acquired from Ozu and how much of it is in the organic?

See, out of this 2.6 gigawatt, it is 1.3 gigawatt, which was the acquired capacity, and the rest all, it is 50-50. That is acquired, and the rest all is the greenfield capacity, which we have commissioned.

Understood. I understand that there were challenges this year. So, are you still seeing challenges to execute or commission plans on time for the start-up development?

See, the thing is, we have been all reading and all knowing about one of the biggest challenges has been the project readiness and the power evacuation, the grid curtailment, the delays, because if we know that last year, Government of India had planned for the evacuation networks increased by 15,000 circuit kilometers. The actual which happened was only 9,500 circuit kilometers. So those challenges we see that, but otherwise we are insulated because the challenges are whether the land availability or whether the connectivity. And we have that 100% of that, then only we start the work. So, we don't see, of course, RE projects, execution, day-to-day issues of right-of-way and others is something which is part of the project, which is planned and nothing unexpected. So, we don't see any challenges, and with large, significant portion of our capacity at advanced stage of commissioning, we are confident at this time that definitely 3 gigawatt of capacity addition will happen without any challenge.

I'm sure. Second question is, are we seeing any increase in cost of supply chain disruptions due to the relationship conflict and impact on our IRRs? Is there any impact?

See, one thing I would like to say is that if we talk of whatever the commodity cycle price increases we have seen in general and the currency impact on import-related components, for wind, as I have maintained earlier, that we signed a fixed price contract for 2.4 gigawatt of wind turbine supply from Sany Wind, China. Which is fixed in terms of the pricing, and fixed in terms of the currency also. Which we did in around April, March, April to 2024, we did that, signed that contract. And that contract quantities have, suppliers have recently started. So we are insulated from that for maybe next at least one and a half years on wind side. There is no impact to us. Of course, minor impacts on the domestic purchases, if the steel prices goes up, The tower cost goes up because that is all steel, but that is a very cyclic industry, steel. So we time our mine, bulk mine, accordingly when that is the best suited for us. So we are largely not impacted, even if there is a small impact, with the commissioning of our blade plant in India. That will further help us because of the huge reduction in the logistic costs, both in terms of the ocean freight from China and also the local logistic costs. So all those things put together, we remain insulated from any cost impact for next one and a half to two years. On solar front, with what we have been seeing, the increase in solar cell prices, the currency impact because of the solar imports from the cell imports from China. I like to say that even if the ALMM comes for solar cells also, for all PPAs what we are executing next two and a half years is all before the date on which we are allowed as per the regulation rule that cell imports from China will continue. So, to a large extent, we are insulated. Of course, the steel also is a cost, some portion of the cost on this. So, the same as we are doing for wind tower steel purchase, we are timing our purchase to have a minimal impact on our solar projects and our benchmark return IRRs or mid-team IRRs that remains protected.

Yes, sir. Thanks for your great answer. This is the last question. At the industry level, is there any update on the unsigned PPAs at the country level? Are things moving? Are things moving in that case?

No, right now we are not seeing because there are enough PPAs which are signed and which are to be executed for next two to three years time. And with the evacuation challenges which are there, which are going to ease out only by 2029. Not before that, we are not seeing any significant movement on the signing of the PPAs for the unsigned capacities. That status remains as it is what it was last time when we met.

Understood. Just to last, if I could squeeze in, what are the BSS pack prices right now, and does it impact our project acquisition? Just the last one.

See, BSS, can you repeat the question?

No, BSS pack prices, like the CAPEX for a BSS project.

See, the thing is, when we are insulating, definitely we have seen that there have been price increases which have happened. But as I told you that we are, we have been able to optimize our costs by starting the assembly plant within our facilities under JSW. So, whatever impact on cell pack prices are, we remain much more competitive as compared to the best imports which are coming, with our facility commissioned in Waterport.

Understood. What would be the pack price right now, sir?

It is varying. Again, if you are at Tier 1, Tier 2, very difficult to give a number. Tier 1, Tier 2, Tier 3 suppliers, whether it is a 3-year warranty, whether it is a 5-year warranty, it depends. So, very difficult to give a specific number.

Thank you. Thank you. I will get back to you.

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

Hi. Hi, sir. Thank you for the opportunity. Great. Sir, just sort of dwelling deeper into this 5 gigawatt hour best sent to pack assembly plant that we have operationalized. Can you provide some color on how are you thinking about the margin profile of this business? How much should be the revenue contribution that we start building in our models? And have we built any order book?

Yeah, you see, the thing is that this is in a ramp-up stage and will be taking care of my own captive requirements as well as, because once this capacity ramp-up and stabilization takes its own time, maybe going forward, definitely, the in-house requirement as well as to the outside market. We will be definitely looking for outside market. We have got some order, but right now the testing of the products are going on and the necessary approvals which we expect very soon, and then we will be going into the marketplace. So, then only we will be in a position to come out with what is the revenue and the financial numbers on this. Maybe next time we will definitely like to share on that.

Okay. And, sir, where are we importing ourselves from and which manufacturer in China?

There are multiple, but definitely we are concentrating only on Tier 1 suppliers, definitely, and we will be voting from them only.

Okay. And sir, on the renewable capacity addition target for FY28, if you can provide some guidance over there.

See, as we have said that, we have to reach 30 gigawatts by Fy30, and if we add maybe 3 gigawatts this year, so maybe 3 gigawatts, approximately from the RE front, you can say maybe about 3, 3.5 gigawatts, something is the number which definitely will continue to add.

So, sir, we would expect a sharp uptick and capacity addition in Fy29 and Fy30?

Yes, because what will happen is, beyond FY27, it is the thermal capacity also will contribute, which is the KSK, 1.8 gigawatt, 1800, and also by 30, partial capacity of Salvoni also commissioning is planned. So, all those things put together, thermal will also be a capacity which will be added in this.

Fair enough. Thank you so much, sir. I'll get back in the queue.

Thank you. A reminder to all the participants that you may please press star and want to ask questions at this time. The next question is from the line of Aniket Mittal from SBI Mutual Fund. Please go ahead.

Thank you. I joined the call a bit late, so apologies if any questions are repeated. But on Maitra, what's the reason for the increase in EBITDA this quarter on a YOY basis?

Yes, Prabhupada, actually, there is one of this quarter, like you must also be read in the Supreme Court gave an order on the generation-based incentive, right? And that is the pump, the increase which you have been able to see.

What is this number?

It is 50 paisa per unit, is what the generation-based incentive, and it is in excess of 200 crores.

Yeah, 210 crores, yeah.

So this is a one-off, so this includes certain past recoveries, is it?

Yeah, that's right, yes, yes. And for now going forward, which was not being given, every year we will be getting the generation-based incentive based on this order, which was not being given earlier.

Got that, got that. And for a commissioned wind and solar portfolio, Which is almost 6 gigawatt. What would be the annual steady state EBITDA?

Just, just, see, you can say that almost 75 lakh rupees megawatt is what you can take as the steady state EBITDA for full year capacity available.

I understand, I understand. And just to understand KSK, you know, if I recollect, I think next year, there's supposed to be a slight drop-off in the tariff at, at the UPPCL. So, you have obviously done a fairly good amount of EBITDA, but how does that move heading into FY27 and 28?

See, we have to remember two things. One is that in FY25 March when we acquired, the full year EBITDA that plant made from the operations was around 2,650 crores. Against that, we have made almost in excess of 3,300 crores this year. Of course, a lot of efficiency improvements in terms of the cost efficiencies improvement what we have done is one which will continue. Of course, there will be some impact because of the tariff reduction from UP. But a part of this will be compensated by maybe two, three steps what we have taken. One is that after the acquisition of the rail and water SPV, especially the rail one, the efficiency improvements and the cost reduction there also is going to And second is in terms of the fuel allocation, which we have optimized by sourcing majority of the fuel from the mine, which are closest to our plant and replacing the fuel, which was coming off from far off basis to fuel logistic cost reduction is one of the main drivers efficiency improvement during the last year. But during the year, we did a lot of steps we took in terms of operation and maintenance cost reduction. So those steps which have been taken during the year will also give us full year benefit in the current year, will help us to mitigate the reduction in the margins because of the UPPPA. So, but definitely it will continue to perform significantly better than what it was in FY25.

Anike, if I have to add, this is Vekash here, if I have to add, we have always said that please consider a steady state EBITDA of 2700. So the idea also is that please assume that a good year is what we are highlighting and the reasons for what we are highlighting. But viewing this fall in trajectory, we have said that please assume 2700 as our base case

And with the steps we are taking, we are confident that we will be delivering better than the steady-state EBITDA, what Vikas just said, of 2,700 crores, we can say.

That is very helpful. I just have one last question. So, when I look at the standard entity, the overall debt over there is almost 15,000 crores there. So, a lot of old-co debt coming over there. Just to understand, you know, how this is panning out from a maturity point, what's the maturity profile over here, what's the average interest rates at the whole call level?

At the whole call level, so basically out of this, some of them are kind of the short term, which will kind of, because some of the acquisitions that we have done, right, in terms of the KSK, Raheel, and Gaum, so these are kind of, some of them are temporary, this one. So, once we take over these assets, we will kind of refinance it through the major entity or the actual entity which we do. So, in terms of, if you look at it from an overall perspective, I think all of them are close to more than kind of 3 years, except for about close to 4,500 crores, which is in the form of short form. The others are all long-term.

And what would be the average interest rate right now, the whole collapse for these steps?

We are at about close to 8.2 is what we'll have, but as a whole consolidated, we are at about 8.36.

See, Anik, to add to what we just said, you know, we would like to have a project finance-based financing, which means that from maturity, the maturity as long as possible for borrowing. Now, old school level, like you mentioned, is obviously short tenors, and for us, the overall cost of debt is about 8.36, including working capital, right? So, what we are saying is that obviously the short tenor borrowings are there, and they will be obviously at a lower cost, but overall, if you look at the interest rate trajectory, it has come lower.

Understood. Those were my questions. Thank you.

Thank you. The next question is from the line of Nikhil Neganiya from Bernstein. Please go ahead.

Hi, thanks. Thanks for taking my question. I have two questions. Number one was any plans to set up a merchant battery energy storage plant?

See, right now we are in the process of executing the battery energy project for which we have signed the PPA. But going forward, wherever we have the solar capacity and keeping in mind how the evening peak demand shifts up, we will definitely keep exploring. But immediately in the current year, if you ask, we will be focusing on our projects under the PPA. But going forward, we will keep exploring that merchant option for especially where we have the connectivity, we have the solar plants, coupling the same connectivity for the evening peaks is one option which the team is working on. We keep evaluating.

Understood. But what I understand from your peers is some of them are pre-poning the battery part of a PPA to use it in the merchant in the interior until the PPA starts. Would you have any such plans like that to pre-pone your battery for the solar?

See, when I compare with what others are doing, see, we, if you see that we don't have any merchant or open capacity in our solar portfolio. All is tied up, whatever is commissioned, and what we are doing is also, and today we see that there are curtailments happening for, especially the capacities which are open, untied merchant capacities in solar are facing a very high curtailment is what we are seeing. So that is where it's a sunk cost as per me. So putting a battery, using that power which is getting curtained, charging the battery and using the evening peak option is something maybe others may be thinking on. But I feel that this curtailment issue is a matter of three to four years. Whether for a long term I can do the investment on the basis of this principle somehow doesn't fall in our scheme of things. Because we look for at least a battery life of 12 years, and based on that, if the returns are protected, is a better option, rather than going immediately, only temporarily, for us. So, for us, it will be, because we don't have any open capacities in solar, so we are evaluating by setting up, charging the batteries by solar and evening peak, once that model is financially, definitely giving my benchmark returns, then only we'll be moving ahead.

Understood. Appreciate your response. The other question I had was on the DSM regulation. In case it is implemented as per the CRC document says, and given you have a good quantum of wind as well in your portfolio, what is the impact you envisage on your finances?

See, with this new DSM regulations, we expect a total impact which we have budgeted in our plan is between 1.5% to 2%.

Yes, yes, yes.

Which was not zero, mind it. It was not zero earlier also. It will move up to 1.5 to 2%. It used to be there today also, but now it will be slightly more.

And would it be fair to assume as that X factor in the DSM rule changes by 2030, this number goes up further?

You see, the thing is, now when it is known that this is going to happen, everyone now is going to be designing the project, building the project, the tariff building, everything, the discovery will be accordingly. So, that is definitely, but yes, the tariffs have already been discovered, the project being executed, definitely this is going to impact, but there are options and tools available to minimize this. One of the things which is being talked of is that at a particular substation, grouping all the maybe other producers who are in the same substation at a group level to see, to do the settlement rather than individually. Because someone may be at a particular moment accessed, someone may be down. So, it is more from the grid point of view this is being done, grid stability. So, we are absolutely certain industry has made the representation. At a group level, this will be assessed, not at an individual level is what we are confident of.

Got it. I appreciate your answers. Those are my questions. Thank you so much. Thank you.

Thank you. The next question is from the line of Abhishek Nigam from Motilal Oswal Financial Services. Please go ahead.

Yeah, hi. Thank you so much for the opportunity. So, just two questions. One, these Andhra-based, Andhra generation-based incentives, is that included in other income? So that's my first question.

Yeah, I think certain of it is part of revenue, and certain of it is, so I think you can say about 100-100 crores is, one is part of revenue, the other 100 is part of other income.

Okay, okay. So I think the increase in other income is because of, I mean, there is some other reason for that, for that. That is one. And second, on the deferred tax asset, if you can, you know, give us some clarity. I think we've seen in the past also one of the quarters and, you know, going forward also, could there be more such tax creation?

Yeah, I think the deferred tax asset is primarily on account of two things. One is that if you see that Utkall, where actually we had a certain unabsorbed depreciation and business losses which were there, now with the PPAs being signed for the entire capacity, there is visibility in terms of recoverability of these tax losses. And that is why this year when we signed the PPA and we said that we will be able to kind of reorganize this defer tax. So this is a one-off, I think mostly in both, Utkal is the major one, the second one is in the KSK. The second one is in terms of, because currently with the new tax regime, because every new kind of transition to the new tax regime, the current tax would be similar to what it was like 17 to 18 percent, because you will have to adjust 25 percent of the math credit available. So, I think going forward, that will be the, this one, I think we'll be inching close to the effective tax rate of 23, 24 percent, basically, going forward.

Okay. Okay. That's it for me. Thank you so much.

Thank you. The next question is from the line of Satyadik Jain from Ambit Capital. Please go ahead.

Hi, thank you. The first question is on the RE commissioning. You talked about 3G about this year. How much would be CTU? How much would be STU? And generally, are you seeing maybe faster commissioning for STU versus CTU? And do you expect some changes there this year?

You see, whatever we are commissioning, it's a mix again of CTU and STU, and also the CNI customers also, and the group captive. So, connectivity is available for whatever we are planning, whether it is STU or CTU. So, it doesn't make any difference whether it is STU or STU, which one has happened earlier. And as I said that, this time, as compared to the previous year, in H1, we will be seeing almost close to 50% of the capacity coming up, which means that the project is at an advanced stage, connectivity is available. So, we don't see, this doesn't make any difference whether it is a CTU and STU. It's a mix of CTU and STU projects. And also, as I told you, just look captive also.

And secondly, just on the return profile for REI, I'm sorry if I missed it, what kind of containment do you build in the projects when you bid for a project for long term? And when you mentioned DSM, just clarifying, you mentioned about 2% revenue rate. Is that fact X is equal And assuming, is it assuming group, grouping at the substation or is it without grouping at the substation?

See, one thing is curtailment. I will just like to bifurcate into two. One is that a significant portion of our capacity is under group captive, which is upgrade. So, I am insulated from the curtailment on those capacities, which are almost a gigawatt of capacity, which is operational. And further, we are going to add in the current year also. And next two years, three years, we will be continuing to add off-grid group captive capacities. So, there we are insulated from this DSM regulations. In addition to that, next question.

The question was, when you look at, when you calculate DSM?

Yes.

When you calculate DSM, when you set, like 2-2.5% of revenue rate is that, when you consider X is equal to 0, and assuming grouping, or is this without grouping? Any substitution?

So, Mr. Natasha, sorry, I interviewed. You know, what we were saying is that is the worst case scenario that we've been seeing, considering what has been announced as of now. If there is grouping, obviously everyone benefits and we benefit out of it.

And what we see is not as two, two and a half what we said. It is one and a half to two, is what I said. And also, it is not zero today, that we don't have to make it from zero to one and a half. There is some which is there also. So, it has become stricter now. So, it is without grouping is what I have said. After that, we expect that things can improve, but with grouping, this will reduce. Fair.

Just one more, if I can squeeze on pump storage. You mentioned 2030 for one and 2031 for another. Do you expect groundbreaking this year? And then what is the typical construction timeline you're looking at for these DSP projects?

See, normally for pump storage projects, we see that from the zero day, maybe 36 months. And as I told maybe in my opening book, we have got the forest stage one clearance just two days back, and work in the non-forest area has already started. The contracts have been awarded, the electromechanical ordering has already been placed. So we are confident that that will be in time. This will be 36 months, you can say. Okay. Thank you so much.

Thank you. Ladies and gentlemen, due to paucity of time, we will request all the participants to kindly limit their questions to only one. We'll take the next question from the line of Mohit Pandey from Citi. Please go ahead.

Yeah, good evening, sir. Is it possible to give any color on our merchandise in April and May so far?

Yeah. 20% premium, we are continuing to sell even in the current quarter.

Okay, sir. Sir, and are there any risks to the performance of our Hydel portfolio due to possible LNNO?

No, we don't see that. The reason is that if you see when the temperature increases, right now when we have been seeing onset of summers and the temperature increasing, We are seeing because snow melting was slightly lower last year, but now with the good snow melting, the river flow is better, and with the power, what is required, even if there is, in past also, data clearly shows that even if there is 6, 7 percent, 8 percent below normal monsoons, the water flow required to run at full capacity and to go as per the design energy is sufficient. So, we have reviewed and we have evaluated this and we are absolutely certain that we don't see any significant impact on our hydro operations because of this weather impact.

So, just to add, there are broadly two ways. One is obviously snowmelt, the other is rainfall. So, like Sir, was saying that last time the rainfall was there. This time there will be snowmelt if there is, like you said, going to be higher heat. Therefore, for run of the

The next question is from the line of Atul Tiwari from JP Morgan. Please go ahead.

Yeah, sir. Will it be possible to at least qualitatively share how much was of KSK's 930-odd crore rupees of bidda was due to merchant in the quarter?

So, what we'll see, maybe we'll divide and we'll come back. My IR team will definitely get back to you and we'll give you the number.

Okay. And so, broadly speaking, I mean, obviously, your PAD has been held by deferred tax creation.

Sorry to interrupt you. Mr. Tiwari, I would request you to kindly limit to only one question, please. There are other who are waiting for this. Thank you so much, sir. We'll take the next question from Rajesh Majumdar from 361 Kapiti. Please go ahead.

Yeah, sir. Thanks for the opportunity. Sir, you are talking about additions of roughly 2.53 gigawatts per annum, as I understand. And if you see that pipeline for next year, FY27, it consists of other than group captive, GUVNL, then two or three transfers of SECI, and I think SJVN, if I'm not mistaken. Do you see any kind of delays in these projects, any of these which can happen or which the install capacity is like falling short of our targets?

See, the thing is, what you have pointed out is very, very correct. We definitely see the delay in this because we have deliberately delayed the execution investment in these projects Because the availability of the allotted connectivity is getting delayed. So we are aligning our investment in commissioning with the commissioning of the evacuation. We don't want to invest, make the asset ready, and then wait that are not able to commission because of this curtailment issues and the connectivity issues. So, we are particular, we are insulated from any kind of penalties or anything because of the delays. So, we are absolutely certain, yes.

So, I mean, I missed it out probably earlier. Did you reduce your earlier increase of 2.5 to 3 gigawatts? No, you still maintain that based on these orders that we have, which is a lot SECI, you know, heavy.

Can you repeat the question, Mr. Bidman?

I said the addition for this year is about 3 gigawatts, which includes a substantial amount of SECI orders. Do you see any delay in this kind of addition for FY27, which will get postponed to next year?

No, no, we don't see at all. As I said earlier also, we are absolutely certain, because the challenges for which the projects have been getting delayed are not there in terms of connectivity, In terms of land availability, in terms of execution, the various stages the projects are. So, we are certain that the current 3 gigawatts in the current year, we are absolutely certain that this will be there.

Okay, just one follow-up question, sir.

Sir, I am sorry to interrupt you. I am so sorry to interrupt you. Sir, there are others who are here. Thank you so much, sir. We will take the next question from Nikhil from UTI Mutual Fund. Please go ahead.

Yeah, just one question. So, what has been the impact of curtailment on our EBITDA, if you can quantify that, in terms of rookies cross or something?

Yeah, as I told in my opening remarks also, during the quarter, as I told you, the curtailment was not significant because a portion of the curtailment was under permanent grid network access, connectivity. So, I have my plant was available, the power was offered, but couldn't flow. So, I have been getting the tariff for that. Some portion which was under temporary grid network access because of the delay in the connectivity, permanent connectivity execution. So, we have, there has been a loss of around 15 crores during the quarter, and full year approximately 50 crores, the impact. And it is in two of our assets in the state of Rajasthan, and where this evacuation capacity is getting commissioned, maybe sometime in July. So, we expect after this, this will not be there.

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you.

Yeah, before I close, maybe Aptul from J.P. Morgan asked for what was the merchant EBITDA on Mahanadi. During the quarter, the EBITDA from the merchant sale was 203 crores. I just wanted to give that number.

Thank you, sir.

Thank you, everyone, and thanks for being with us, and maybe we hope to meet you all very soon again. Thank you.

Thank you, members of the management. On behalf of PL Capital, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.