NAVA LIMITED (NAVA) August 14, 2026 Conference Transcript

Ladies and gentlemen, good day and welcome to the NAWA Limited Q1FI27 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shubham Burade. Thank you, and over to you.

Thank you, Ananya. Good afternoon to all on behalf of ICICI Securities. I welcome you all to the Q1 FY27 Earnings Call of Nawa Limited. Today, we have with us from the management, Mr. Ashwin Devineni, managing director and CEO, Mr. G. R. Keperser, executive director, Mr. Nikhil Devineni, executive director, Mr. B. Srinivas Rao, EFO, and Mr. B. S. M. Raju, company secretary. We will begin with the opening remarks from the management, which will be followed by a Q&A. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining us. I am pleased to share Navad's performance for the first quarter of FI27. We have started the year on a strong note with consolidated total income reaching an all-time quarterly high of Rs. 1,269 crore. The quarter reflects the strength of a diversified portfolio and the benefits of disciplined cost management. Our energy and mining business delivered healthy operating performance with MEL's 300-megawatt plant operating at a strong 89.3 PLS. Our international foray also continued to provide value through dividend flows and to attain financial strength to pursue investments. At the standalone level, the total income reached a record Rs. 689 crore. Lower coal and manufacturing costs from Nava Global supported this improvement. We continue to make measured progress on our next phase of growth in the energy and commercial agriculture segments. Our thermal energy, renewable energy, avocado, and sugar projects in Zambia are in active implementation, and some are set to yield revenue shortly, expected to commence operations next year. We are later than originally envisaged, going to certain challenges beyond our control, with no material impact on project capex. It is, however, heartening that the 100-megawatt solar power project, set to be commissioned shortly, would establish a new niche for NAVA, prompting further investments in this space. We are cognizant of the significant challenges arising from the geopolitical and supply chain disruptions and are taking appropriate remedial actions. Diversified portfolio, financial strength, and operational resilience should, however, position us well to navigate these challenges while remaining focused on long-term value creation. We have been the call for many political parties' changes since we started.

Thanks for that, sir.

Ladies and gentlemen, please press star and 1 to ask a question. Participants who wish to ask a question, please press star and 1. The next question is from the line of Wanch, an individual investor. Please go ahead. The next question is from the line of Sri Gopal Kankali. Please go ahead. This is the follow-up question.

Good afternoon, sir. Sir, my question is, because there was some problem in connection, I could not hear your last five minutes' speech. I just wanted to know what is the expected date of commissioning of this 300 MW thermal, because...

Mr. Shree Gopal, you've been unmuted. Please go ahead.

Are you... I am speaking, madam.

Can you hear me?

Hello?

Mr. Shree Gopal, please go ahead.

Are you able to hear me? Hello?

The current participant has been disconnected. We will move on to the next. The next question is from the line of Vijay, who is an individual investor. Please go ahead.

Hello. First of all, may I know if I'm audible? I've got disconnected several times.

Yes. Yes, you're audible, sir. Please go ahead.

Yeah. I do not hear anything from the other side. Yeah. My first question is regarding the company's assets, how they are taken into the books. We have 65 acres of land in Hezabud, we have some 200 acres in Samarkot, and another 20 acres in Kavavaram, I believe, or maybe the other way around. How are these assets taken in the books?

Mr. Vijay, can you hear us?

Now I can hear you. I don't know this conference call has been jinxed. I tried three or four times to get into it.

Right? Did you hear the entire questions and answers?

Yeah, now I can hear you very clearly. Can I ask my question again or you heard it?

No, no, no. We just wanted to make sure we are audible.

So, with regard to your question, like all this land is recorded in the book set, like historical cost.

So, you have got these real estate assets, the land assets, the land bank, recorded at historical price. What is the reason why they are not being revalued and taken at current value, current market price, or at least the current realistic cost? Because that will change your book value considerably, the book value per share. The big book value per share is very much decreased.

Yes.

The accounting standard allows us to carry actually historical cost. That is why we are carrying historical cost.

I see. And what are the management's plans to make these work, make these assets work to the benefit of the company and the shareholders?

I think, you know, we've been holding these assets for a while, and I think the fruits of that are kind of showing with valuations, you know, really going up. It's good that we did not sell these assets at an earlier stage. Otherwise, we wouldn't have, you know, wouldn't be realizing the greater valuations. But what we have done is just to understand what opportunities we have today, we have engaged a third party, study, investigate with the current asset values, what are the possible options that are available for us in the event we want to do anything today. So that study is currently ongoing. Yes, I don't think we have We have an issue in terms of capital right now. All the projects that we are envisaging and that are currently underway are adequately funded, and we have enough equity and cash in our books to fund that. We don't need to sell the assets in distress to basically generate cash at this point. As a company, we feel that, and I think it has paid off, that we have held on to these assets. Yes, we have been saying that. But, for example, if we had sold these assets years ago, when we were being questioned about the assets, I don't think we would have realized the appreciation of how they've gone up.

Very true, Mr. Ashwin. But if you had invested that asset value at that time into newer projects, The new projects would have also generated additional projects.

Once again, Mr. Vijay, I'd like to state that we are not, it's not a situation where we're not undertaking projects because we don't have cash. Whatever projects we deem fit, where we look at the risk and so on and that we want to undertake, we have adequate cash to fund our projects.

Thank you. My next question is about the holding of Zambia assets. Initially, Zambia project was created out of NAWA Limited profits, NAWA Limited funds. And subsequently, Nava Global seems to have taken over these assets, and they are now being shown as profits accruing to Nava Global, and Nava Global giving dividends, buying back its own shares from Nava Limited with that money, etc. So, who is the ultimate owner of the Zambia project, number one? And number two, is Nava Global, is there any plan for spinning it off the way the foreign projects are going and spinning it off or re-merging it and going in for an IPO?

So, first and foremost, with regards to the large assets, and I'm sure you're talking about the Mamba asset, it was always under Nava Global. The only difference was Nava Global was called Nava of Singapore in the past. It was not like it started with Nava and then we moved it to Nava Global or anything of that sort. So we always had Nava Global as the international asset holding company that we wanted to grow. Today, Nava Global has multiple assets. It's got the current Mamba power plant. It's got Mamba Solar Energy as a company. And they may be, and they have got the mine in the Ivory Coast. And there may be other international assets that could fall under it. So it does operate independently. The ultimate owner, yes, is Nava, because it owns 100% of Nava Global.

You are telling me that Nava Limited is the 100% ultimate owner, beneficial owner of Nava Global?

Yes, that's right.

Okay, I'll go back in the queue. I remain on the line, because I got disconnected several times.

Thank you. The next question is from the line of Kaushik Toshi from ICICI Securities. Please go ahead.

Yeah, thank you for the opportunity, sir. My first question is regarding the Zambia. How is the situation in Zambia currently? And due to West Asia crisis, do we have any power reception in Zambia?

Sorry, can you repeat the question? I think a little slowly.

Am I audible? Hello?

Yes, yes. Just go a little slow.

Yes, my first question is regarding the Zambia currently. How is the situation is there right now? And due to West Asia crisis, are we facing any power receptions? Do we have any power exceptions?

The situation is fine. Currently, there are no power disruptions.

And second question is, due to West Asia crisis, are we anticipating any increase in the supply of coal in Zambia?

In supply of coal in Zambia? Can you repeat the question?

Mr. Kaushik? Mr. Kaushik? Ladies and gentlemen, we will move on the next participant. Wanch, an individual investor, please go ahead.

Yeah, so one more question I had was the deferred tax expense that you have shown in the books. Like, is there any scope of stabilizing it or will the 160-200 crore per year mark will be always there as deferred tax expense? You are talking about at console level? Yeah, on the console level I am talking about. Last year it was 261 crore. And this quarter, we have again shown 40 CR. And the last quarter, it was 163 CR because of the Jambian and USD currency problem. So, like, what is the situation over there?

Now the Jamba, like Quatcha, USD, exchange reaches around 18 rupees as on 30th June. So it is stabilizing as on today. We don't, like, you never know what happens in the future, like it depends upon the prevailing exchange data as on the date of report.

So this, if the currency stabilizes, then this 40 grow will become again, like the next quarter will not be there, right?

Yes, it may get even reversed also.

Okay, it can get reversed. Okay. And moreover, like the previous question about the assets that you have, if I may know what is the current value of those assets?

Are you referring to?

The Hyderabad assets, the 200 acres that you have.

No, the historical cost of my current land is around party labs.

And what will be the current value of products?

I think, you know, that's something that the report that we have commissioned to the third party that I mentioned will possibly bring out. The value is moving. I think every call is moving, fortunately, upwards, too. So, it's appreciated a lot.

Yeah, but if we can get an idea, that will be great for shareholders.

Yes, but I don't think, you know, we would want to speculate on giving a number, because it is a moving, this is real estate at the end of the day. Yeah, yeah, no issues, no issues.

And moreover, the mining that you were taking on the exploration part, what is the status on that?

So, there are two parts to it. I think you may be referring to the manganese mining or exploration.

Manganese and the lithium mining that you were exploring?

Yeah. So in terms of the lithium, it's a very large area, so the exploration is currently underway. There's been a slight slowdown because of the elections and so on, but the exploration is still underway. On the manganese too, it is a fairly large area. You're talking about 360 square kilometers, which is part of the concession. Out of this, we have done detailed exploration in only two square kilometers. Based on those results, I think the final phase three indications are that it does look promising. So we are currently working on converting the exploration license into an exploitation one.

So when can we expect that?

Mr. Wanch, I request you to join back in the queue, please.

Fine, fine.

Thank you. A reminder for all participants, please restrict your questions to two per participant. The next question is from the line of Shree Gopal Kankani from Aeshi Kankani & Associates. Please go ahead.

Good afternoon, sir. Sir, my question, because I was initially not participating in the discussion, because my line was disconnected for five minutes, so I couldn't hear your speech. I just wanted to know what is the expected date of commissioning of this 300 megawatt thermal power plant, because earlier it was, I think, planned for gen 27. So, what is now the expected date of commissioning of this plant?

So, right now, we are looking at the total commissioning of both the units by Q2 of FY27 and FY28, around the July timeframe.

Okay, sir. And my one question was that whether any plant shut down in the current quarter for Mamba plant, sir?

We have a biannual shutdown that is scheduled in the current quarter.

In the current quarter, okay.

Which is the biannual maintenance, basically. It's the regular biannual maintenance that we conduct.

Yes, that's fine, sir. Okay. Thank you, sir.

Thank you. The next question is from the line of Aditya Shreemar from PCS Securities. Please go ahead.

Yeah. My question is regarding the return on equity on the additional 300 megawatt that you have set on. So, and what would be the taxation as far as the 300 megawatt is going to be?

Give us a second.

My question was, because the cost entailed in this next 300 megawatt is much lesser than the earlier plan, And even the PPA is also signed. What is the expected return on equity on the investment? And what is the taxation that will be applicable on this?

Return on equity that we envisage is about 15%. With regards to the second phase, we currently don't have a tax holiday, But that is something that we are actively pursuing with the government.

Thank you. The next question is from the line of Sai Shriyas from Scientific Investing. Please go ahead.

Hi, sir. Am I audible? Thank you for the opportunity, sir. So my first question is, sir, can you please explain what is the reason behind Zambia energy EBITDA margin being declined over the years? And what is the sustainable margin going forward for the Zambian energy?

The reason for decreasing EV is on account of less rewards of ECL credits.

Okay. What is the sustainable margin going forward sir, for the Zambian energy segment?

Around like 45 to 50 percent is the EVET.

45 to 50 percent? Okay, and my second question is, sir, how do the intersegment eliminations work, and is there any ratio which we can use to estimate the consolidated EBITDA from segment EBITDA? Because there is a lot of intersegment eliminations.

So, we adapt some transfer pricing between power and metal sector in Indian operations, and also there, like, for coal consumed in energy from mines. Yes. So, this gets eliminated, the transfer price adapted for transfer is gets eliminated, and when it comes to consolidated EBITDA, it will be around between 35 to 40%.

So, the segment EBITDA 35 to 40% will be considered for the consolidated EBITDA?

Yes, consolidated, yes.

Okay. And one last question, sir. In the interest cost, how is the interest cost being calculated? Because are we capitalizing it during the construction time? And what is the industry practice? Because there is no big increase in the finance cost despite of having a higher loan.

So, the finance cost incurred on phase 2 gets capitalized.

Okay. Is this an industry practice? Is this an industry practice?

Yes. It is required by IAPARAS and India as well.

Okay. So, thank you. I will get back to the queue.

Thank you. The next question is from the line of Vijay, an individual investor. Please go ahead.

Yes, sorry. I might have missed some of your initial comments or initial answers because I was disconnected. The recent amendment which is made to the company's memorandum, the new clause about power generation which I introduced with new avenues of nuclear and solar, etc. Could you enlighten the shareholders about what are the company's plans for expanding its power generation operations in India in this particular field?

Yeah, so I think with regards, I'm just talking particularly with respect to India, because I'm going to be talking in general with India and internationally. We, as a company, are looking seriously at the renewable space. I mean, and not just solar, we're looking at solar, we're looking at wind, we're looking at a combination of both of them with battery storage. So you have round-the-clock power. So there are certain opportunities that we are currently investigating and assessing. And with regards to nuclear, I think the whole concept of the small modular reactor, which we term as SMRs now, seems to be gaining a lot of attraction. And given that we are in the power space, we have been also looking at that sector in terms of development. But I think the SMR space is very new, and it will take a little more time to evolve. But we are actively looking at all the developments that are taking place.

So all these activities are going to be international and not in India?

No, I don't think we're saying that we are international and not in India. Why are we looking at it in all geographies, including India? I think, Mr. Vijay, we are quite location agnostic. I think what we do look for is where the best returns for the risk that you're going to be taking come from. That could be very well in India or elsewhere.

I'm sorry if I have misrepresented, but what I meant was for a long time we have not expanded any of our Indian operations. So that's why I asked, because in India today, there's a lot of scope for these particular activities.

Yes, so we, I mean, like we said, we look at returns and we look at the risk. In the renewable space, although there's been a lot of expansion in India, sometimes it's been a hit or a miss, given the tariffs and the grid situation. So we look at the geographies, you know, without being partial to India or international, we're looking at the best returns and risk. And that's really played out well for us. If you look at Zambia today, it's generating good revenue and good profits, helping the growth of our company in various verticals.

The Zambia operation has been a runaway success. Coming to the every course of operation, when we are looking for manganese there, you are also stated that you are likely to put up a manganese alloy plant there. Is there any progress on that?

I think, with respect to the mine, we have disclosed that the exploration results have used the prompts and regards, so we are in the process of converting that into exploitation. But this particular mine that we have worked on is exclusively targeting the Indian operations. In order to set up a factory in Ivory Coast, there is another mine, which is right now controlled by the government, for which we are looking to be JV partners. That's still under the approval phase, but once that does come through, then we could evaluate setting it up there.

Thank you for the knock. So, I will go back in the queue if there is still time.

Thank you. The next question is from the line of Sai Shreyas from Scientific Investing. Please go ahead.

Sir, does the reported OCF of NAWA Limited include 100% of Zambian cash flows or is it adjusted as per NAWA 65% share?

100%. 100% consolidation.

Sorry, sir?

100% consolidation.

Okay. And one last question is, sir, the metals business is struggling in terms of margin, and what is the outlook going forward for margins and sales growth going forward?

I think the metals business, as you know, is one of quarter-on-quarter cases, we have seen actually a slight improvement in terms of pricing. We are quite well ring-fenced against any volatilities because almost 70% of our production will be committed, either under long-term contracts or quarterly contracts. To answer your question, with respect to margins, we could probably either see stability in terms of where we are today, or it's not a slight increase. But I don't see a downward trend, at least until the end of the financial.

Okay. What about the sales, sir? Like, it is stagnant from last few years. That's the reason I'm asking.

Your question was not clear. Can you please come again?

Sir, I'm talking about the sales growth. What is the expected sales growth?

Sales.

Yeah, so I think this particular quarter, as we disclosed, the Orispa unit was under shutdown for long-term maintenance activities. That's the reason the sales numbers have slightly decreased. But anyhow, that is behind us now. We have resumed operations from Orispa as well.

Okay, so thank you.

Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing remarks. Over to you.

Thank you once again for joining us today and for your continued interest in Ava. We believe the resilience of our core businesses and the progress of our growth platforms position us well for sustainable long-term value creation. If you have any further questions or required additional information, please feel free to reach out to our investor relations team. Thank you and have a pleasure.

On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.