Conference Call Overview
• Date: June 14, 2023
• Participants: Senior management including CFO Mr. K.K. Bhatt and Company Secretary Mr. Shalin Patel
• Moderator: Mr. Bharat Jain from ICICI Securities
Financial Performance
• Q4 and FY 2022-23 Results:
• Revenue and profitability discussed; income deemed normal.
• Plant Load Factor (PLF) linked to profitability, but commercial availability prioritized.
• Insurance Claims:
• Estimated recoveries: INR 3-4 crores for material loss, INR 12 crores for profit loss.
Revenue Breakdown
• Thermal Division:
• Total sales: ₹1,082 crores.
• Renewable Division:
• Revenue: ₹266 crores, EBITDA: ₹231 crores.
Solar Project Development
• Khavda Solar Project:
• Capacity: 600 MW, expected commercial production by November 2024.
• Total cost: ₹3,600 crores, competitive tariff of ₹2.73 per unit.
• Anticipated post-tax IRR: 12%.
Capital Expenditure Plans
• FY25 Investment:
• Expected: INR 2,200 to INR 3,300 crores.
• Current year capex: INR 300 to INR 400 crores.
• Funding Strategy:
• Total investment for solar park: INR 4,000 crores over two years.
• Funding mix: 30% equity, 70% debt.
Operational Insights
• Gas Plant Operations:
• Currently on hold due to gas price concerns.
• Lignite Generation:
• No plans for expansion; focus on maintenance.
• FY23 production target: 30 lakh metric tons.
EBITDA and Market Conditions
• EBITDA Figures:
• Renewable: INR 231 crores; Non-renewable: INR 269 crores.
• Gas Price Volatility:
• Monitoring impact on electricity production costs.
Tender Status
• 600 MW Plant Tenders:
• First tender for structural supply valued at INR 1,300 crores available.
• Second tender for PV modules expected next month.
Return on Investment
• IRR and ROE:
• Current IRR: 12%, with expectations of improved profitability over time.
• Challenges:
• Operational issues and wind velocity affecting revenue.
Management Confidence
• Strong supplier agreements and past project successes cited as confidence boosters for project timelines and profitability.