Good evening, everyone, welcome to the Q4 Earnings Call. We hope all of you and your family members are safe and sound and taking care of yourselves. This quarter has been very challenging for all of us, and we would like to thank all of you for the support that you have provided us during this period. Your support has motivated the company and our employees during this period to continue serving the nation. The company and its employees have contributed to various medical supplies, awareness drives, and volunteering, including telehelplines. Our COVID response efforts are ongoing across 63 locations, including all our thermal plants, all our distribution businesses, and all our renewable sites spread across various states.
As we reflect back on FY 2021, Tata Power is proud of the significant progress achieved on various strategic areas, and is confident of achieving the targets as we had laid out during our last interaction with investors in August last year. As informed to you, we have successfully completed the takeover of the fourth distribution license in Odisha, the Northern Distribution Company, effective 1st April 2021. With the acquisition of the Northern Distribution Company, our total consumer base has grown from 2.6 million as on end March 2020 to 12 million customers as of now. In line with our aspirations to grow in the distribution business, we have now become the largest private power distribution company in India in less than a year's time.
The progress in TPCODL, which is the central distribution company in Odisha, and which operates the erstwhile CESU license area, has been very encouraging, with the AT&C losses seeing a sharp decline within 10 months of operation, and is below 30% in a record 12-month period. In fact, from the time we took over from 1st of June, in the 10 months of operations, the AT&C losses has actually gone down to 25.5%. This has proved our execution capability in being able to achieve the targeted AT&C losses, and therefore create value for the customers in Odisha, including providing them reliable supply and customer services.
The beginning of the SouthCo and WestCo distribution companies in Odisha from 1st January has been very promising, and we are confident to write the same story in terms of better reliability, better quality service to the customer, as also improvement in the financial parameters and much better AT&C losses as we move forward. Cumulatively, all the three DISCOMs in the limited period of operation has been able to give profits against the originally planned losses for the first and second year of operation. We can definitely expect a more powerful performance in the coming years from Odisha. The focus on clean growth business areas are showing results, with robust performance from the renewable businesses. As a result, we achieved a stellar growth of 20% in PAT before exceptional items, which grew from 366 crores in Q4 last year to 440 crores in Q4 this year.
With this focused growth and deleveraging, we achieved 16% growth in FY 2021, to end the year with a PAT before exceptional items of 1,424 crores, up from 1,231 crores last year. Of course, the high coal prices in the last quarter have impacted CGPL, but the coal companies have benefited from the price increase. With a full-year saving of CGPL's interest cost of nearly 380 crores through the debt repayment which we did during the year, we expect CGPL will need very small support from Tata Power in the future. The increase in PAT was led by renewables cluster, which reported a 2x growth in PAT from 88 crores in Q4 last year to 175 crores this year. This growth has largely been driven by the performance in our focused areas in solar businesses, namely solar EPC, rooftops, and pumps, despite part of the year lost in COVID-19.
We clocked a 2.4 times growth in Tata Power Solar's annual revenue, growing from INR 2,141 crore last year to INR 5,119 crore this year. Our solar EPC orders continued a healthy growth, with orders worth INR 2,294 crore won in Q4, taking the total order book to INR 8,742 crores as on 31st March. Amongst various projects, we won 320 MW of solar project from NTPC valued at approximately INR 1,200 crores, and a 55 MW solar project from GSECL from Gujarat valued at approximately INR 230 crores, reaffirming the position that Tata Power Solar is the prime choice as a EPC contractor for large developers of projects. In rooftop solar business, we have seen a major uptick in orders and execution in this quarter. Our rooftop revenue in this quarter crossed INR 300 crores and order book stands over INR 600 crores as on date.
We installed 79 MW of rooftop solar in this quarter itself, and the total installation for the year reached 175 MW. We have seen very good response to our Solaroof digital campaign, which has created more than INR 5 crore digital impressions and given us more than 41,000 leads. We have also entered into a partnership with SIDBI to offer easy and affordable financing scheme to MSME customers in the rooftop solar segment. On solar pumps, our business sold 6,500 pumps in this quarter, recording its largest quarterly revenue and a total sales of around 13,000 pumps during the financial year. While one of the quarter was mostly lost in COVID-19, our teams have done remarkable job in achieving such large scale growth.
The expansion and doubling of capacities in the cell and module manufacturing plant at Bangalore will make our domestic content projects much more competitive and thereby allowing Tata Power Solar to grow its business further. With this stellar performance in these businesses, Tata Power Solar's revenue for this quarter increased five times from INR 579 crores last year to INR 2,777 crores in this quarter. Our renewable development portfolio has received LOA and signed PPA for 88 MW solar in last quarter, and we will have 1,314 MW of projects under implementation. With nearly 2,693 MW of operational wind and solar projects, our total portfolio with the existing orders with us will cross 4,000 MW. We have also won few more solar projects for which we are awaiting the LOA, post which we will inform the details.
We continue to improve the availability across our renewable assets, both for wind and solar, with several operational initiatives. This is reflected in the steady performance across the assets, with solar plants operating at 99%-100% availability, while wind sites are running above 98%. In addition to that, our overdues from DISCOMs have also consistently come down over the years and even when in a year there was stressed liquidity due to pandemic. The consolidated revenue for the fourth quarter stood at INR 10,255 crore compared to INR 6,881 crore previous year, mainly driven by the Odisha DISCOMs and increased order execution in large scale EPC projects, rooftop, and solar business. The sectoral tailwind and operational improvements are likely to continue to aid our various businesses, including the Odisha distribution circles and the solar EPC business.
Moving to the balance sheet, we have significantly reduced loans across entities, CGPL, Maithon, and Trust Energy. We reduced our net debt by more than INR 7,500 crores over the last one year through divestment of various assets and strategic fundraise from promoters. With refinancing of certain debt and the reduced interest regime around the globe, our average interest cost has also reduced to around 7.4% compared to 8.3% last year. Our debt to equity has sharply been brought down to a level of 1.4x from two times last year. Net debt to underlying EBITDA stood at 4.06x . The leaner balance sheet will give us the financial flexibility to pursue growth in strategic areas. In Prayagraj, we continue to see strong operational performance, achieving an 83% availability during the year.
With liquidation of close to INR 2,100 crore of dues from the state DISCOM, Prayagraj has been able to both prepay long-term loans as well as to distribute cash to its shareholders, thus becoming a win-win transaction for all stakeholders. This turnaround of Prayagraj has been excellent because of reporting of PAT of INR 185 crore in FY 2021 compared to loss in the previous year. Our stake in Resurgent, representing our share of Prayagraj's profit and interest on debt to Prayagraj, gave us a PAT of INR 100 crore in FY 2021 compared to a loss of INR 20 crore in the previous year. Our Microgrid venture also achieved remarkable progress, installing 33 microgrids during this quarter, taking our total installed numbers to 161, with another 40 under installation, covering total 200 villages and nearly 4,000 customers.
This venture is improving the lifestyle and promoting small scale industries in rural communities, which will be a big catalyst to the rural economy. We have launched last year installation of electric vehicle charging points at all important railway stations in Mumbai, as also in suburbs and adjoining MMRDA area in association with Central Railway and UN Environment Program. During this quarter, we installed 175 new public charging stations, taking the new network of public chargers to 456, the largest in the country. We have also installed 80 ultra-high capacity bus chargers in Mumbai and Ahmedabad. As you all are aware, we are continuously working to improve our ESG ratings, and we have been ranked number 13 amongst the top 200 Indian companies by Sustainalytics on various ESG parameters.
We recently bestowed this Best ESG Disclosure Award under the ESG category, Mid-Cap from the IR Society Investor Relations Award 2020, and recently with BSE and KPMG, is a proof that the market and you are appreciating the efforts being made in this space by Tata Power. We thank you once again for your invaluable votes. We aspire to take our ESG disclosure to much higher level, and in line with this goal, our teams have set up dedicated ESG portal to provide all relevant information at a single location. We are also working with institutions like SBTi to set up scientifically derived emission reduction goals, and in the near future, you will hear much more on our ESG efforts. The exit of defense business and the focus on cleaner sources of revenue will help Tata Power to further meet its ESG aspirations.
As you are aware, for more than one year, we have been working on evaluating options for monetizing our renewable assets with a view to reduce debt. While we did receive very good response from prospective investors, a few developments have happened during the last one year. The first is that we have managed to reduce our debt equity ratio to 1.4, which now puts us in a very strong position for future growth. Second is that we have exceeded our targets on building up our consumer-focused green business of rooftop solar pumps, and EV charging. The third is Tata Power has a leadership position amongst the Indian utilities and is amongst a handful of few global players to offer such comprehensive offerings of clean and green energy products and solutions ranging from solar manufacturing, EPC, rooftop solar pumps, EV charging, and micro-grids.
Tata Power is uniquely positioned to leverage on its deep sectoral and market experience to gain market share in these offerings. Based on very good feedback from investors and other stakeholders, that this wide and deep set of offerings makes very comprehensive renewable platform, which can eventually be valued significantly higher given the investor interest. In view of the above, we are working on a much bigger and wider renewable business growth during the coming year, which will open up far bigger opportunity to create shareholder value. We'll share with you our plans soon. We have invested in last one year in various building blocks, and these blocks have now started showing traction.
We are excited about the unlimited opportunities available to Tata Power to grow to a leadership position in the Indian utility space and look forward to your continued support in this remarkable journey. I have with me Mr. Ramesh Subramanyam, CFO, along with Mr. Kasturi, Chief of Treasury and Investor Relations, Mr. Anand Agarwal, the Financial Controller, and Rahul Shah from Investor Relations. I now hand over the call to the moderator for question- and- answer.
The first question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Good evening, sir, and thanks for the opportunity. My first question is regarding your update on the merger of CGPL and Tata Power Solar with parent. Where are we? The second question is in relation to your monetization plans for your renewable portfolio, either through the InvIT route, and now we are reading in media about potential plans to go for an IPO. Could you please elaborate on that as well? I will ask a couple more questions, but I'll wait for your answers first.
Yeah. Sumit, on the second question first, you asked about monetization. Mr. Sinha just mentioned we are working on that issue. As he said, we now find that during the last one year, a lot of improvements have taken place in the whole ESG space, and we are very bullish now t hat with the more than expected, I would say, progress in our wider greener green portfolio, we are now seriously looking at a much, much bigger value-creating opportunity than what we started with during last year.
Remember, when we started the InvIT journey, we had a high debt overhang, and also we are just contemplating on a set of non-core sales and capital raise. I think all those plans are very tentative and given COVID, that was a different scenario. We are now in a far, far better position having accomplished what we've done in the last 12 months. We are reviewing that situation and we'll come up with something which is really much, much bigger in terms of value creation. You'll have to wait.
CGPL, TPSSL merger.
CGPL, TPSSL merger. We are in NCLT, we got all the approvals in place. We are waiting for the courts to open. As you know, they are still, because of COVID, et cetera, functioning is affected. In due course, we expect the hearings to resume. We have all the requisite approvals in terms of shareholder approvals, regulatory approvals. This is in the last stages.
the hearings in NCLT are yet to
Yes.
Be accomplished. Okay. Third question is, very strong performance in Tata Power Solar Systems Limited. My compliments on that. Could you break up the revenue for the full-year, if possible, and since the quarter was so big, between EPC, rooftop solar, pumps, microgrid, EV charging, and maybe talk about the profitability in these verticals as they become more meaningful for you over the medium term.
If you see the presentation, it has the combined number. Okay? As you can see, we have given Tata Power Solar separately and Walwhan and TPREL separately as you can see. In one of the charts, also there is revenue detail. Right now, of course, these are all early-stage growth businesses, so we're not really talking about the bottom line right now. It's more important is to create the market and grow the market, and that we are doing successfully. I think that you're already getting, I think it's in slide 19, and followed by the break-up in slide 47, 48, 49, and also the consolidated view in slide 51. You may like to refer to that. Right now, of course, this is what really is the key that probably one should know.
Okay. to think of it in terms of EBITDA margin is still early for
Yes.
Say rooftop solar or solar pumps.
Yes. We are doing well. That's all I can say because these have to achieve scale. We are creating a good infrastructure to run these businesses. We have put that in place so when it scales up, you will slowly see the numbers for itself. Right now, of course, we are in growth mode.
Right. Finally, for CESU, where you took over operations in June 2020, what has been the cash burn after taking operations? Because I'm sure as the AT&C losses would have come down gradually, and you would have been below norms, to begin with. I mean, there would have been a cash loss, right?
See, contrary to what was perceived earlier, when we won the bid, thereafter, when we were finally handed over the company, there was a huge perception that we will burn cash, in this initially. Surprisingly, and I think the credit goes to our team, which is on the ground during the COVID, has done a remarkable job. we actually end up in this quarter, with just negative INR eight crores. I think it's been a phenomenal progress, considering that this is the first year. The first year was supposed to be the worst. we have gone through the first year very, very successfully, both on the network, technical, and consumer end. I think this story will only improve from here. insofar as the full-year is concerned, actually, we've ended up with INR 28 crores of positive PAT for the entire retail DISCOM .
In fact, if you see the slide 17, it shows that while the AT&C loss last year was 30%, when we took over, it was actually on 1st of June, and for nearly two months, there was no collection that had happened. Partial lockdown was there, and the AT&C losses were in the range of 40%, and we have ended the year with 29%. It's a phenomenal amount of improvement that has happened in one year or in 10 months that we took over. On a 10 months performance, we have something like 25% AT&C loss. It's a phenomenal improvement that has been done over there, not only in terms of loss reduction, but also in terms of reliability of service and customer services that is being provided.
Yes. Indeed, it's a phenomenal performance. Thank you so much for answering my questions. I'll join the queue.
Thank you. The next question is from the line of Swarnim Maheshwari from Edelweiss Securities. Please go ahead.
Yeah. Hello, sir. Good evening, and congratulations for good performance. Sir, couple of questions. First, now, sir, we were all waiting for the ramp up in the TPSSL, and indeed the ramp up happened. I think when you look at the EBITDA margins over there, that's just about a shade below seven%. I think the last time we had spoken on this was expected that because of the operating leverage, this would be a bit higher. Any specific reasons, despite that the ramp up in the revenues, the margins have not been lifted in the TPSSL side? That's my first question.
We had some pressure on the module front. This will ease off as we go through some of the past projects. We've had probably some pressure on the module front, but otherwise, I think we are well on track to deliver the next set of balance orders. You know that module prices have tightened all over the world.
Yeah. I do understand. Can you quantify the higher cost that has gone for the modules?
We don't give specific module-related details as such, so we would continue that practice. All we can say is that going forward, we believe there will be two things. The new orders will factor in the new prices, so that should take care of the margins, and some of the existing orders may undergo some headwinds until they are completed. It's a cycle, so at times we have had much higher EBITDA margins also. On an average, we should be back to a much higher level than what we achieved last year.
Got it. Sir, the second question was just a clarification. Now, in that slide number 17, when you had mentioned that the AT&C loss has reduced to 29.5%, but then there is a footnote which says that the AT&C losses is basically 25 and a half. This is the 25 and a half is the average losses for the 10 months. Is that a correct understanding, or what is it?
Correct.
Sir, then March 2021, or, say, when you look at that 29.5% loss which is there in that graph. that is the exit number for the March month. Is that fair?
It is a rolling average. It's a 12-month rolling average. That's how AT&C is calculated.
Okay. Got it. sir, just finally, so you have given enough dope on this renewable side on the InvIT or the IPO. I just wanted to understand one thing. have you actually shelved it completely, or you are reviewing the situation, and perhaps there is something better in the offering, that's why there is some sort of a delay? What is it exactly?
I think it goes without saying that unless something there is better than what we started off with the InvIT, we won't be spending so much time. Nothing is ruled out, by the way. Clearly, we are working on something which will have far better shareholder value creation than what could have been achieved by InvIT. Because remember, it was only one piece which was operational assets, which was on the take for the InvIT. Since, as Dr. Sinha mentioned, we've now grown far more confident of our wider portfolio. We believe that we can do something better than it. We are working on it, and sooner or later we will come up with what we believe is the best way forward.
Got it, sir. Thank you so much, and all the best.
Thank you.
Thank you. The next question is from the line of Vishal Biraia from Aviva Insurance. Please go ahead.
Hello. My question pertains to the integrated operations of CGPL and coal companies. On Slide 42, you've given the EBITDA and PAT. Could you also give the cash flows as to what has been the cash from operations on integrated basis and if any FCF was generated?
Do you have it ready here? Cash flow, you have the cash. Let me tell you that in terms of coal companies, the PAT is cash because there's very little depreciation there. We can give you separately coal cash numbers. I just want to add that in this quarter, one of the things that is increasing the deficit in CGPL is that the coal prices shot up in the last six months, and there is this CERC index, which kind of index is used for calculating tariff. This is based on the previous six months.
We are currently going also suffering due to the lag effect, that the lower coal price on the first half is being charged to revenue in the current quarter. The effect of the last six months increase, the coal prices will be reflected in the subsequent six months notification we will have probably the second half better than the first half of this year because of this lag. Because whenever there's a sharp rise it affects that particular quarter, and March quarter was one of them.
Great, sir. Thank you. I'll come back for more questions. Thank you.
Thank you. The next question is from the line of Atul Tiwari from Citi. Please go ahead.
Yes, sir. Sir, again, a question on this renewable InvIT or the potential InvIT. It is fair to assume that at least over the next six months to one year, we are not going to see any kind of, it's either a strategic sale or IPO, and the portfolio will be grown over a longer time to a much bigger scale, and then we will see some kind of capital action on that front.
No, I don't think we said any of that, which you mentioned. Neither we said that we're not going to do anything in the next six to 12 months. I don't think that's what we mean. I think it is in the works as to what is the best way to go about it. We are taking more time because we want to ensure that's the best thing for the company, and you will hear it as soon as we decide. It's not something which is going to take a year or two or three as you were probably suggesting. Yeah.
It will happen sooner than later.
Yeah.
It's very much in the works, and it will happen very quickly.
Okay, sir. Thanks a lot.
Thank you. The next question is from the line of Puneet from HSBC. Please go ahead.
Yes, thank you for the opportunity. Sorry to harp on this renewable thing again. Is the understanding correct that now the idea is to monetize not just the renewable asset, but to bundle it with some of the more exciting parts like microgrids, EV charging, et cetera?
No. The correct way to understand that is, the current InvIT proposal was only operational assets. Because of the important positive developments, A, that our desperation to get debt down is slightly less because of the good things that we've been able to do in the last one year on the balance sheet. I think we are far more confident now that let us look at not just that asset, but see whether there is a bigger opportunity here.
As I said, I think suffice to say at this point that we are looking at it more positively as to whether we can do something different or bigger. certainly, it is not clear. At this point, I can't tell you exactly that whether one business or the other will be part of it or not part of it certainly, we have a huge canvas to now choose from, given the fact that the other businesses have picked up very well, far better than what we expected.
Okay.
they also look to be on track to achieve far better growth in the coming years. that confidence is very different level now.
Yeah. Can you talk a bit about the business model that you now have on the EV charging and the microgrids?
We've been maintaining that the business model is evolving, and I think that you have to give some time for these businesses to mature to a level where you can call it as a fixed business model. Right now, it's evolving as we learn on the go, and as we are growing across the nation, we are also learning a lot on how to make this a profitable and scalable and modular in business.
Yes. On the EV, let me tell you that there are three components of EV. One is the home charging, where it's a very good business model. We have tied up with OEM partners, starting with Tata Motors and some of the other manufacturers. We are virtually 100% providing home charging facilities wherever they sell their electric vehicles. The second is the public charging, where we have already put nearly 500 public charging. These are not only in cities, they are in 100 cities, and they are also on highways. We have, again, big plans to scale this up, both for public charging as well as highways, and we'll be something like upward of 3,000 in next one year. The third is for fleet owners and bus charging.
Again, in three cities, we are putting it for the public transport. This is in Mumbai, in Ahmedabad, in Jaipur, where we are already working over there. Going forward, each one of them have very different business models. The fleet is a captive and whereby we have assured revenue model. The home charging is a captive where we have. The public charging is based on the type of penetration of electric vehicles that will happen. Considering that the type of ecosystem we are creating, w e will be the biggest players, and we will have a huge market as and when the penetration of electric vehicle increases and the usage of the EV charging systems increases.
On the microgrids, as Ramesh mentioned, that we have installed about 161 microgrids in different parts. Last one year, because of COVID, this was not the best of the time to launch the microgrids, but we have got very good success in many of the places. We are enhancing the capacity. This is an evolving area that we have. Of course, the other businesses I've already shared with you, whether it was for rooftop or it was for solar pumps, we have got very good traction, and this is going to grow multifold in the coming years.
Okay. My other question is there any progress on the sale of the other smaller entities which you're looking at, or is that also now shelved for the time being?
You mean the sale of the?
The other small assets that you have, Georgia, et cetera.
No, it's very actively going on. Of course, because of the COVID, et cetera, I think a lot of things are slowing down a bit, but there has been substantial progress otherwise. We hope to see this year, FY 2022, to close some of these ongoing sales initiatives.
Okay. Is it fair to assume that the CGPL settlement with the off-takers is now on the back burner as well because of COVID?
No, it's not a COVID issue. I think we have mentioned in the past calls also that the current formula which the off-takers have offered doesn't make sense for us. We have indicated, because they deviated quite a bit from the original ask, and therefore for us it doesn't make sense. If we are only bound by many conditions and without a corresponding relief, which we were seeking, it doesn't make sense. Certainly, we will continue to keep a watch, but right now, that's not acceptable to us in the current form. I think one of the speakers also asked about what is the combined cash position of coal and CGPL. The answer is, for the last year, it was about INR 450 crores. That is a cash positive, not burn.
Okay. That's all from my side. Thank you so much.
Thank you.
The next question is from the line of Aniket Mittal from Motilal Oswal Financial Services. Please go ahead.
Yeah. Thank you for the opportunity. Am I audible?
Yeah, I can hear you.
Okay. Sure. my first question was actually on the CGPL and Indonesian mines . I think the HBA prices have now crossed $80 per ton. Is there any impact that we're seeing because of the DMO regulation over there?
it's a bit unclear whether the DMO regulation, how they will apply, because already the industry is under pressure there. there's a lot of government is being approached for relief on that. theoretically, it is still applicable, but the industry is talking to the government on the various reliefs on this. we don't know where it'll end up. remember that this whole DMO obligation is, as you know, is 25% of the output to be sold to domestic markets. That's something which actually, only when the year goes through, then one starts to worry about that. Half the year, probably first half, there'll be no worries, but thereafter, if it is likely to fall short, et cetera, then that issue will come up. Right now, we're not very sure how that's going to pan out.
Okay. Just to get some clarity then. The HBA prices, let's say, at around USD 85 per ton now. I think the price ceiling at DMO would have been USD 70 per ton. Is that still applicable, and are you selling at 70?
No. The initial domestic sale will follow the rule, but the industry has been making a request for relaxation on that due to the fact that the industry went through a very bad time in the last three years. We are awaiting the result of that from the government. Otherwise, yes, it will apply.
Okay. That's clear. The other thing again on the KPC mines front, I see a decent amount of increase on the cost of production as well. I just want to understand, has there been any renegotiation of contracts happening, which has led to the rise in cost of production?
Many of the contracts, as you know, when the cycle of coal prices come down, they're negotiated, and then when the prices go up, they also go up. Okay? what you have to see is the gross profit per ton. that is the key thing because contractors also work along with the miners to adjust their pricing to ensure that everyone survives. fuel prices, higher prices, they all are also playing a part in this. Commodity prices generally have gone up. normally we see a cycle that when the prices are good, there's a little bit of relaxation on the input cost, but you should really look at the gross profit margin.
Understood. from a, let's say, a near-term or one-year perspective, this INR 35 per ton cost of production is something that we can assume to continue.
I must say that our mines are actually working hard to cut this down. Let's see how successful they are. There are various programs going on there to cut the production costs.
Okay. Sure. My second question is on the execution front. If I look at the order book that we have, firstly, on the EPC front, it will be around 8,600 crores on the solar EPC front, another 600 crores on the rooftop front. Could you just help me understand from an execution cycle perspective, when do we expect these orders to get completed? That is point number one. Secondly, from a developer perspective as well, we've got a 1,300 MW of renewable capacity. How would execution for that pan out?
In fact, the internal projects which are there within the company, some of them are going to be as early as the second quarter. Normally, none of these will exceed 18 months in general. They'll be 12 to 18 months, and we also will take advantage of appropriate timing on purchase of modules, et cetera, and expedite some projects even earlier. Currently, about 900 MW of our own captive projects are going on, out of which about 600 MW are likely to happen in the first half. A substantial commissioning is happening in the first half itself.
Yeah, exactly. That is what I wanted to understand. Because of, let's say, the BCD coming in next year, is there any additional risk you're accepting, let's say, within FY 2022 itself for these projects from an execution point?
Aniket, you're not very audible actually. Yeah. Can you just say that again?
Sure. Can you hear me now?
Yes.
Yeah. That was my point. I mean, given that I think the BCD is expected to come in next year, right? Is there any sort of increase in the execution cycle or the execution period that you're expecting? What I'm trying to understand is this 8,600 crores that we have on the solar EPC front and 600 crores on the rooftop front. Just from a timeline point of view, do we expect this to actually happen, let's say, within the next 15 months or so?
let me tell you that there are two types of projects. One is where we are using imported cells and modules, and the other is where we are using domestic cells and modules. Again, some of the orders of NTPC and public sector undertaking. those which are domestic, we have to use domestic, and we had shared with you that how we have expanded our capacity, and it has now become 1,100 MW of cell and module put together. those will happen based on the requirement of the customer.
We are, of course, targeting that most of these projects will get completed in this year. As Ramesh mentioned to you, there is nearly 900-1,000 MW of our own project development which is happening, and many of them will get commissioned within this first half year. We are expecting that most of the projects that we have, we'll be able to execute in this financial year. Whatever gets spilled over, we will try to see that in the early part of the next financial year they are implemented.
Okay. In terms of your projects in the development, the ones that you own, which is around 1.3 GW, how would the execution for that look like?
We said 900 out of that is going to be in the next six to nine months, and the balance would be somewhere in the end of this year. Yeah. End of early first quarter of next year. Yeah.
Sure. just carrying on that front, could you tell me what would your overall capital expenditure look like for FY 2022? if you could break that up for me for your different segments.
Yeah. We are expecting close to 8,000 crores of CapEx next year.
Sure. Could you break that up for me?
Depending on the execution and timing, it could be anywhere between INR 7,000 crore-INR 8,000 crore.
INR 7,000-8,000 crores of CapEx.
Yeah.
if you could break that up for me, let's say, how much of that would be related to renewable and how much of that would be, let's say, the Odisha distribution part and then the remaining regular distribution?
About half of that would be renewable, at least.
Half of that is renewable. How much would be the Odisha distribution, these four put together?
On the CapEx? Yeah. It's about INR 1,000 crores. Yeah. Odisha, all four DISCOM put together is about INR 1,000 crores.
1,000 crores. Okay. Probably, just this one last question, actually, on the Odisha DISCOM front. I see in one of your slides it is mentioned that there is certain amount of incentives that you earn on the collection of arrears for, I think, .
Yeah.
If you could just help me with that, what is the total arrears recovery over there, and how does this incentive actually work? Like, what is the incentive percentage you earn, and do you see this on a recurring basis coming through, let's say, FY 2022 as well?
Okay. All four put together, I don't have the ready number. We'll have it sent to you.
Okay. Just maybe one last bookkeeping question. If you could tell me what's the overall cash levels at your Odisha DISCOMs?
Overall?
The net cash at your Odisha DISCOM? What is the total net cash number at your Odisha DISCOM?
Net cash. Okay, Rahul will send you that detail.
Sure. Okay. Thank you.
Thank you. The next question is from the line of Anupam Goswami from B&K Securities. Please go ahead.
Hi, sir. Most of my questions have been answered now. Just last, on the CapEx part, sir, we were contemplating about 15,000 crores of CapEx target, and we have shown a visibility in the slide about 9,500 crores. How much of that has been incurred till now and approved? Also on the balance 5,600 crores, when the new kind of project will come and what kind of bidding are we expecting on that?
I just heard partially. Correctly, can you just repeat for me?
Yes, sure, sir.
Little louder.
Yes, sir. We were targeting a INR 15,000 crores CapEx, and we have showing in our slide number 16 that the visibility of INR 9,500 crores CapEx through regulatory orders. Now, my question is on how much CapEx we have already incurred and how much we are approved out of that. Also on the balance INR 5,600 crores, where do we see the new projects coming up on this?
The balance. You're talking about the balance. remember that in this list in distribution, we knew there are two, three possibilities. One is that we do expect a much higher number on the transmission in Mumbai. we also plan to grow further and acquire further new DISCOM. That could give us that balance. secondly, in Odisha, as we go along, if the requirement goes up, which is quite likely right now, it's a very conservative number, that is the other area where we could see an improvement.
Okay. sir, on this, how much we have incurred till now?
Sorry. Say that.
Sir, how much we have incurred till now and approved also?
Around INR 900 crores.
On the whole Odisha?
All the transmission, distribution.
The transmission, distribution, and Delhi. Just one minute, I'll give you the exact number.
Odisha.
Odisha is about INR 132 crores in the last year. Okay? Another INR 900 is the rest of the DISCOMs. It's about INR 1,000 crores-INR 1,100 crores. The proposals have been submitted. The order is awaited in this month. The hearing has been completed by OERC. We had given a certain number of CapEx that we will do in the first five years, so we will be complying to that requirement. Those numbers we will be able to share with you separately.
Okay, sir. I'll join back in this.
Thank you. The next question is from the line of Mohit Kumar from DAM Capital. Please go ahead.
Hello. Good evening, sir. Three questions, sir. AT&C losses had gone down to 25.5% in CESU. Is it primarily led by reduction in losses or increased collection for past arrears? That's my first question.
Both. remember that the previous arrears is a separate account which is to be kept for incentives, but otherwise it includes both collection as well as the actual technical loss reduction. the AT&C loss is a sum of billing efficiency and the collection efficiency. the sum total of all that makes the AT&C loss.
Second one, CGPL, sir. Are we still negotiating it or we have dropped the idea of getting any raise? Related question is that, the KPC concession contract, has it been extended?
KPC contract is under extension. The government has approved the rules for extension. There is some procedural clarity that is required for all the license renewals. We are not the only mine. That's relating to tax. Once that happens, then all the licenses which are due for renewal will come up. Ours is due at the end of this year. Before that, expectation is that issue will be sorted out by the government and the license will be renewed.
Thirdly, on the solar pump, are we expecting a massive jump in FY 2022, given that the CY 2022, there was a huge target of 1.75 lakh solar pump? Are we booking subsidy in the top line for solar pump? How much is that subsidy? Rough proportion.
Let me share with you that Government of India has a huge plan for solar pumps under KUSUM. From the present 300,000 pumps, they are talking of taking it to 385,000 by 2024. We are one of the biggest players in the solar pump area. Because of that, we are expecting that our growth in solar pump area will be very high and exponential, in fact, in next few years. There is no subsidy as such. There is a tender based allocation. Just collect the money and t he subsidy is paid by the government directly to us once we complete the work. The scheme under the government is that 30% is paid by the central government, 30% is paid by the state government, and 40% is paid by the consumer.
Okay. Understood, sir. Last question, if I may squeeze in, sir
it's a single bid that comes in, so someone like EESL or someone comes with a bid, and that money comes directly to us.
What we mentioned about the three sources is the back end of how t he fee is just get shared by the agencies. We have a single window here from the right.
Understood. Sir, last question, sir. Of course, we understand they're working on the new plan, on the deleveraging or let's say asset monetization. sir, what is the timeline you think where you'll be able to tell the market or tell us about the way forward?
All we can say is that we are trying to do that as early as possible. Right now, beyond that, we can't give you a date, but remember that we are very seriously working on this.
Okay. Understood, sir. Thank you, sir. Thank you and best of luck. Thank you.
Thank you.
Thank you. The next question is from the line, Rajesh Majumdar from B&K Securities. Please go ahead.
Hi. Good evening, sir, and thanks for taking my call. I had a question again on the CapEx, which was discussed a little while ago. This INR 15,000 crore CapEx excludes the FGD CapEx at Maithon?
Yeah. This is outside.
This is only transmission and distribution.
Transmission and distribution. The CapEx for Maithon, Mundra and some of the other Jojobera plants is outside that. That's a statutory requirement, and we need to do that CapEx over there.
Regulated CapEx.
Those are all regulated CapEx, and they will have the returns, which is determined by CERC.
this 5,600 does not include the transmission TBCB contract that we've been talking about. Is that included in this CapEx?
No.
Not included. We are fairly confident of this CapEx target being achieved.
Yes.
Okay. Fine. Secondly, my question was on your solar pumps. 12,928 is the number of pumps installed in FY 2021. How much of this came from the KUSUM scheme?
This is all under the KUSUM scheme.
Because as I understand, the total orders which were given in FY 2021 were about 52,000 odd, much lower than what was anticipated earlier.
That's from the state government.
Yeah. It is either under the KUSUM or there is a program of the state government. It's either under that program that it is done, but it's through the government's programs on solarization of pump sets in the villages.
This year's target on KUSUM, I believe is fairly aggressive. A figure of 4 lakh is being talked about. What is the realistic figure that we are looking at in terms of the orders to be given under the KUSUM scheme?
I think what you said is absolutely right. The government program is aggressive and so is our program. We don't give forward-looking numbers, but rest assured that we are also targeting a very aggressive growth.
Yeah. we are the biggest player in solar pumps.
Sir, just to harp a little bit more on this, what are our economics on the solar pumps business? Because see, we are actually assemblers who are outsourcing possibly maybe 60%-65% of our requirements other than the panel which we make. our margins will be significantly lower than the pump motor manufacturer. what is the economics in terms of the return on the assets or something which you can share with us? Because the margin profile would be lower than the integrated manufacturer of a pump motor assembler, right? If I'm not mistaken.
No. Let me share with you how we are looking at this business, and that's where our understanding on technology and efficiency is very important. We do a backward integration whereby we tie up with pump manufacturers and also work with them on designing of these pumps so that they are high efficiency pump sets, and they can be used, in some cases, exclusively manufactured for us along with the solar panels that we supply to them.
Our whole concept of supplying of solar pump is to provide an integrated service and also the back-end digital integration so that we give the information to the user, the farmer also, in terms of how the usage is there and how much he's generating and how much saving that they are getting. It's a very comprehensive solution that we provide, and we have very good margins when we carry out these works.
Do we look at EBITDA margins or return on capital in this business more? I mean
There is only working capital. There is no other fixed capital. The key is really how to churn the maximum sale with minimum investment, and cycle time therefore becomes very critical, both on collection, payments, installation, all this cycle is a key, and that's where we believe our edge is going to be.
Also the O&M is integral part. Since we do the O&M for five years, so that also gives us the edge of providing better quality service to the consumer.
Right. receivables is not a big issue because these projects are all more or less, the orders are placed when the funding is in place, right? As I understand, there's no delay in fees.
Yeah. There is a procedural aspect of it, which is where we believe that digitization of the whole process enables us to speed it and submit the bills, get the verifications done, et cetera. I think that those are also intricacies from a commercial side.
Okay. Thank you. Just one last bookkeeping question. This higher dividend income from Trust Energy in the standalone numbers, in Q4 of 2020, could you just give us some more details on that?
Okay. Rahul will explain you that. We'll just separately, he'll explain you that. It's a one-off thing.
Okay. Thank you.
Thank you. The next question is from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead.
Yeah. Thank you for the opportunity. A couple of questions. On the Delhi distribution side, my observation was that the average power purchase cost actually reduced to INR 6, shade under INR 6 from 6.5, which seems to be an excellent performance. If you could help us, what drove this? The regulation change which came where more than 25-year plans, where you can go out of the PPA and where you're paying fixed charges without drawing power, has that helped? That's something which is futuristic, which we can see going forward?
The difference between the previous year and this year was that in the previous year, there was a huge arrear payment that had happened to both the generating companies as well as the transmission company. That was not there in this year, and that is why the power purchase cost came down. As you know that CERC comes up with five-year regulations on tariff for transmission and generating companies, especially the CPSUs. The lag in issuing the order led to arrears that had to be paid in the previous year. This year there was nothing like that, and that is why the cost has come down. The benefit of 25 years and coming out of some PPAs with the 25 years period is expiring, that will come in the FY 2022.
Sure. Will that help in reducing the regulatory assets, the trend actually which going down has actually turned and it's been starting moving up?
Yeah. It will help in bringing down your overall cost and thereby reducing your net outflow. Apart from that, there has been also Government of India notifications through state regulators and state governments that no new regulatory asset has to be created and whatever has been created has to be amortized over a period of time as per the tariff policy. There is a lot of push now from Government of India also, as well as APTEL, that the regulatory assets needs to be amortized and it cannot keep on adding in future.
Sure. The second question is on the renewable side. Since you're disappointed to see only 10 MW incremental addition, we had a similar kind of a pipeline last year. What actually resulted in this low capacity addition? The aspiration of fourfold in five years has actually become in four years.
The delay in completion of some of the projects was because some of these panels that we had ordered, they came late. These were primarily planned for this year only. It was not that they were planned for last year. As Ramesh mentioned that many of these projects are in final stages of completion, and within first half you will find that large number of these capacities will get commissioned. These projects have a certain. It's not just setting up of the project, but also it has to be timed along with the evacuation arrangement. Some of the projects in Gujarat and other locations, the evacuation lines are expected in this month and next month, and then only these projects can be commissioned. The timing is very important with the evacuation arrangement.
We were to commission 600 MW odd in this quarter. that's because of the initial period of pandemic when projects came to a halt in the initial first four, five months. We had to push it to the next quarter and thereabout. that's why you see that last year we couldn't do a lot of essentially.
Okay. That's my next question. This last bit, if you could help us with the total receivables on both the TPREL and Walwhan.
Yeah. We'll be able to share that. There has been huge improvement in the collections from all DISCOMs notwithstanding the COVID. Excepting for Andhra where there's a litigation, rest of the places, the situation is very good.
Sure. Yeah. Thank you so much for taking my questions.
Thank you. The next question is from the line of Murtuza Arsiwalla from Kotak Securities. Before we take the next question, we would like to inform participants to please limit your questions to one per participant. Mr. Arsiwalla, you may go ahead, please.
Yeah. Thank you so much, sir. Just on, while several people have asked on the InvIT versus the larger opportunity in a potential renewable IPO, just wanted to check, would this just be of the development portfolio or it could also include Tata Power Solar? To that extent, is the Tata Power Solar merger contingent upon how the plans sort of work out? That's one part. The second is any target you could give outside of the renewable piece, any targets on disinvestment targets for FY 2022 from assets sale?
Yeah. On the InvIT, I want to just reiterate, I don't think we can say today anything like IPO and all of that word which you used. I think we are looking at the whole spectrum. Could be IPO, could not be IPO, could be InvIT, may not be InvIT. I think we are looking at the whole space on a whiteboard. As soon as we decide, I think it would come through anyway. Certainly, we're looking at all angles. The other question you asked is other targets. Yes, we are targeting over nearly INR 300 crore of divestment this year on various assets which are under process, and some collecting the balance receivables on the ones we have sold also. That's the other thing we will be chasing.
Sure. Thank you so much, sir.
Thank you.
Thank you. The next question is from the line of Abhineet Anand from Emkay Global. Please go ahead.
My question is, if you look into slide 51, it gives you the consolidated
Can you speak a little louder?
Sorry. Am I audible?
Yes.
If I look into the renewable piece, consolidated view for FY 2021, which is slide 51. We have done phenomenally well on the sales side, around 4,000 crores to, I think, around 6,000 crores. Both the EBITDA and PAT looks to be flat-ish on a YOY basis with debt almost 1,000 crore higher. Some of the pieces that you said are still evolving. Is it something that we are growing at the incremental growth is coming at a lower margin? That's what if you can explain.
See, I think that you'll have to appreciate that the additional capacity has been very minimal in this year. As soon as we hit the balance capacity, I think you will see a definite shift in numbers. I think the FY 2022 that way may be significantly better, because there's going to be a much higher capacity addition straightaway. Along with, of course, the fact that we had one of the worst wind years last year. These are cycles. We expect that the overall portfolio will deliver a much better result next year. Also remember that there's a good EPC pipeline also there. We expect the numbers to be improving in next years considerably. Yeah.
Shall we take the next question?
Yeah.
Okay. Thank you. Ladies and gentlemen, we'll take the last question from the line of Subhadip Mitra from JM Financial. Please go ahead.
Good evening, and thank you for the opportunity. A couple of questions from my side. Firstly, if it's possible to share the actual operational cash flow number that you're looking at in the various subsidiaries, and if you break up in terms of how much is coming from the areas, if that's possible to share?
The incentive on past recovery was about INR 40 crores last year.
Okay. What would be the operational cash flow number, if that's available?
As we said, the PAT was INR 28 crores for all put together. Cash flow, we will share with you separately.
Understood. Lastly, with regard to your targets in terms of the capacity addition on the solar front, even on the EPC side, you're looking at about two gigawatt of annual capacity additions. Given the current scenario where, at least what we hear is, there is a bit of a slowdown in terms of SECI tenders. The current pipeline for FY 2022 seems to be anywhere between three to four GW. Are you seeing some near-term speed breakers coming up maybe in FY 2022?
Yeah, we are definitely expecting. In fact, we have already started the year winning a 250 MW project in Maharashtra, and we are expecting bids in Maharashtra and in Madhya Pradesh and Gujarat and Rajasthan. We are expecting large number of bids to come. As per our assessment, there is nearly 10,000 MW of
Bids which are expected in next six months. We are also expecting a large number of bids also for hybrid solutions, which consist of both wind and also thermal and solar. I think there is a huge pipeline, and considering the ambitious plan that the country has, and also that the RPO obligations, many of the states are not able to meet, and the Electricity Act amendment, which is going to enforce it. We do expect that the pace will pick up once the COVID situation reduces a little bit.
Understood. Thanks. That's it from my side. Thank you.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Dr. Sinha for closing comments.
Thank you very much for the opportunity to interact with all the analysts and investors today in the call. I do expect that we will continue the conversation and discussion on this. In case any one of you have missed out any question or have further questions, please connect with my colleagues, Kasturi and Rahul, who will be able to provide you all the information that you require.
We have been improving in the quality of dissemination of information, and you would have seen in this time's presentation there has been a lot of details providing as well as also some of the initiatives that we have taken on ESG front. I do look forward for your feedback to improve the quality of presentation and the data that is being provided to you. Once again, thank you very much. Please take care. Stay safe. This is a tough phase. We'll all come out of it.
Thank you very much, sir.