Q3 20/21

Feb 4, 2021

Ladies and gentlemen, good day, and welcome to the Tata Power Q3 FY 'twenty one 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. Please note that this conference is being recorded. Today, we have Doctor. Praveer Sina, CEO and Managing Director, Tata Power and Mr. Ramesh Subramaniam, CFO, Tata Power with us on the call. I now hand the conference over to Doctor. Praveen Sera from Tata Power. Thank you, and over to you, Doctor. Sera. Thank you, and good evening, everyone, and welcome to the earnings call of Tata Power for Q3 results. I have with me Mr. Ramesh Subramaniam, CFO Mr. Anand Agrawal, Financial Controller Mr. Kasturi, Chief of investment relations, and mister Rahul Shah and Jyoti Bansal, and the other colleagues are here. We would like to, first of all, thank all of you for the continued support during the turbulent times and helping the company with the valuable feedback. We did announce our growth strategy that focused upon improvement in returns for the stakeholders. As we had laid out in our last analyst meet, the company has continued strongly to execute various strategic plans. And in this quarter, we delivered on many of these action plans. Since our last results, we have had several events, which reinforces our ability to realize the long term company strategy. Tata Power was awarded two additional distribution licenses in Odisha, SouthCo and Zesco, we which we took over from first January twenty twenty one. Since then, we have also been awarded the letter of intent for the last distribution license in Odisha de NESCO, and we are working on its takeover process. With these licenses, Tata Power has grown from consumer base of 2,700,000 to about 12,000,000 in less than a year's time. The proposed budget provision to allow multiple discounts in a circle is a welcome move and which will allow and give the opportunity for the company to expand its state of the art distribution processes and practices to other regions and facilitate transition to healthy distribution operations. During this quarter, the completion of this defense sale transaction took place at a value of INR $10.76 crores, and Tata Power has received cash of INR $5.39 crores net of the debt of SED. Similarly, in this quarter, our solar EPC order book continued to grow and at the end of Q3 was around INR 8,700 crores. In addition, we have won orders worth 1,869 crores in January itself, and our order book at present is more than 10,000 crores. Majority of the work for the 300 megawatt expansion of manufacturing line at Bangalore has been completed, and we expect to open this plant by end of this month. Our manufacturing capacity for both cell and modules will double to nearly 600 megawatts each. Our renewable development portfolio won a bid of 110 megawatt solar in January. With another three seventy megawatt of project awaiting letter of award, our total renewable portfolio will grow to around 4.4 gigawatt. In CGPL, in this quarter, we completed the repayment of INR 4,150 crores of term loans, completing the financial restructuring of CGPL. This has helped us in reducing the finance costs as well as dependence on the parent company. With the continued steady performance across all businesses, we have started seeing the impact of these strategic plans with reduction in Moondra losses over a period of time and significant reduction in interest cost backed by several of the deleveraging measures which have been taken by us in this year. We have seen a sharp recovery in demand with the sales in our distribution circles at Delhi, Ajmer and Mumbai, and we are almost close to the pre COVID levels. Collections have improved with distribution overdues reducing over a period of time with our collections becoming nearly 100%, not only in our existing distribution license areas, but also in Odisha. PCPL under recovery has reduced sharply with falling coal prices, better coal sourcing and logistic management. The fuel FOB under recovery has reduced from 40 in Q3 FY 'twenty to only PHP 32 in this quarter. CGPL and coal related business generated a combined profit of INR 16 crore despite the fall in FOB prices of coal companies coupled with onetime penalty of INR 31 crores in KPC and write off of the project expenditure relating to the Russian coal mines of INR 29 crores. We have now two blocks two back to back quarters of profit in this cluster. With the proposed merger with Tata Power, CGPL issues will be fully contained, and it will help us to make our all our existing businesses self sustainable. We continue to improve the availability across our renewable assets with several operational initiatives, and this is reflected in steady performance across the assets. Our overdues from discounts have consistently come down, thanks to the efforts of Government of India for the large INR 1.2 lakh crore payment that has been released to various discounts. The increased solar EPC order book has led to Tata Power Solar total revenue in the quarter, increasing from INR $4.95 crore last year to INR $9.23 crore in this year. However, the execution in this quarter was little less than planned project activities at site, and this is expected to be ramped up in the coming quarters. The current order book is likely to be executed in the next twelve to eighteen months. With all these improvements, we have clocked a 33% growth impact before exceptional items to INR $3.46 crores compared to VAT of INR $2.60 crores last year. The company has now clocked an increase of around 10% reported PAT on year on year basis for the last five quarters. The consolidated revenue stood at INR7740 crore compared to INR 7,171 crores in the previous year, mainly driven by EPCODL acquisition in Modissa and increased order execution in large scale EPC, rooftop and solar pump business. The consolidated EBITDA has stayed steady with INR $19.97 crores generated in this quarter, up by 1% compared to last year, driven by lower under recovery of CGPL and a higher solar EPC business. Despite lower coal profits, underlying business EBITDA remained steady at around 2,149 crores in this quarter. Moving on to the balance sheet and the progress on deleveraging. We completed the defense sale transaction in this quarter. Using the proceeds from the deleveraging actions and the prep equity issue, net external debt has been reduced by more than 7,500 crores over the last one year to 36,000 crore level, which has helped us to secure rating upgrade by Crescent from AA negative to AA stable and by Iqra from AA negative to AA positive AA positive. Using their better credit ratings and lower interest rate regime, the company has refinanced few loans at much lower rates, such as the recent issuance of INR 1,000 crore three year NCD at 6% interest rate. This revised debt profile is helping us to reduce our average interest cost to around 7.8% in this quarter compared to 8.6% last year. Our debt equity ratio has sharply reduced to 1.49 from 2.12 same time last year. Similarly, net debt to underlying EBITDA has improved to 4.11 times in this quarter. Over the last six months, we have been in discussions on the Inuit transaction, and it has progressed very well, and we are close to finalization of the binding agreement. We are very happy with the progress achieved till date on this transaction. And given the size and complexity of the portfolio and expected, we expect to approach the Board for approval before the end of this month. In Prahadraj, we continue to see very strong operational performance, achieving a 92% availability in this quarter. Tata Power is also providing the O and M services, which has led to the improvement in the Triage Raj plant operations. We have also continued to see meaningful progress in Murissa Discom, which operates in the erstwhile Seysu area, and we have seen significant improvement in operational and financial parameters to reach our targeted trajectories. We have been able to reduce the shipping at 33 kV levels by more than 70% while replacing almost 1.2 lakh meters till end December. At the same time, we are working on improving the customer experience with better customer care centers, call centers, and better customer relationship management solutions, also starting many initiatives to reduce the customer complaints on payments and billing. In our consumer oriented business, we won contract to provide charging infrastructure for e buses in Ahmedabad and best buses in Mumbai. Our solar pump business did installation of nearly 2,750 pumps this quarter, recording its largest quarterly revenue. Our rooftop solar business continues to emerge from the COVID-nineteen induced slowdown, and we have seen an uptick in the orders. Unbuilt order book for rooftop solar as of end December stands at nearly INR 600 crores. Our microgrid business has also seen huge progress with our one hundredth microgrid commission in UP. We have already in the process of installing another 28 microgrids, and another 62 are under advanced stage of installation. In this quarter, we also commissioned two biogas plants and thereby taking efforts to make these microgrids 100% on the renewable power. The coming quarters will be action packed for the company, and we look forward for your continued support. My colleague and I'm available now to take the questions. I now hand over the call to Saizen for question and answers. Thank you very much. We will now begin the question and answer session. And two. Participants are requested to use the handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may The first question is from the line of Swarlim Maheshwari from Edelweiss Securities. Please go ahead. Hello. Hi, sir. Good evening. Congratulations for a good quarter. And I had couple of questions, sir. So the first question is, actually, if you look at on your social business, if you can tell us what was the AT and T loss at the end of q three? And also with respect to Sesu, what were the losses at the back level, which is actually implied in your consolidated numbers? For Sesu, the tax numbers included in the consolidated number is 34 crores for the quarter. Okay. What was your other question? 30 l c loss. 30 l loss. We exited with YCV, we exited with thirty three point nine. Sorry. Thirty three point nine? Yeah. Yeah. Yeah. If I recollect, at the end of q two, the AT and T loss was at about 27.5 or 28 odd percent. So is it fair to say that in in q three, the AT and T loss has gone up? No. No. No. Q two and q one were higher than 33.9. In fact, we are on a slope from Q2, we achieved 38.7% for the quarter. So when we exited with 33.9%, obviously, the actual would be much lower. We would have 20 about 24, 25 would be for the quarter performance, so to speak, to bring down the cumulative 33.9. So I don't know where was the gap in your numbers. You read something some different number, but maybe offline, we could help you that with that. Sure. Sure. Sure. I'll just repeat that. So second thing is, you know, you we have mentioned that there is a spot in the Solar business TPSL. What is this loss pertaining to? Is there some sort of foreign loan over there? What is it? No. No. This is the by module. So for modules This is for the module. You do the product booking, so it's MTM impact. Sir, what is the quantum? No. The you you know that 70% of the input cost is imported module. 18? I'd say it's oh, quantum of the loss is about 18 crores. It's about 18 crores during the quarter. Okay. So this includes, you know, periods beyond the quarter because in the as in when we depending on the valuation at the end of the MTM valuation at the end of the quarter, this is eighty eighteen crores impact. Some of it could recover also. Okay. Okay. All right. Thank you. The next question is from the line of Mohit Kumar from DAM Capital. Please go ahead. Good evening, sir, and thanks for the opportunity. Sir, have a few questions. The first is on the expected timeline for, you know, announcement on the in between when do you expect to close the, you know, the the in bit? And the the the in megawatt terms, how much asset we are looking to hive off and the EBITDA of the assets and the life of the asset lift? That's the first question. So, well, transaction close, there is time because there are a lot of steps. There are shareholder approvals, regulatory approvals, etcetera. The first thing, of course, is to have the the basic structure agreed upon. So which is what we are just now mister Sina mentioned, we are close to finalizing that, and we hope to announce that soon. And thereafter, of course, it will go through the regulatory approval process and shareholder approval process. And as long as your as far as your megawatt sensor is concerned, we expect to put about 3.4 gigawatts in this whole mechanism. So our intent is to put all of our renewable assets barring some which have to stay back due to some reason. But, otherwise, all the renewable assets will be transferred to the Invit. And out of which 3.4 gigawatt, how much your operation at this point of time, sir? 2.7 gigawatt. Am I right? Yep. Understood, sir. Secondly, on this solar sales and models business, we have commissioned the new capacity. So what are your expectations in terms of solar, say, the model manufacturing from medium term point of view? And the order book, which you have right now on the Tata Power Solar, is it is there to assume that this entire order will be executed in the next couple of years? Yes. Because these are all generally eighteen to twenty four months duration. And and therefore, they will continuously being it will be executed in the next one to two years. And so what are your aspiration in terms of solar serum model manufacturing? Do we have any plans to go to ingot wafer? Do wanna increase this capacity? Is it something which or it is just, you know, kind of So at present, we are also looking at how the appropriate environment for the solar manufacturing will shape up. And, we are also looking forward to the, support from the government on the various manufacturing related incentives. And I think once an appropriate regime is there, then we would certainly look at that. Right now, there is no immediate plan in hand to move in that direction. Last question, sir. Are we pursuing Monsant tariff resolution given that, you know, coal the cost of the coal has again moved up and the CRC has is open for business? Well well well, right now, is not in the picture, as you know. First, it has to be approved by the five states. And that approval process, I think we have informed in the past. There are some terms and conditions on which, it has stuck, and we expect that unless those are resolved, it will be very difficult. It doesn't make sense for the company. So, so we will re we will respond as and when those conditions are resolved. Understood, sir. Thank you, sir. All the best. Thank you. The next question is from the line of Puneet from HSBC. Please go ahead. Yes. Thank you so much for the opportunity. On the solar EPC business side, should one worry about the margins given that we've seen volatility in the module prices and all? Is that something that you were impacted with as well? Well, when you are in this business, volatility is part of the game. So we do have we do have plans how we normally even out these things because this keeps happening. Right? This is not new. Of course, after a long time, prices have begun to look up, but there are also expectations that this is a short lived phenomenon. So but suffice to say that as a business, we will, of course, use all our tactics to ensure that we kind of time our entire management of the contracts in a way that we suffer the least. So And also that many of the contracts are firm prices, and it is hedged. Also, the currency hedging is done. So to that extent, we do get insulated from these market forces. But I presume most of your contracts would have a module element also into it. And would there be a way to go back to the customer and ask for a commensurate higher price, or is that not normal? No. No. No. You cannot go back to the customer, but what one can do and what we normally do is also try up on back to back basis with suppliers from China and other locations. It's not only that everything comes from China. We also source it from some other countries also. And to a large extent, we are insulated from these market forces. Okay. So you would have tied up mostly. That one needed worry about because we have 10 buses, is it? Yeah. Absolutely right. Okay. My second question on phase two. What kind of trajectory should we look at? You are already down to 33.9%. What do you think would you be in FY '22 and then '23? How should we think about this project? You've seen the trajectory which is given. I think it has been shared with you in the presentation. The whole idea is that we should be better than that. And that is what we are currently planning to do. And we are on track. Yes. And if you see, we started from a very high number because of COVID during the period April, May, the AT and T loss went up to nearly forty one percent, forty two percent, which we have now brought it down. And going forward, we have shared with you that what is the track the trajectory that we will have. And we are definitely expecting that it will be much better than what we are projecting. My last question, the government has talked about an alternate reform. Is that something that you see could happen in immediate future, or would there be a need for regulatory changes quickly? So these type of changes, of all, it has to be passed in the parliament. So the bill has been introduced, and we do not know how much time it will take, whether it will go to the select committee or it will get passed in the parliament itself. Secondly, the the the rules and regulations for doing all this has to be clearly spelled out both by the central government and also the state regulators. But this will happen maybe in a year or two years' time, and this is a great opportunity for us because of the unique experience that we have in carrying out distribution services and customer service that we provide to our customers. So I think it's it's a good opportunity going forward, and we will try to extract the maximum benefit when it opens. Right. And and the states would also have to separately agree other than just the sensors. Is that understandable? Yeah. There's a consultative process, and distribution of energy is a concurrent subject, and states have to be on board as also the regulators. Great. That's all from my side. Thank you so much and all the best. Thank you. The next question is from the line of Anupam Goswami from BNK Securities. Please go ahead. Hi, sir. So my first question on the. We posted a profit of 34 crores. So what led to this profit? I mean, I'm trying understand, have you breakeven already? No. No. So so there is a on the on the base equity, there is a ROE. That is point number one. Point number two is there are adjustments of the on a cumulative basis, the recoveries, etcetera, which are pending recoveries, which are getting made, the recoveries of old dues, there is a incentive for that. And also the recognition of the provisions for debtors, those are adjusted at every quarter end depending on the progress made. So this includes some amount of the progress belonging to the past six months also, okay, apart from the regulated equity on the investor equity. Okay. Got it, sir. So my next question on your Tata Power Solar, we have achieved a higher revenue, but our pad has gone down. That is what you mentioned about NTM losses of 18 crores. Is that the reason? Yeah. Yeah. Yeah. That is correct. That is correct. That's That is because part of the execution could happen in this quarter. The balance execution will happen in the last quarter, and then the total tax will be booked. Okay. Okay. And, sir, what is our x EPC revenue in the to start up our solar? What is it? What what is the revenue of? Ex EPC. So From this Okay. In this quarter, the 900 crores was the total turnover for the company, which is the EPC arm, of which e p EPC is $6.49. Okay. Okay. Got it, sir. So my last question is on the Tata Power standalone, sir. I see we have increased our short term debt for that. What is the reason for the increase in debt? No. This is more now we are practically planning to eventually come with a proper long term versus short term combination. Right now, due to the fact that in the last four, five months, we raised capital, we sold assets, and now we have to plan to refinance and repay some of the debt. Therefore, in the in the coming months, you will see that a lot of this short term debt will get slowly phased out into long term debt. Okay, sir. Okay, sir. Got it, sir. Thank you. I'll turn back to the queue. This has been something which is on our radar for the last six months. Even if you compare in March, the amount of short term debt we carried versus what we carried December, there is a marked decrease of about 3,000 crores. Okay. Okay, sir. Got it, sir. Thank you. Thank you. The next question is from the line of Kirti Jain from Sundaram Mutual Fund. Please go ahead. Thanks for the opportunity, sir. Sir, my first question is with regard to the Gujarat solar policy which is which has come. How has been initial response if you have got any on that front? And then with regard to charging installations, like in next twelve to fifteen months, what is the charging installations are we planning to achieve in the next twelve to fifteen months? Thanks, sir. So based on the Gujarat policy, whereby they have said that they will sign up PPAs with individual power generating individuals, there has been a very good response from what we understand from Gujarat government. They've got nearly 5,000 applications of people who are interested. They are right now scrutinizing those applications. Many of the people who have applied are in touch with us because they want us to carry out the EPC work with them and also the O and M activities. So we are looking at a great opportunity over there to support the investors, individual investors who would like to take up this type of generation program in Gujarat. Sir, what about captive consumers, sir, like large industrial houses, chemical factories, or the ceramic units? Are they also coming in to sign the PPAs or what? Or sign the agreements? That is a part of our Ripstop business, whereby we are tying up with them either on purely EPC basis or group captive basis. So, again, there has been very good orders that we have received in the last quarter, and we are seeing huge amount of traction in these type of industrial and commercial establishments who would like to go for rooftop solar solutions. And we are also now coming up with large initiatives and publicity campaign to reach out to many more consumers in different parts of the country to see that how the benefits offered, self generation through rooftop can be provided to these consumers, and their electricity bill can come to that extent. Then on e EV installation charging station installation, sir, what what is the number we are targeting for the next twelve to fifteen months? Right now, we have nearly 300 public charging stations that we have set up, and we expect to complete this year by with nearly 500 charging stations. And these are fast charging stations in public locations. We also have done nearly 2,000 home chargers. And going forward, these numbers, I think, will be shared with you in terms of huge growth potential, and we will be playing a very, very important and critical role in providing these infrastructure throughout the country. Okay. That's the last question from my side. Sir, yesterday, one of the news I saw that the AP bidding happened, and at two point four eight also, we didn't win any project in the AP bidding. And second thing, NTPC is able to take our service and is able to supply at 2 rupees, whereas we are not participating in those solar tender. Any particular reason, sir, in those two aspects we didn't do, sir? Yeah. So first of all, about the AP, we found that the AP bidding is being done without consent from the regulator. And, the agency which is doing the bidding is not is not authorized to carry out this sort of bidding. It has to be a distribution company which has to do that. So so that's why we felt that the whole process is not very transparently done, and we would not be in a position to bid in that. Secondly, as far as the competitive bidding came, we normally bid in all projects, and you have seen in many of the recent projects that we have bid and we have competed to believe one of those projects. And we keep on assessing the market and based on the opportunity and what sort of return realization that we expect. We normally bid and we've been in those contracts. Sir, in terms of the solar pumps, how has been the response or any numbers can you share on solar pump side, sir? So this year, we have we shared with you that in last quarter, we implemented some 2,750 pumps, and we have a very good order book of solar pumps. This year, we have 7,500. Numbers have been implemented, and we are expecting that in future because of the huge push that government of India is giving under the Qusum program, we'll be doing more number of solar pumps, sir, going forward. That's one of our growth businesses apart from group boxes. Okay, sir. Thanks a lot, sir. Thank you. The next question is from the line of Rahul Modi from ICICI Securities. Please go ahead. Thank you for the opportunity, sir, and congratulations for good set of numbers. Sir, I just wanted to take your view on the bidding landscape in the solar projects, and we've seen a lot of hybrid projects are also coming up. So, sir, what are the kind of bids that you are looking at in the next means opportunities that are coming across on an annual basis realistically on over the next couple of years? Right. See, now what has happened is that in last one year, because of COVID, not many projects have come up. And as you know that the government of India has a plan that by December 22, one lakh 75,000 megawatt of renewable will come. We are still at 90,000. So there is a huge demand to catch up in next one and a half years on on little less than two years to meet the target of one lakh seventy five thousand. We are seeing that many of the state governments as well as SECI and NTPC have plans to not only come up with just pure solar or pure wind project, but also hybrid projects where they will come along with storage or will also come with a combination of thermal projects. So we are looking at a big opportunity. The second thing is that, again, the RPO obligations for states has still not been enforced. The new amendment to the Electricity Act is talking about enforcing the RPO obligation. We are still at about 10% of our total energy coming from renewables. If we have to become 20%, then the capacity addition has to be much larger than what it is today. So considering all these things, we do expect that there'll be lot of traction in coming months on not only pure renewable, but also high key projects. Sure. Sir, sir, just wanted your view on one thing. Like, recently, Gujarat went in for this Gujarat regulator asked DISCOMP to consider the return ring. And, you know, it's a very peculiar situation that every two months bids are being called and prices are at least 20 passe lower than the previous bid. And, ultimately, we are with the 20,000 megawatt of unsigned PPAs by various agencies. And then we are at a 2 rupee tariff where, obviously, the participation is thin. So, sir, what is your view as to how will this deadlock get dissolved? Because at some price, someone has to sign. So what's your view on this? It's typically the these types of things do not happen. These are aberrations, sir, which happen. And this is for the first time that Gujarat's regulator, instead of adopting the tariff, has asked them to re rebid. Again, the amendment in the electricity act says that under 63, if there is a bidding done, the regulator has to adopt that tariff and it cannot reject whatever tariff has been determined through a bidding process. So I think both through the regulatory system as well as the amendment to the act will push the regulators to comply with these normal bidding norms rather than making needed decisions of modifying the the bidding process. Sure. Sir, now in terms of discounts, is there any discussions that you are having with policymakers and the states? Any particular states who are looking to privatize this comes over the next twelve to eighteen months, at least initiate any process with with in that regard? See that we typically are in constant touch with the various state governments, and we share with them the opportunity to reduce losses, provide better reliability, better service to their consumers. So this is a ongoing process on a regular basis, and these decisions are taken by the government based on their desire to implement it. The reform process, the timing of it is determined by when they have elections and when the government would be in a position to take a hard decision. So this is something that on a constant basis, we connect with all the state governments. Okay, sir. And no specific What are there are and but it's it's it's fluid. Very it's very speculative at this stage. Yeah. Very difficult. It is at different levels and different stages of discussion. So very difficult to say at this stage. Right. Sir and, sir, my last question is with regard to the revenue model of the EV charging ecosystem that we are developing. Sir, how exactly does the entire scheme work in terms of our revenue model? Is it just a power sale, or how does it work? No. It's a combination of power sale, services, and a network. So there'll be charge for the network. So, therefore, it's a combination of all three, and and plus there will be some value added services thrown in. So at this point, I think we will not be able to share the full model because some of it is evolving. We are doing lot of seeding work in the market. And as we go along, a lot of refinements will happen in this model. Sir, will this be a licensed business? Or now, obviously, if the delicensing is passed, then it's passed. But, typically, will it be a license? No. There is no such sign. I think the government already is doing this to encourage more and more their penetration. And since there's many of the private sector players may not be clear about how it will move ahead, they are pushing a lot of government efforts also into this. But overall, it will be to our to the best of our knowledge, it's all going to be open market because, ultimately, it's all about penetration. So everybody has to chip in there. Sure, sir. Thank you and all the best. Thank you. The next question is from the line of Anikit Mittal from Motilal Oswal. Please go ahead. Yes. Thank you for the opportunity. So a few questions on the EPC front. Now firstly, if I look at the EPC order book you provided on slide number five, and if I adjust it for the in house projects, you know, there is a very large concentration that you have towards NTPC projects. So I I just wanted a sense, you know, from a broader EPC market perspective, you know, is there any reason for this? I mean, are there are the other are you developers sort of doing the EPC work in house? Yes. I think many of them are doing in house. Okay. So just from a sustainability perspective, would it be fair to assume that the sustainability of your order book would be dependent on these PSU products able to win awards and then, you know, contracted for for EPC work? Not necessarily because there would be new and newer players, and many players would also change their preference to do it through outside contractors depending on the size, scale, and their ability to execute. So therefore, we expect this market to continuously evolve. And as new players come in and new investors come in, they may like to actually go with established EPC players who will provide them a more assured EPC service. So this is going to be a growing market. It is not only dependent on PSUs. Okay. Sure. And, you know, just one question on the solar rooftop front. Now I understand, you know, this is a, you know, very big segment for us where we're expecting strong growth to come in. But, you know, with the recent mandate for net metering restrictions, one, how do you see, you know, the market sort of going forward, and what sort of installations are you looking at from an f I twenty two base? You answer that one. Net meeting. The rooftop net meeting. Mhmm. It's asking me what does it mean, given the latest guideline on net meeting. See, the the net metering concept was brought in when the cost of rooftop solar was $14.15 rupees. At that time, to induce people to go for rooftop solar, the net metering was brought in. Today, the cost of rooftop solar has come down drastically in the 4 rupee range. So for consumers, whether they are industrial or commercial or even domestic, the arbitrage for generating on their own is much better. And they typically are now generating enough to meet their captive requirement and not for the purpose of giving it to the grid and getting the net metering benefit. So I think conceptually, the whole structure has changed. But otherwise, is a huge demand that we see in the market because at the end of the day, today, the industrial and commercial consumers end up paying about $9.10 rupees. While if they do captive generation, it is about 4 to 5 rupees. And they will tremendously benefit if they go for rooftop solar. Okay. So just to get an get an idea from the next couple of years because, you know, the problem is what's happened is is is based on the recent guidelines, they said that net metering will only be allowed for loads up to 10 kilowatts. Right? And I think there's a leptancy for for consumers to actually go on a gross metering basis. So from a next, let's say, two year perspective, what sort of, you know, installations do we see on the solar rooftop front? Yeah. The the the there will be lot of demand. The growth is something which has happened globally everywhere when there was a large penetration of rooftop solar, the gross metering has happened. So this is something which will transition over here. The net metering will have a sunset, and we we need to see that when they correctly Prices. Yeah. But it will push up the prices a little bit. Yeah. Market will readjust. Yeah. Okay. So maybe just to get a sense on the numbers over here, could you tell me on a nine month basis what's the revenue and EBITDA from the solar rooftop segment? Nine months solar rooftop, we made revenue of about 300 crores. What would be the EBITDA? At present, we are not disclosing what will be done. So some of the new businesses which are nascent, we are not disclosing EBITDA because they are in very early stages. But I think at appropriate time, we will start disclosing. I think it'll be better we started systematically before we selectively answer this. Sure. And and maybe just one last question on the rooftop front. Because it's just wanted to understand the model over here. So let's say the installation that we do, is it is it largely a CapEx model or an OpEx model? We have both. Okay. Okay. Depending on what the consumer wants. Okay. And could you provide just some sort of visibility in the chip from an FY '22 perspective? What would be the total installation that you're looking at for Datapart? So we won't be able to share that right now. But at the appropriate time, should we decide, we will be sharing it. Okay. Sure. Sir, my next question is is on the Sesu front. Could you tell me what's the overall cash at Sorry. Overall? The total cash. Cash and cash equivalents of SSO. Total cash and cash. You you sorry. You were thinking about SSO? Yeah. Yeah. The SSO business. What's the overall cash? Sorry? Yeah. 1,200 crores. 1,200 crores. So if I look at slide number, you know, 34 of your PPT, the overall debt in Sesu is 90 crores. Right? And the overall cash right now is 1,200 crores. So is it right for me to say that the takeover of Sesu has led to a cash infusion of 1,100 crores? I mean, yeah, it's only a very accounting way of looking at it because at the end of the day, this is restricted cash. This cannot be just freely used. So but your net debt amount would would include the 900 cash of Right? Yeah. Okay. And, sir, then, sir, on the 700 cash of Sesu, you would also be earning other income? Yes. Okay. Yes. Then it's deployed. Yes. But it will be safe safe haven security, so it will not be a very high level of income, etcetera. So out of the 34 crores that we've done on three q, how much of that is other income? Because on a 700 crores number, even if I assume, let's say, a 5% other income, I think you would be earning on the 34% number somewhere between 20% of other income itself. This is a pass through. So we want that through to the bottom line. Oh, okay. Okay. That's a pass through. Alright. Okay. And so one question on the on the Delhi front. You know, I think there is some impact of order that you've that you've mentioned in your PPT. So what is that? Will you repeat, please? Delhi. So the Delhi distribution front, you mentioned that there is an some order impact that's coming. That's about 34 cross. Coming out my tariff order. That's coming out of a tariff order. Okay. And this is one last question. Maybe on the CESP front. I think the three q numbers include include the takeover of CESP. Right? So within April, we've also taken over Vesco as well as Southco. Right? Yes. And we'd also be taking over Netco. So what would be the, you know, cash infusion that would come in there? So so let's say, set to us around 1,100 so so net debt has actually benefited by around 1,100 crores because of set to coming in. So would it be fair to assume that there would be another somewhere between 2,000 to 3,000 crores of, you know, cash infusion in a way that can happen because of takeovers of DC entity. The other two disc the other three discounts by the way, the third discount is yet to be really contrasted, but the two discounts, We are yet to get the final balance sheet, etcetera. So we won't be at present, what we have is only. And it may or may not have that level of balances also. Okay. So there's a process going on on the handing over. Only when it is complete, we'll be able to know what exactly is the cash balance there. Alright. Okay. Okay. Alright. Fine, sir. Thank you. That's it for me. Thank you. Thank you. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead. Good evening, sir. Thanks for the opportunity. My first question is, at what stage of approval is the amalgamation of Mundra into the stand alone entity? So right now, we are are soon going to have in the next two weeks, we are going to have the shareholders closure of the shareholders approval, which is the NCLT called meeting. And following that, we will have to file the results of that shareholder results, and and then we will wait for the approval. So it's very, very advantageous of getting close. Okay. So one can assume it will be done in this financial year? Yeah. Even if it is still lower, you know that it is effective April 20. So the effect will be there before we close the accounts this year. Okay. And the second question is, in your stand alone accounts in the presentation, I noticed the other income of INR 700 crores. What is driving that other income? So this is a dividend from subsidiaries, overseas subsidiaries, and it is getting in the console, it gets eliminated. Okay. Which overseas subsidiary is giving such a big dividend? This is our our our shipping subsidiary Okay. Post the sale of our shipping assets. Got it. Okay. And the third question is, of the 19,480 crore debt at Tata Power stand alone, what is the updated figure on the debt attributable to CGPL and the debt attributable to the acquisition of Wellspring Renewable, Oil One Renewable. I don't know whether it's still relevant to isolate, but you know it is 38 3,900 for the Wellspring acquisition and about I don't know. 8,000. About 8,000 crores can be attributable to CGPL because originally, CGPL had about 13,000 odd crores. It just comes out to 4,000 crores. Sure. And after I take these two buckets, the score date should largely be attributable to the license area? Yes. Yes. And, of course, supporting investments that are made, for example, Odisha investments or some of them be there. So yes, broadly, that's correct. Yes. And if you could outline what is now on the annual as far as CapEx is concerned over a one year time frame, say, maybe in FY 2022? So if you if you take away the renewable assets because that purely depends we have currently, let's say, about a gigawatt, so about 4,000 to 5,000 crores of CapEx in the pipeline on renewables. But apart from that, the regulated businesses normally are around thousand to around thousand crores. We do have a potentially higher number in transmission in Mumbai, but that is that will be known in maybe a month or so. We'll be able to share maybe in the next quarter call, we'll be able to share the exact outlay for next year. But that's broadly the CapEx plan. And the new businesses have very little CapEx, a couple of 100 crores at best. And, yes, we do have an FGD program close to INR 4,000 crores across our thermal units. So that will be staggered in next year and the year thereafter. Okay. Okay. And finally, as a follow-up to one of the earlier questions, you mentioned that INR 3,000,000,000 of revenue contribution in nine months from rooftop solar. If I were to look at rooftop solar plus micro base plus EV charging and home automation, this total would be approximately how much in revenue terms? Maybe 500. Roughly 500 crores, YTD would would be between rooftop and other products. And for the quarter, it'd be about INR $2.50 crores. So for the quarter, it's INR $2.50 crores. And so how do we evaluate profitability in in the customer oriented businesses? I I know you're not going to give me a figure, but how do we think about profitability? No. Mean, ultimately, it's probably margins. What they are saying right now is that they are in early stages of development. So once it stabilizes in terms of the initial capital and the infrastructure that you were to put in, then I think we have start talking about right now, they are all in building stages. And we would love to put all of them in WIP and and and and CapEx, but but accounting treatment doesn't allow. But strictly speaking, they are in very building stages. That is why we are we are not wanting to kind of come to a conclusion on what the guidance on margins could be. And all these customer oriented businesses are sitting in Carapa Power Solar? So except the pumps, which which is sitting in Carapa Solar, Others are in stand alone, but we're able to merge Tarapasolar also, as you know. So effectively, all these new businesses will be in in the stand alone period. Stand alone. Got it. Thank you, and wish you all the best. Thank you. Thank you. The next question is from the line of Atul Tiwari from Citigroup. Please go ahead. Yes, sir. Thanks a lot. Sir, my question is on the longer term strategy. So a few months ago in the annual analyst meet, you kind of laid out the path to improving the consolidated ROEs to a much higher level. If I remember correctly, percent, 13% plus. But at the same time, you are deploying a lot of capital in the renewable business. And if I look at, say, year to date FY '21 pad of about $2.54 crores, this is basically funds for renewables without EPC On a network of about INR 8,000 crores, the annual ROE appears on the operating capacity, ROE appears to be less than 5%, and we are deploying even more capital behind our business where based on the current evidence, ROE appears to be less than 5%. So how do you reconcile the two, you know because on one hand, the the business appears to be pretty suboptimal ROE. And at the same time, we have laid out this vision to of increasing consolidate ROE to a much higher level. Okay. So there are two important aspects to it. Right? One is, structurally, these businesses have a certain curve when it comes to ROE. The initial period because of interest, depreciation, and deferred tax, they generally tend to have a very low ROE to start within the first three, four years. Then as repayment starts happening and per tax rewinding happening, the ROEs grow. This is one issue. But that doesn't mean that there is no equity return because the cash generation is strong. And all this just you when you put back and you see the overall return on the cash, which is redeployed, then the ROE is very different. That is one point. Second is the whole concept to the Invict, we are doing only to take care of the asset because our invested equity outside of the balance sheet of Tarapara will be only our share in the Invict. And the Invade is designed to give a certain flat and regular yield. That then becomes straightaway a high yielding equity. Right? So that's the whole idea. And by also the premium that you get on selling the asset to the Invit also helps you to reduce your capital invested and therefore increase the ROE. The whole idea behind this whole plan of Invit, etcetera, is to overall really jack up the returns on the invested equity in these assets. And therefore, our target is still absolutely on course on on trying to develop our returns on equity. So, sir, for this $27,000,000 megawatt operation capacity, what will be the state of weighted average life as of now? I mean, for how long time they have been operational? Any kind of rough number. Is it, like, five, six years or less than that? Or more than that? Yeah. Average age would be five five years, around five years. I think we will have Even after even after five years, we are having 5% ROE. And, obviously, the project would have started execution maybe eighteen months earlier. So maybe we are looking at, like, seven years project kind of first hit the ground, and we are doing 5% ROE. So don't you think it will kind of hinder your, you know, journey towards a much higher consolidated ROE? I mean, ex of this inward transaction. Inward transaction, of course, will boost ROE. But on an ongoing organic basis, you know, if projected in after seven, eight years is giving you just 5% ROE, you know, it's very difficult to reach a 13% consolidated ROE in that kind of business. So I think we'll have to sit with you with the math, but the point is that there are two, three issues which you are forgetting that in the summary the assets we already kind of repaid loans. So that has been taken away. Then the network is not the right denominator because the investor ROE is much lower. And and and and therefore, if your question is whether the long term returns are are answerable, the answer is yes. They will add up. They will add up. And you'll have to see probably the life the entire life cycle of the return, then it will match up. Okay. Thanks. Thank you. Thank you. The next question is from the line of Rajesh Majumdar from B and K Securities. Please go ahead. Many thanks for taking my call, sir, and congratulations on a good set of numbers. Not just the numbers, but also the disclosures made in the PPT as well as the Excel file sent to us on the results. Much appreciated. Thank you so much, sir. I have a couple of questions. On the free cash flow side, did we get a figure for the thirty third December free cash flow for the company? Yeah. So we have about 100,000 there for this. Months since the September. That flow before CapEx, we've generated about 3,600 crores. It's 3,500 crores. That's the we have a run rate of about $712,100 crores per quarter. Sorry to interrupt you, sir. Mister Majumdar, please self mute your line while your question has been answered. Thirty one December. The cash flow statement. Sorry. We didn't hear you. Sir, I'm saying I what is the free cash flow figure at the end of thirty first December? Yeah. So free cash flow for this year is about INR 3,500 crores before CapEx. Before CapEx? Yeah. Cash flow was around INR 2,000 crores. We have INR 1,500 crores of free cash flow. Right. So what is our target of free cash flow generation given all our upcoming projects? Given that the fact that we have a CapEx program of nearly INR 5,000 odd per annum across all the regulated businesses mostly? Yes. If you include all the SG and A projects, yes. Could be. Yes. So my my other question is what kind of free cash flow you generate? And what would be our dividend policy if we account for INR 5,000 crores kind of CapEx every year? I think I won't be able to give you a forward looking statement like that. All all we are saying is our plan includes remember next year, our ability to pay dividends and accommodate a higher the higher there are two, three reasons. One, the full effect of interest savings, which is our dilution in the renewables business would give us further cash, and that would that means our cash generation increases. Therefore, our ability to have cash other than the equity that we have invested on the CapEx will be much higher, and therefore, the dividend paying ability would be better. So that is how our plan is calibrated. And remember that we still have a lot of room in terms of debt. We we we are going to be very, very low on debt equity for the in which, so therefore, we have a room there to invest without investing further equity. So that's what I'm asking you. My second question is on the regulated business side. If you look at your planned program on the T and D side, Mumbai and Delhi is going to account for nearly INR 12,000 crores over the next five years, if I'm not mistaken, till FY 2025 as per your, program. And, the last three years, we have just invested around INR 5,000 crores in these two circles. So given the size of these circles, is there any risk in terms of the regulatory CapEx that we're going to do in these circles? Or can you give us a broader game plan on this? I think our longer plan, which we had shared during the study, had two, elements, which is beyond the current businesses. One is the Orissa circles plus expected expansion and plus a certain high a certain specific program in Mumbai transmission, which was a significant CapEx plan, which is going to happen, which is not comparable with the past. So all this together is what that plan was. So that significant CapEx program is you don't, obtain any kind of approval issue in that, basically. That's what I was getting at. Sorry. Your voice was a little muffled. Can you repeat it? Yeah. I'm saying on the significant CapEx in Mumbai, I think it's about INR 6,000 crores, you don't apprehend any kind of approval issues on that? No. Because we believe that there is need for that CapEx, and we expect that it will get approved because there is a need of the art right now. In any case, sir, we spend this money only after we get the in principle approval. So only after the state transmission unit and the regulator approves it, we go ahead and execute these orders. So they are, to that extent, protected that we will get the regulated pickup. Right. No, no. I'm just saying that if you are going to get the regulatory approval or not, because a large part of our growth in the regulatory business depends on that CapEx. No. You're right. I think this has been after considering the the entire network plan for the next five years, there is a clear need that is emerged in our assessment, and we believe that there is a very good good case that the regulator will approve it because we know the we know why the CapEx is required. Okay. In fact, for the next two years, already, the 2,000 crores has been approved. So for next two, three years, they have already approved the large amount of CapEx plan. Okay. Okay. Thank you. Thank you. Thank you. Ladies and gentlemen, we have come to the end of the scheduled time. I now hand the conference over to doctor Sinha for closing comments. So thank you to all of you for joining us for the call. And wherever you have more questions, my colleagues will be more than happy. Kasturi and Rahul Shah can offline take these questions and respond to all of you. And we look forward to receiving your feedback and improving the services that we can provide, considering that we have a long term strategy and your feedback is important for implementing there. So once again, thank you, and I look forward to interact with you again. Thank you. Ladies and gentlemen, on behalf of Tata Power, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.