Ladies and gentlemen, good day and welcome to the Q2 FY 2027 earnings call of JSW Energy, hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Ishan Verma from Antique Stock Broking Limited. Thank you, and over to you.
Thank you, Ma'am. Good afternoon, everyone. On behalf of Antique Stock Broking, I welcome you all to the Q2 FY 2027 results conference call of JSW Energy Limited. We have with us today from the management, Mr. Sharad Mahendra, Joint MD and CEO, Mr. Chandrasekaran Prabhakaran, CFO, and Mr. Bikash Chowdhury, Head of Investor Relations and IR. We will begin with the brief opening remarks from the management, followed by the Q&A session. Thank you, and over to you, Sharad sir.
Yeah. Thank you, Ishan. Good evening, everyone, and thank you for joining us for JSW Energy's Q2 FY 2027 earnings call. I hope you and your families are keeping well. At the outset, let me start with the fact that the fundamentals of our sector have never looked this stronger. If I were to sum up this quarter in one line, it would be this: The market is moving towards exactly what we have been building. Three themes defined the sector over the last three months. Demand kept beating expectations on the back of a strong economy, energy security moved to the center of the national agenda, and the procurement shifted decisively towards firm reliable power. Let me take each of these in turn and then show you how JSW Energy is positioned on each. The first is demand, and it rests on resilient economy.
India continues to be among the fastest-growing major economies in the world. Real GDP grew 7.8% year-on-year in quarter one of FY 2027, and the RBI expects growth to remain robust at 7.1% for FY 2027. High-frequency indicators point to sustained momentum. The index of industrial production grew 8% year-on-year in August. PMIs rebounded in September to 55.1 for manufacturing and 55.2 for services, well within expansion territory. GST collections rose above 7.7% year-on-year to INR 6.15 trillion in quarter two of FY 2027. This economic momentum is translating directly into electricity consumption. Power demand in quarter two FY 2027 grew 11.1% year-on-year, building on 8.3% growth witnessed in quarter one.
September alone grew about 11.3%, with peak demand touching 270 GW in Q2 FY 2027. The momentum is strengthened further in October with month-to-date demand growth of 21.2% and year-till-date demand growth of almost 11.4%. Part of this is weather, as monsoon was about 13% below normal in Q2 and cooling demand stayed high well into the evenings. The large drivers are structural and, in our view, durable. Industrialization, urbanization, rising per capita consumption, and new sources of load such as data centers, electric mobility. These support our view of 5% to 6% long-term CAGR in power demand, and the last two quarters suggest that view may prove conservative. The second theme is energy security.
The ongoing conflict in the Middle East has disrupted LNG and crude flows through the Strait of Hormuz, tightened global energy markets, and pushed utilities across Asia back towards coal. For India, the priority is clear: Secure, domestically sourced dispatchable power backed by a domestic manufacturing base is no longer an option, it is a strategic necessity. The sharp rise in imported coal prices has significantly impacted fuel costs across the sector. API 4 benchmark coal prices averaged close to $115 per ton in Q2 FY 2027, up around 28% year- on- year from $90 per ton. Despite this increase, our transition to domestic coal and implementation of job work arrangements at imported coal plants shielded us from fuel price volatility and has enabled us to effectively mitigate the impact and maintain cost competitiveness. Domestic supply has also tightened.
Coal stocks at power plants fell to multi-years low, and in October, around 96 plants were classified as critical, holding an average of six to seven days of stock against the normative 19 to 20 days. Tight fuel supply, coupled with robust demand, flowed directly through to the power exchanges. Day-ahead market prices averaged Rs5.70 per unit in Q2 FY 2027. As compared to this, our merchant realization, however, stood at Rs6.90 per unit, which was around 20% higher than the DAM average. This is driven by the strategic bilateral contracts we have entered into. The third theme is the shift towards firm power. On the supply side, capacity addition continues at a record pace. India added about 23.9 GW of renewables in the first half of FY 2027, including 20.8 GW of solar, taking non-fossil capacity past 300 GW.
On the thermal side, about 3.3 GW was net commissioned in H1, with about 39 GW under construction. The more telling signal is in the bidding. Renewables still dominate new capacity additions, yet procurement is shifting decisively towards firm and dispatchable capacity. FDRE, solar plus storage, standalone batteries, and notably long-term thermal. States awarded around 17 GW of long-term thermal capacity at tariffs of about Rs5.40 to Rs6.30 per unit in FY 2026, and a further 18 GW of thermal tenders are currently under bidding. To us, the conclusion is simple. Renewables and thermal are not competing, they are complementary. Renewables deliver the cheapest energy, while thermal and storage keeps the light on through the evening peaks. Let me connect each of these three themes, demand, energy security, and firm power, to what we executed during this quarter gone by.
Since April, we have commissioned 1.4 GW of organic renewable capacity as compared to last full year's approximately 1.2 GW. This is also nearly 1/2 of our FY 2027 guidance of 3 GW. in Q2, we added 513 MW comprising 301 MW of solar and 212 MW of hybrid capacity. Including the 300 MW Maruti thermal acquisition, total capacity addition since April stands at 1.7 GW, taking our installed capacity above 15.1 GW, with renewables accounting for approximately 61% of the portfolio. Of the remaining 1.6 GW to be commissioned during the year, we are fully on track. Land and transmission connectivities are secured. Equipment is either on-site or in transit, and offtake is backed by long-term power purchase agreements. The pipeline is substantially de-risked, and we are confident of achieving our 3 GW commissioning target of FY 2027, supported by planned CapEx of around INR 20,000 crores.
Further, on our energy storage pursuits, we expect to commission about 1 GWh of Battery Energy Storage System projects in FY 2027. We are also enthused by the sizable C&I opportunity in the market, and particularly by the opportunity within our own group as its companies pursue ambitious growth plans. Our installed C&I portfolio, including group captive, stands at 3.7 GW, about 25% of our total operating capacity. We expect it to grow to over 8.5 GW by 2030, with group companies contributing a large share. JSW Energy has long been the energy partner of choice for the JSW Group, meeting around 3 GW of round-the-clock thermal and renewable power demand across group companies. That partnership has the potential to have a significant step-up, with JSW Steel planning to expand capacity to up to 80 million tons per annum and other group businesses scaling rapidly.
The group's RTC power requirement is expected to more than double to around 7 GW by 2032. A substantial share of this will be met through green energy in line with the group's decarbonization ambitions. We have already laid the groundwork to capture this demand. Of the 6.2 GW of MOUs signed with the group companies in quarter two of FY 2024, 4.5 GW is yet to be tied up, and 2 GW of this is under advanced discussion. This represents a large visible and high-quality growth pipeline with certainty. JSW Energy is well-positioned to serve as an integrated energy partner to the group and to the wider industrial market, delivering reliable, round-the-clock, and increasingly green power at scale. This will add a strong layer of long-term assured demand to our growth trajectory.
Looking further ahead, our long-term pipeline gives us clear line of sight to our 30 GW target for 2030, and our growth runway extends well beyond it. Multiple drivers support our growth beyond 2030. The Salboni thermal project, the 920 MW Punatsangchhu Bhutan Hydro project, our first cross-border generation venture being developed in partnership with the Druk Green Power Corporation Limited, Bhutan's state-owned utility, and further thermal and C&I opportunities. Meanwhile, our sizable pumped storage pipeline of 26.4 GWh remains on track. Moving ahead, as the market pays more for firm power, we have strengthened our thermal platform in two ways. First, by buying value. We completed the acquisition of Maruti Clean Coal & Power Limited in August at an enterprise value of INR 1,410 crores. It is EBITDA and PAT accretive from day one and lowers our net leverage.
About 195 MW of this capacity is tied up under a long-term power purchase agreement with Rajasthan Discoms, of which around 14 years of residual life is there. While about 64 MW gives us merchant exposure at a time of strong prices. In Q2, this plant generated about INR 45 crores of EBITDA in just 55 days from our acquisition on August 6th till the end of the quarter. Second, by building at low cost. At Salboni, turbine generator orders for all four 800 MW units totaling 3.2 GW are now in place, with the phase II turbines ordered from Toshiba JSW in September. Site work on phase I is progressing well, and the first unit is expected to be commissioned in 2030. At KSK Mahanadi, the 600 MW fourth unit remains on track for FY 2028 commissioning and balance 1,200 MW commissioning scheduled in FY 2029.
On fuel, our continued shift to domestic coal has insulated us from the rise in imported prices, as I said earlier. Recently acquired Maruti Clean Coal & Power Limited Thermal Plant is also fully domestically fueled through a long-term fuel supply agreement with SECL and linkage under SHAKTI scheme. Coming on to our thermal growth ambition. As you know, we raised our stake in Toshiba JSW Power Systems Private Limited to 10.7% in July. The scheme to acquire GE Power India's boiler business, including its Durgapur manufacturing unit facility, received NCLT sanction on 1st of October, and the transaction is expected to be closed very soon. We have placed the boiler order for the entire Salboni project with the Durgapur facility, which sits in the same state as the project.
With turbines from Toshiba JSW Power Systems Private Limited and boilers from our own facility, we now control the critical path of our thermal build-out at one of the lowest capital costs in the industry, and on one of the shortest timelines. The same logic applies to renewables. Our Halol wind blade facility has been producing blades for our wind projects since its commissioning in June, and the Chitradurga facility remains on track for completion and commissioning in quarter three, current quarter of FY 2027. Further, I am also pleased to share that ICRA and India Ratings have affirmed JSW Energy's long-term credit rating at AA with a stable outlook. This recognizes our larger and more diversified operating base, our high share of contracted capacity, and the deleveraging we delivered through the INR 10,150 crores of capital unlocking in this calendar year.
A stronger rating directly helps contain our cost of capital as we fund our ongoing leg of growth. I would also like to address curtailment, an issue the sector as a whole is grappling with. Curtailment across our portfolio stood at 4.8% of the total generation in H1, which is lower than what the national level curtailment of about 5.4% has been witnessed. This has been possible primarily because of the diversified asset base rather than having majority of the assets in the areas where the curtailment is being witnessed more. In Q2, our curtailed units stood at 225 million units with a revenue impact of INR 59 crores. Further, about 60% of our curtailed capacity currently on temporary grid network access will move to permanent GNA by end of current quarter, which is quarter three of FY 2027, and which will significantly reduce our exposure meaningfully toward this curtailment.
Our growing renewable portfolio also helped us avoid about 13 million tons of CO2 emission in H1 of FY 2027 and about 8.4 million tons in quarter two of FY 2027 based on the prevailing Indian grid emission factor. Now, coming to our quarter two operational performance. Net generation of quarter two FY 2027 increased by 17% year-on-year to 17.5 billion units, driven by robust capacity addition and healthy plant performance. On hydro, the monsoon was weaker this year and all India hydro generation declined about 15% year-on-year in quarter two. Our plants held up well against this backdrop, helped by their location in Sutlej and Ravi basins, which outperformed the national trend. In the Sutlej basin, Karcham Wangtoo and Baspa did broadly comparable to the basin operating at consolidated PLF of 90%. In the Ravi basin, where our Kutehar plant is, the generation rose about 14%.
Kutehar more than doubled its generation to about 408 million units in its first full monsoon season at a PLF of about 78%. Our Tidong plant, which was commissioned in Q1 FY 2027, much before the scheduled timeline of October 2026, gave us a healthy advantage of ongoing hydro season. The plant generated 199 MUs in quarter two at a PLF of 61%. Overall, driven by incremental generation from Kutehar and Tidong, our hydro generation was 3,421 million units, up 13% year-on-year. On thermal, generation was 8.9 billion units, up 13% year-on-year, including 321 million units from the newly acquired Maruti plant. Our consolidated thermal PLF was 75% in quarter two against all India thermal PLF of 67.8%. Mahanadi plant operated at 90% PLF. Utkal on continued stable supply under its PPAs with Karnataka and Assam at a PLF of 82%.
Utkal had an exceptional quarter now that it operates under long-term PPAs. Plant EBITDA more than tripled year-on-year to INR 368 crores in quarter two FY 2027, and grew over 60% year-on-year in H1. This was driven by significantly better plant performance and by PPA realizations well above the DAM prices at which the plant's power was sold a year ago. On renewables, all India generation grew about 11% year-on-year for wind and about 39% for solar in Q2, driven largely by capacity additions with all India PLFs of 37% of wind and 18% for solar. Our wind and solar portfolio operated at PLFs of 46% and 19% respectively, and generation was up 25% for wind and 36% for solar, supported by a year-on-year capacity increase of 1.5 GW.
Now turning to our financials, many of which you will already be familiar with from the pre-call materials. Backed by robust capacity addition and healthy plant performance, revenue for the quarter was INR 6,658 crores, which is up 24% year-on-year. EBITDA was INR 3,907 crores, up 23% year-on-year. With year-on-year capacity addition of 1.9 GW and new assets being capitalized, depreciation rose 17% to INR 943 crores, and finance cost rose 14% to INR 1,615 crores, in line with the pace of capacity we are adding. Further, I am sure many of you have questions about the potential increase in the interest rate due to the recent actions by RBI and the inflationary expectations, and what they could mean for our bottom line. Our debt book is well-insulated. Close to a quarter of our term debt is at fixed rates, which is around 88% only.
And nearly 90% of the floating portion is linked to lenders' internal benchmarks like MCLR, rather than repo or other market instruments like treasury bills, et cetera. Historically, we have seen that MCLRs tend to lag and not increase in the same quantum as that of repo. We also actively and progressively keep pursuing refinancing as our projects reach commissioning and build operating track records. With that lever of refinancing is still available and lag in MCLR reset, we do not see any immediate rise in our debt cost and maybe only a modest impact in the medium term if the interest rates hikes continues. Additionally, as you can see in our presentation, our debt cost has come down significantly by about 51 basis points to 8.28% from about 8.79% a year back. Profit after tax was INR 1,141 crores, up 38% year-on-year.
And PAT attributable to shareholders was INR 1,056 crores, up 50% year-on-year. Excluding debt tied to capital work in progress, our net debt to TTM EBITDA stands at about 4.94 x, down from about 5.2 x in FY 2026. We hold cash and cash equivalents of about INR 15,700 crores and our cash return on net worth adjusted for our JSW Steel shareholding stands at about 15%. Now, let me return to where I started. The economy is growing strongly and power demand is growing even faster. Energy security is now national policy, and the market is rewarding firm reliable power. On this front, JSW Energy is well-positioned on each of these fronts. We have a portfolio diversified across modes such as thermal, hydro, wind, and solar, backed by an increasingly integrated supply chain.
We have a clear record of delivery with 1.4 GW commissioned this year, and full visibility of the next 1.6 GW in balance part of this current financial year. Our long-term pipeline underwrites the next phase of growth and a healthy balance sheet gives us the headroom to fund it. Overall, we enter the second half of the year with confidence and momentum. Thanks, friends. Now as we approach Diwali, I would also like to extend warm wishes to all of you and your families for a joyous festival and a prosperous new year ahead. Thank you, and we look forward to your questions now. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while a question queue assembles. The first question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Yeah. Good morning, sir, and congratulations on a very good set of results. My first question is on the JSW Mahanadi PPA. If I see your slides, I think you are talking about the PPA which you are exploring. My question is, are you looking at the utility kind of PPA? I am asking the question because most of these discom PPAs are coming with the condition that you have to set up the capacity within the state, and we haven't heard anything about Chhattisgarh floating those kind of PPAs. Yeah.
Yes, Mohit. Thank you. See, I think when you are talking of Mahanadi, you are talking of the PPAs for the upcoming capacities.
Yes
is what we believe.
Yes.
Yeah. Okay. See, yes, definitely the project work is started, as we have said that the first unit is expected to be commissioned maybe in FY 2028 and balance two in FY 2029. And the way the demand scenario and the requirements which are coming in for the firm and reliable power, we are definitely There are many discoms who are looking for a firm power supply for a PPA, so we don't see that as a challenge going forward. Of course, when you talk of Chhattisgarh, it is only that the 5%, which is the free power, that is the commitment which is there for them available. But yes, we continue to explore the possibility of which states we have to go for. But yes, going forward, we will definitely be going for the power purchase agreements.
But if this scenario, because fortunately we have time now to take a decision, if this scenario of evening peaks, the way we are seeing the increase and the drivers which are responsible for this growth, especially during evening peaks is there, we may, because to even keep a part capacity open also for the merchant. But principally, our policy, as we said that we will be focusing on the long-term power purchase agreements remains as it is. The only advantage is that this is being close to the coal mine. With low fuel cost, the opportunity to take advantage may be a part of this capacity in the form merchant market also with short-term contracts. So we will take a call at the right time, but we are confident that selling this capacity will not be a problem because of the low fuel cost being close to the mine.
Understood. My second question is what explains the strong EBITDA for Utkal on QOQ basis? QOQ there is a sharp jump. Was there any one-off during the quarter?
No. One is that there is nothing. Maybe I'll request Mr. Prabhakar an and he will just-
Mohit, actually, if you see the last quarter, I think we are selling most of the capacities in the short term. They all were in the merchant. Now, from April onwards, as you are aware that we've kind of secured this long-term PPA, with Karnataka and also the Assam. So I think we are getting a better pricing in those this time, which anyway, that sums up the kind of entire, the Utkal portfolio profit being there.
But the jump is very high on a quarter-over-quarter basis. The last Q1 FY 2027, last quarter, I think
Yeah. So last quarter, as you are aware, I think we had the performance in terms of, you look at it, I think if you look at it, we were at about close to 82% of PLF this year, this quarter, wherein we had certain kind of operational issues, outages in the last quarter. So the performance of the plant have completely improved as compared to the last quarter, and that is why you will see that similar kind of the performance
Yeah.
Being more convenient.
Also to add, Mohit, what CP just said is as compared to Q1, quarter-on-quarter when we compare, because the plant availability was slightly lower than what it was in quarter two, though it was not impacting our fixed cost recovery under the power purchase agreements with Karnataka, the opportunity to sell in the merchant market was limited. That income was secured, but the opportunity which we were able to get with the better plant performance in quarter two as compared to quarter one gave us the opportunity for better financials through the merchant, which was additional for us.
Understood, sir. Thank you and all the best. Thank you.
Thank you. The next question is on the line of Sumit Kishore from Axis Capital. Please go ahead.
Good evening. My compliments on a strong quarterly performance and project execution. My first question is, in relation to your portfolio target of 30 GW by 2030, close to 3.7 GW of C&I, renewable and our utility capacity of 7-odd GW is there. What is the stage of readiness in terms of transmission, evacuation, and land for these projects to be commissioned over the next three, four years? After you commission 3 GW of RE this fiscal, given the challenges in the sector, how should we think about the phase-out of capacity addition through 2030 on renewable?
Yes, Sumit. Thank you. I think this is a very valid question related to the sector, not only JSW Energy. Yes, 3 GW current year and next year, as we have given the guidance that maybe 2.5 GW- 3 GW every year, that is on track. Our capacity addition beyond current year, current fiscal, say, for FY 2028 or beyond is basically we have divided our this thing into three categories. One is that the off-grid, which is the group captive requirement under the C&I, wherein my dependence on the grid or the grid curtailment, I am insulated from that. That is the significant capacity which is going to be there getting added every year. Second is intrastate connectivity, which is the STU connectivity within the state and through the STU network.
And third, which we have to remember, is that when we talk of curtailment we all know that we have a significant advantage of diversified locations across the country. The curtailment which we talk of, majorly the curtailment is in a particular Gujarat, Rajasthan sector on the northern grid. There we have limited capacities, and whatever curtailment we have faced is in this corridor only. Our three projects, out of which two are, as I said in my opening remarks, are going to get the grid network access when the new capacity is coming up for the grid power evacuation by this quarter end. I think what we have planned, after knowing what is the challenges which are coming in, our planning is insulated from any curtailment challenges. Wherever the challenges are, it is the battery energy storage which is going to play a role.
It will be a solar coupled with battery energy storage. Assuming that there can be some curtailment, then we get the opportunity to sell the power in the evening peaks. Keeping that thing in mind, we are absolutely certain that there will be no obstacle or hurdle in achieving our annual plan of whatever 2.5 GW-3 GW capacity addition every year, wherein wherever required, battery energy storage is going to play a major role so that capacity addition is sacrosanct. It is going to be there.
Sure. You spoke on firm, reliable power being the future and on Battery Energy Storage System. A couple of your peers in the sector have moved a bit faster, and they are even dabbling with the time shift arbitrage by selling that power in the evening. So your BESS plans as per portfolio is 3.2 GW h. How should we think about your BESS investments over this four-year period? Definitely, are you going to limit yourself to just this? Or it seems to be a much bigger opportunity. How do you think the arbitrage opportunity is going to fare over the next three, four years? Is it going to go away, or how will it sort of play out? Thanks.
Right. Sumit, if you compare that maybe someone else has moved faster, we have to see the difference in the model. I am getting the curtailment for which I have the plants which are commissioned and have a firm PPA which may get started the moment the connectivity comes. Maybe it can be six months or one year. Maybe the others who are doing this are having a large capacity commissioned with no PPA, which is there in sight. Basically I see that as a cost, the money which has been invested and not giving the desired returns. To protect that, I will not say a sunk cost, but to protect that losses, it is better, keeping in mind the evening peak, what are the prices which are being discovered and the demand, this is a very good step which has been taken.
For us, it is a very temporary phenomena. We also, as I told you, what we are doing is we applied six months, about eight months back for evening connectivity for our solar plants, which are already commissioned. We are also going to set up in the coming year. Now we are going to start the project work wherein we will be setting a solar capacity for charging the batteries and only using our existing connectivity for solar, which we have, for which we have got the sanction allocation for the evening discharge through the battery. We are also working on and we will be definitely commissioning. This battery, as you said, 3.2 GW h. All this is over and above that 3.2 GWh.
This is a dynamic situation, but we are working on this, and we definitely will be participating by setting up such model of projects and taking advantage of the evening peaks.
Thank you so much, and wish you all the best.
Thank you.
Thank you. A reminder to all the participants to press star and one to ask a question. The next question is from the line of Atul Tiwari from JPM. Please go ahead.
Yes, sir. Thanks a lot, and congratulations on a strong set of numbers. My question is on the merchant sale in the quarter. You did mention INR 6.9 realization. Would it be possible to share how many units were sold in the merchant in the quarter?
We have shared that in the slide. It is 1.1 billion units, which we have sold during the quarter, 1.1 billion. If you see in your presentation, slide number eight. Six.
Okay. Is this sales continuing in the third quarter? Do your bilateral contracts extend well into third quarter and the fourth quarter? What is the duration of those contracts, et cetera, any color?
Yes, definitely. Third quarter is fully booked. Maybe I will not comment on the pricing, but the pricing discovered may be either same or better than this, not lower than these for quarter three. The discussions are on for quarter four. Normally it is two months to three months. Normally 2.5 months back, before the people start. There are discussions going on even for quarter four, but quarter three is fully booked.
Okay, sir. On the fixed rate debt, you said 25% of the debt is at a fixed rate. What will be the tenor of these fixed rates? Is it for the duration of the life of the debt or only for some time?
Prabhakaran , please.
Yeah. I think if you look at it, of this 25%, we are saying that about close to 15%, which is Forex-linked ones, where it is fully kind of hedged both on the interest rate and also on the FX. I think that is in the range of about close to five to six years is the kind of the tenor that we have. On the balance is about the fixed when we say is about close to, because these are NCD, where that is also kind of about close to four to five years.
We are talking about on the 25% of fixed, the tenor approximately will be between five to six years.
Okay, thank you.
Thank you. Ladies and gentlemen, if you wish to ask a question you may press star and one. A reminder to all the participants to press star and one to ask a question. The next question is from the line of Vishal from PL Capital. Please go ahead.
Yeah. Thanks for the opportunity. Sir, regarding the BESS, I think one of your slide talks about that we will be commissioning 1 GW of BESS in FY 2027. Is this BESS linked with the PPA capacity that we have? Or are we preponing some of the BESS and we sell it plan to sell it in merchant? How one should look at this?
Yeah. This is all is the PPA capacity. This is under the PPA we are commissioning.
Okay.
These are majorly for two states, which is Rajasthan and the state of Kerala.
Got it. Another is, one of your-
These are all standalone BESS. Any investment in solar is not there.
Okay. Got it, sir. Just clarification. By FY 2030, we are planning to have 30 GW of capacity. That is our base case. In one of your slides, which is slide, I think, at the back, all the numbers are not there. Say slide 39, where we have given a breakup of our capacity, renewable, under construction, and MOU base. That totals to almost 27 GW. Similarly, we have done the same for thermal-based capacity, which is 11 GW of capacity, which is coming to, say, under construction and operational. This totals almost 37 GW, 38 GW of capacity. Is this a pipeline that we have?
Yes, this is a pipeline. I will give you the. Yes, this is a pipeline, yes. Because if you see, when we say 30 GW, we all know that the full work is going on, and we have signed 3.2 GW of power purchase agreement with the state of West Bengal and setting up a greenfield plant in Salboni. Out of that 30 GW, contains only 800 MW. Balance all 2.4 GW is beyond 30 GW. As I told in my opening statements also, the group captive requirements are going to go beyond 2030 also with the capacity plans of JSW Steel, which they have announced now, the growth plan. All those things are the pipelines which are beyond 30 GW and beyond 2030.
Okay. Maybe one last question. Regarding the renewable capacity, under construction capacity of almost 10.4 GW, what sort of PPA that we have right now out of this number?
See, we are doing this, all which is there under construction or at various stages of construction project execution is all under PPA, which is basically with utilities, with C&I customers, and group captive. All mixed, it is only the PPA. We are not investing anything or setting up any capacity till now for merchant. Of course, as I said sometime back to answering one of the questions, going forward, seeing the evening peak opportunity, putting up some solar capacity with battery, and only for evening peak sale through battery discharge is something which may get added, but right now it is all under PPA, which is out of it, 2 GW is under group captive.
Okay.
Which we are under discussion and that is going to get closed now.
Sure. In group captive, when we are doing any PPA, any threshold IRR that we work or ROE framework that we have when we do this arrangement?
See, as we have been saying that we will execute only, sign the PPAs or any projects, our benchmark returns are mid-teen IRRs. It has to meet that criteria and above that, then only we sign. So that statement remains. All our projects definitely have to be minimum mid-teen IRRs. And that is what in the group captive also we have.
Sure, sir. I think this explains a lot of query, sir. Thank you very much, and I will come back on the queue.
Thank you. The next question is from the line of Dhruv Muchhal from HDFC AMC. Please go ahead.
Yeah, sir. Thank you so much. Sir, you have shifted the KSK Mahanadi 1,200 MW from pipeline to under construction. Does it mean that you have placed the equipment order and also you are guiding the unit to commission by FY 2029? Although it is brownfield, it is a three-year commissioning that you are targeting.
Yeah.
I am just trying to understand, is this optimistic? Because generally what we see is four to five years, even for brownfield.
Yeah. No. Yes. One is that the equipment orders have been placed already, and we do not see any uncertainty because I have not spoken, but it is a local procurement only, and it is absolutely within the timelines. Second is the three-year timeline, when you see, we have to compare with a greenfield plant, which takes normally four and a half to five years. Here, there is lot of common infrastructure in the plant. I have been making this statement since acquisition in maybe March 2025, that lot of balance of plant areas are fully ready to handle 3.6 GW. Whether it is related to coal handling plant, whether it is related to ash handling plant, the railway infrastructure for coal transportation, or whether it is the transmission network. That all is already ready when we acquired for 3.6 GW.
This gives us a confidence of doing in three years. We do not see that as a challenge.
Got it. Sure. Sir, you have also now included group captive under advanced discussion of 2 GW. Specifically, you are mentioning this. How should we consider this? This happens within next three months, six months, and commissioning in two years or I am asking because this is not specifically included, so probably there is a better timeline now.
The thing is, as I said, that we have a clear visibility of 30 GW till FY 2030. Our group company, as we said, that they have also announced of a huge expansion, capacity additions, greenfield and brownfield, both. The requirements are going to be significantly high in terms of from the current level, the power requirement. This will go beyond 2030. When we say 30 GW, beyond that, the momentum will continue maybe at least next three to five years. Then that time, our major focus is going to be the thermal capacity and the RE capacity under the C&I and the group captive is going to be our focus beyond the current 30 GW plan which we have.
Got it. Sure. Sir, even in the solar and wind and hybrid space, the under construction pipeline space, we see a QOQ increase in the pipeline, and if I just check, most of the increase is coming from the C&I line item in hybrid or wind or solar. I believe these are third party C&I, because otherwise you classify them as group captive. Are you looking for more and more C&I kind of contracting? Is this the nature of customers that you are tapping?
Yes. That is our focus area now for maybe two, three reasons. One is that, of course, there is a complete energy transition even at the industry level also. Everyone has the RPO obligations to meet by 2030. Everyone is looking for a certain percentage of green power. We see this as a big opportunity. In terms of pricing and returns also, we find this more attractive because for the buyer also, this is a replacement cost benefit. It is a win-win for both and we are executing and maybe in this quarter, with the quarter gone by, we have commissioned the capacity for the cement company. We are doing more and maybe within this H2 of current year, the likes of Amazon and others, we are going to commission the capacities and the data center opportunities which are going forward coming.
We are in discussions with various organizations. Of course, yes, C&I, group captive, as I said, hydro pumped storage and thermal. These are the four pillars which are going to be there beyond 2030 visibility, which is there today in the bifurcation.
Got it. Sure, sir. The next thing is on KSK. If I look at the EBITDA, does this number INR 650 crores reflect the run rate now? I believe there was a tariff adjustment which was pending. Does this reflect it and this can be considered as a reasonable run rate or there should be some adjustment to this? There is a dip year-over-year, QOQ.
No, I think this kind of run rate EBITDA should be the base, basically. This should be the run rate EBITDA for the full year. I think that is how we should look at it.
Got you.
Even though we have a small kind of. Sorry?
I mean, this considers the adjustment to the tariff which has happened now. This is after the tariff adjustment.
Yes. Everything has been taken, yes.
There is a close to, in the overall, there is about close to 100 MW, 115 MW, which is being sold in the merchant market, which is anyway part of this.
Sure. Got it. This last thing, probably a suggestion. We will see more and more renewable capacity ramping up for you in terms of commissioning. But for us, there is no way to understand what economics they are coming at. Generally, what we see is we get either the gross block or the depreciation and the EBITDA run rate. You are able to map out, at least independently calculate what is the run rate or what is the economics of these new projects. But for you, it becomes very difficult, and given this will be more and more of your portfolio, it will help if you start disclosing those numbers. Otherwise, making sense of these numbers becomes a bit difficult. That was a suggestion.
We will take that.
Yeah. We will take that.
We are making a note of that and how we can address this.
Sure, sir. Thank you so much. Thanks and all the best.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Abhineet Anand from BNP Paribas. Please go ahead.
Yeah, just two questions. One, I think on merchant you specified INR 6.9 per unit for this quarter, and you said that 3 Q is at similar rate, right?
Similar or slightly better. It will not be lower than this. It will be better than this.
If you can help me with the net merchant capacity in the three plants that you have, which is KSK, Utkal and Maruti, right?
Okay. Capacity will be told. Maybe you can tell the capacity, but in terms of energy mix, if you see what we have sold in long term and short term through the merchant, which is 1.1 billion unit, it is almost 7% in energy terms. In capacity terms, it is about 4%.
Yeah. About 4%.
Okay. Second, on 75, when you said of the floating rate MCLR, that does go in sync with a lag, I understand. Let us assume we have had 25 basis point increase, another 50 comes up. Your rate, which is at 8.3% currently, does it go to 9% for FY 2028 if the overall rate hike in India happens by 75 basis point?
Normally, if you look at the last one year, when the RBI kind of decrease, the repo rate decrease happened, even though the RBI repo kind of decreased by about 100 basis points, the actual transmission which happened was only about 50 basis points. In some of the banks, it even kind of was restricted to the large banks, it was only about 30. We feel that-
Sorry to interrupt. We cannot hear you. Management line. We have lost your audio. Participants, please stay on the line while I connect the management line. Ladies and gentlemen, thanks for your patience. The management line has been connected.
Hello, sir.
Hi, Abhineet. Sorry for this. Sorry, sir.
Yeah. So Abhineet, I think what I was kind of referring to was, even though the repo kind of decreased in the last one year to close to 100 basis points, the actual transmission was not more than about 50. I think similarly, if you look at it, even assuming that, say, for example, another 75 happens, we are kind of foreseeing that basically not more than, say, 40 basis points should translate. If you look at it from a 40 and a 75% of it kind of looks like you're looking more like a 30 basis points kind of a number. With 8.28% and 30, it should be 8.58%.
But we are closely working with the banks and others to kind of refinance some of this, and I think at this point in time, we'll kind of look at not more than 850 is what we can look at.
Okay. Does this impact any new project that you have taken at a certain IRR?
I think that will be-
No.
Yeah.
No, it will not. The thing is the new projects, as we have been stating earlier, we make a conservative assumption of 9%.
For the life.
For the life of the project, for 25 years. We do not see any impact. If it goes beyond 9%, it may, but we do not see any impact on our ongoing projects. Even with the increase from a current level of 8.28% to 8.5%, we do not see any impact.
Thanks, sir. That's a great assumption in terminal. Thank you.
Thank you. The next question is from the line of Bharanidhar from Avendus. Please go ahead.
Yeah. Good evening. Am I audible?
Yes, sir. You're audible.
My first question is on the merchant capacity. Could you refresh regarding the capacity of the total merchant opportunity we have plant-wise, like how much it is from Utkal, how much it is in Vijayanagar, like that?
See, plant-wise, maybe we can give the numbers, you can note down. At KSK, we have close to 90 MW. Ratnagiri, we have close to 95 MW. Utkal, about 60 MW. Maruti, 64 MW. We have to remember that these are the capacities which are available for merchant and all are in thermal. Beyond this, when there are backdowns, at times it happens that there are backdowns, we get the opportunity to sell the same incremental quantum in the merchant. We have to remember one thing that this in capacity, as we have been saying, it is around close to 4% of our total portfolio is under merchant open capacity, but all being thermal. The overall portfolio is a mix of hydro, renewable, and thermal.
In energy terms, as you can see in the presentation which has been shared to you, selling 1.1 billion units we have sold in merchant, which is close to 7% of our total energy sold in the market.
That would be because of contribution from these outside the four capacities that you mentioned is also adding to that volumes.
No.
Sorry. What I meant to ask was, you mentioned four capacities totaling 300 MW selling in merchant. So you are telling the number of units why it is 7% because volumes
Sorry to interrupt you, sir. The management line has been dropped. Please stay on the line while I am connecting the management line. Thank you for your patience. The management line has been connected.
Yes. Actually, when we say that the backdown opportunities majorly are coming from these locations only, what I have mentioned during the daytime and domestic coal-based plants, which are basically low fuel cost, we get the opportunity to sell incremental quantity from these locations.
Okay.
But primarily, the numbers which I have given, those are the capacities which are available. Apart from some capacity in our hydro project in Karcham Wangtoo also, some merchant open capacity is available, which we have been selling also.
So a follow-up to that is that all these capacities are tied up on a one-month or a two-month basis, on a bilateral basis, is it?
One to three months.
Understood. My second question is pertaining to the run rate EBITDA of the portfolio which will be operational by end of FY 2027. How much will that be? I also want to find out what will be the net debt, according to you, by end of FY 2027, or indirectly, I am trying to guess how much will be the CapEx you will be doing in the next one to two years, and how much will be the net debt that will be there by end of FY 2027?
Okay.
I think we already kind of have given a CapEx add-on that we will do about INR 20,000 crores this year in FY 2027. Now, if you look at it, we have been also saying that we will have a cash accrual of about close to INR 6,500 crores, which we will have. As you are aware that we did a fundraising and some of the steel shares which happened, so both put together, we added another INR 7,150 crores. So these two put together is about close to INR 13,150 crores. Out of this, the balance is about INR 6,300 or INR 500. I think that is what you should add into basically your this one. It will be roughly about INR 32,000 crores is what we look at.
Okay. What about the run rate EBITDA?
Run rate EBITDA, I think normally we do not share that information.
Forward guidance normally we avoid, but yes, once the numbers are given in quarter four, that will give a significant guidance. You can assume that we have said that we will be adding 3 GW of capacity and that too in RE space, total organic, and 300 MW of acquisition, what we did in August, which has given in maybe half a year or slightly more than half a year, in terms of the EBITDA. So if we add three, we started the year with, say, 13.5 GW and adding three, another 16.5 GW, plus Maruti 16.8 GW. That is the start of the year. You can assume with the product mix, what we say, that you will get a fair idea of what it is going to be beyond FY 2027, the run rate EBITDA on a capacity of 16.7 GW- 16.8 GW operational by year-end.
Sure. No problem. Thank you so much. I will take it offline.
Yeah.
Thank you. The next question is from the line of Ishan Verma from Antique Stock Broking Limited. Please go ahead.
Thank you. Firstly, sir, what will be the CapEx per megawatt in total for the additional units at KSK Mahanadi? When can we expect the closure of the minority stake and annual reduction in the minority stake leakage?
See, as we have said that balance of plant in KSK Mahanadi has been ready, in the last earnings call also, I have mentioned about this, that the CapEx per megawatt for the capacity addition of 1.8 GW at Mahanadi plant will be significantly lower than the industry benchmark and that what you take. So it will be
The management line has been dropped. Please stay connected. Ladies and gentlemen, thank you for the patience. The management line has been connected.
When we say that the investment in Mahanadi expansion, doubling the capacity will be at least 25%-30% lower cost per megawatt CapEx as compared to the industry average. This I can tell you.
Got it, sir. Secondly, I think the West Bengal bid for additional thermal is being bought out and it is site-specific. Are we planning to bid for that as well?
No, we are not looking towards that. We have enough space there for a greenfield rather than having a shared resource with the government assets. What we have studied and what we have done, we found that there are many other more attractive opportunities in the country than even participating and investing in that. We are not participating in that.
Got it. Then lastly, sir, this Bhutan 920 MW project. If you could share some rough total project cost and expected timelines.
We are working. It is at a DPR stage. We have already signed the agreement with the Bhutan government. We are in the process of finalizing the joint venture company and the DPR work is on. Once all the details are ready, which is expected by June 2027, then only we will be in a better position to speak on the numbers.
Got it. Thank you. Those are my questions.
Thank you.
Thank you. We take that as the last question for the day. I would now like to hand the conference over to the management for the closing comments.
Right. Thank you very much, and once again, wish you all a very happy Diwali to you and all the family members and the New Year ahead. Thank you for being with us today. If any of you have any other questions, please connect with our IR team and we will be happy to take those up and answer your questions. Thank you very much.
On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us and you may now disconnect your line.