Ladies and gentlemen, good day, and welcome to the Q3 FY 2026 earnings conference call of Clean Max Enviro Energy Solutions Limited, hosted by Axis Capital. 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 comes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumit Kishore from Axis Capital to introduce Clean Max and its management. Thank you, and over to you, Mr. Kishore.
Thank you, Michelle. Good afternoon, ladies and gentlemen. On behalf of Axis Capital, it is my pleasure and privilege to welcome you all for the maiden conference call of Clean Max Enviro Energy Solutions Limited after its recent listing on the Indian bourses. Clean Max is India's largest pure-play Commercial and Industrial renewable energy company, with more than 15 years of operation. They have a mission to be a net zero partner for corporates. They supply renewable power and offer energy services and carbon credits to customers across data centers, AI and technology industries, and C&I enterprises across a range of conventional sectors. We have with us the management team of Clean Max, which is represented by Mr. Kuldeep Jain, Managing Director, and Mr. Nikunj Ghodawat as the Chief Financial Officer.
The call will start with a brief management discussion on the earnings performance for Q3, and nine months FY 2026, followed by an interactive Q&A session. Without further ado, let me hand over the proceedings to Kuldeep. Over to you, sir.
Thank you very much, guys. We've got a presentation here, which is coming up. All right, let's go next page. So there's a disclaimer statement here, and all our pronouncements and presentations are subject to it. We would urge you all to look at it. Next. The agenda is broken up into four parts today, and I'll take us through the first two, and my colleague, Nikunj, our CFO, will take us through the financial results section. So the key highlights, we've got five points to make. The first one is if we look at the results for the nine months ended December 2025, there's a 33% year-on-year growth in EBITDA. This is driven by two things. One is a 26% increase in power sales revenue growth. There's a revenue growth coupled with the margins have been better.
Our power sales EBITDA margins have risen from 81%- 83% due to operating leverage. The EBITDA, if you look at for the quarter itself, which is September to December 2025 versus September to December 2024, has increased 40% from INR 220 crores to INR 307 crores. On a nine-month basis, 33% growth, and on a one quarter to prior year same quarter basis, 40% growth in EBITDA. Second is our weighted average interest rates have fallen from 9.2% at the start of the fiscal to about 8.7% as of December 2025, and there is an increase in the reported profit after tax from INR 2 crores for the first nine months in the prior fiscal to about INR 20 crores for the first nine months in this fiscal.
The second point is, overall, we are a leader in India's C&I segment. We have 5,700 MW , or 5.7 GW of contracted where we have power purchase agreements in place of what is called RE Power Sales capacity, where we are going to sell the energy. That is 5.7 gigawatt of contracted RE Power Sales. This number has grown 300% in the last two years. So, 31st March 2024 it was 1.75 GW, now 5.7 GW. This is then comprised of two parts. Part one is how much of that we have already commissioned, which is the operational capacity of 3 GW. This represents, in capacity terms, a 76% increase over a year prior.
In addition, there is therefore another 2.7 GW, which we have already contracted but is under execution. This is all numbers for power sales business. Therefore, in the first 11 months of this fiscal, which is April 1 to 1st March 2026, we have commissioned about 1.3 GW of capacity. 1,300 MW of energy sales capacity has been commissioned in the first 11 months of this fiscal, which is 85% solar and 15% wind. Data and AI is a big part of our contracted volume. So about 42% of the 5.7 GW of renewable energy power sales is data and AI. In fact, the first 500 MW CTU connected plant in Bikaner to supply environmental energy offsets to technology customers has also been commissioned very recently.
Lastly, we have also operationalized a majority i.e. 51% CleanMax own partnership with Osaka Gas which has seen during the financial year an equity investment of INR 176 crores from Osaka Gas for a 49% stake in our joint venture together. These are just a few of the key highlights. I will now present some detailed pages to take us through some of this. On this page, I would like to make three points. First is we have a starting base of about 1.7 GW of operational energy sales capacity at the start of the financial year. We have added 1.3 GW to it, which represents about a 76% growth in terms of capacity added versus the base at the start. The second thing I would like to highlight here is we have many diverse growth sources across states.
Many states are now contributing to this, and as a result, the relative concentration has declined. Our top two states like Karnataka and Gujarat were, at the start of the fiscal, 68% of our capacity. By March 1st, they are now about 54% of the capacity. Also, the first CTU connected plant of 525 MW peak in Bikaner, Rajasthan stands commission. This page has a few highlights. One is if you look at the RE Power Sales, you look at the total contracting capacity, that has grown nearly three times from 1.7 GW as of March 31st, 2024 to 5.7 GW. About 4,000 megawatt expansion in slightly less than two years. About 2,000 megawatt a year is our sort of incremental contracting rate. Second, the bottom half of the page shows the RE Services business capacity.
This is where the customer owns the plant, and we have performed EPC and O&M for that C&I customer in our solar farm. There also the capacity numbers are provided, and therefore the total portfolio of contracted capacity is about 6.5 GW. The mix overall remains at 70% solar and 30% wind. I will take one slide to highlight some key facts from our financial results. First is EBITDA growth of 33% for the first nine months. When you look at this on a quarter versus corresponding quarter basis, it is about 40% growth. Second is this is driven by both revenue growth as well as higher EBITDA margins in both business segments. RE Power Sales segment, the EBITDA margins have grown from 81%- 83%, and RE Services segment also, the EBITDA margins have grown from 15%- 22%.
The last point I would like to highlight is in the bottom right-hand corner of this page, which is the reported PAT has grown from about INR 2 crores for the first nine months last, it is about INR 40 crores for the first nine months in this system. Next page. This capacity that we put up has to translate into run rate EBITDA, and this page seeks to explain both the run rate EBITDA as well as the corresponding net debt to that. All of you can look it up and understand. As of March 1st, 2026, so in the first 11 months of the fiscal, we have added about INR 650 crores of run rate EBITDA. This is an addition to the starting point, which was INR 1,140 crores of run rate EBITDA or represents a 57% growth in sort of the run rate EBITDA number.
The corresponding net debt figures to each of these capacity are also provided. The chart also shows some assumptions behind those. Some of key business updates in the subsequent pages. The first one is data and AI continues to be a big growth driver for us. It is 42% of our contracted capacity. Interestingly, this number has risen nearly 10 times, 10x growth, in slightly less than two financial years from March 31st, 2024 to about March 1st, 2026. We have added several new data and AI clients such as Iron Mountain, L&T Data, Princeton Digital Group, as well as more volumes for existing clients like STT Data Centres. Our conventional C&I customers have also grown. Non-data AI customers, which we call conventional customers, the contracted volumes with them have doubled in less than two financial years, which is big growth in itself.
We have had many repeat customers such as UltraTech, Apar, BSS, many others, as well as new customers such as Gujarat Alkalies and Chemicals Limited and CS, to just name a few. Let's look at the next page to understand a bit of a breakup of the contracting performance. Firstly, we have about 2.7 GW of RE Power Sales capacity, which is contracted as of 1st March and is under execution. So it's an indicator of future growth that 2.7 GW is contracted and under execution. Second point is that in just the first 11 months of this year, we have contracted an additional 1.3 GW of RE Power Sales capacity. The last point is the guidance that we are issuing as a management, that we believe we will put up about 1.5 GW of RE Power Sales capacity in the next fiscal.
On the right-hand side of the page, we are showing some of the drivers of this contracting business performance. First driver is that we continue to have high success with our existing base of clients. CleanMax has more than 580 clients, and every year, about three-fourths of our new volume growth comes from the same clients. So that's always a key business parameter for us. Second is our business is relatively unchanged in the sense that we serve the biggest and best corporates. So about 83% of the megawatts contracted are with double A, triple A power multinationals, 14% is with A-rated, so about 97% of our volumes are with A-rated or above. The receivable days continues to be at a very manageable number.
The last point is we've had strong contracting discipline and performance, so the tenure of the PPA continues to be high across, I think, nearly 1,200 power purchase agreements. The weighted average tenure is about 23 years. For the 2.7 GW that we have contracted and is under execution, the tariffs continues to be very respectable at INR 3.84. So that's some numbers on our contracting or sales performance. The next slide shows some numbers on our projects and execution performance, which I would like to take us through. First metric is: What is the capacity commission in the trailing 12 months? It is a good indicator of how we are going, and we intend to every quarter present the trailing 12 months capacity commission number. So that number, as of 1st March 2026, stood at about 1.3 GW of capacity commission in the trailing 12 months.
As you can see, this has consistently risen from about nearly 500 MW at the start of the financial year on our trailing 12 months capacity addition to about, as of 31st December, it's risen to 1.1 GW and now it's 1.3 GW. That indicates the organization's capacity to build and execute. The second number is have we built these projects within budget? At CleanMax, we are quite proud of our track record that when we go to the board for approvals of a certain capital expenditure in a project, we bring in the project at pretty much that or below cost. The first nine months of the current fiscal, which is the number on the extreme right-hand side here, we have built projects at 96.5% of the board approved CapEx expense. This is similar to our prior period performance as well.
It's not a flash in the pan. That number is very consistent across many years, indicating both conservative project cost underwriting as well as capable execution. The next point is what is the grid uptime, particularly with a lot of conversation in our industry around backdowns and curtailments and so on. Across our entire system, the grid uptime remains very high at above 99%. Last factor on operating performance is what is the PLF in the trailing 12 months. That is what we are showing here. We are showing the PLF on a trailing 12-month basis split across wind power plants, solar power plants, as well as hybrid power plants. These continue to be respectable. If anything, in the last 12 months, I think wind power has done particularly well. The wind season has been better than previously recorded.
The next slide highlights a little bit about our strategic partnership for continuing equity efficiency. Here we are discussing our partnership with Osaka Gas, and our joint venture is called Clean Max Osaka Renewable Energy. It's called CORE. We own 51%, and a subsidiary of Osaka Gas owns about 49%. Our intention is to create about 400 MW or more in this joint venture over three years. We have already received in the third quarter of FY 2026 equity contribution of INR 176 crores from Osaka Gas for their 49% stake. This does also add strategic value to us. It gives us access to Japan Bank for International Cooperation development finance, expands reach with global capital, and makes us more equity efficient in how we do our business. I will now hand over to my colleague, Nikunj, our CFO, to take us through some key financial results highlights. Thanks.
Thank you, Kuldeep. Good afternoon, everyone. Let me walk you through with our financial performance for the nine months. We are slide number 16. We've delivered a strong broad-based growth across all key metrics here. Revenue for the operation grew 29% year-over-year to INR 13,554 million in December 2025. EBITDA increased 33% to INR 9,448 million and reported PAT is INR 402 million from INR 22 million for the last nine months in period. The key performance driver are primarily three. One is capacity-led revenue growth. Because the growth is volume driven, the asset commissioned in last financial year have stabilized and generated the revenue. There is a 1.3 GW addition which has happened during the year, and that shall also ramp up and continue to add to the revenue. We also saw the EBITDA margin expansion for both our segments, which is RE Power and RE Services.
That's also the operating leverage gets reflected here. On the balance sheet side, the gross block and capital work in progress have seen significant growth that reflects the capacity addition and also the capacity which is under construction, which will also come up. The net debt, which is an important number here. What we have on the coming slide is a breakup, which gives a split between the operating asset net debt and under construction asset net debt. The one point which I'd like to call out here is that this net debt is on 31st December. It does not include the IPO proceed, so it's without that. Next, please. The slide is on our segmental performance, and our financials are reported primarily in two segments. One is the Power Sales segment and another is RE Services.
Our business continues to be anchored by the RE Power Sales segment, which contributes around 95%-93% of our EBITDA, and the revenue growth has been 26% for this segment, and EBITDA margin improved 81%-83%. Again, scale-driven operating leverage and gross margin for here remains stable at 90%-93% because it's a very stable business and it demonstrates the stable cash flow profile of the business. The RE Services segment, which contributes the 5%-7% of the overall EBITDA, but it's a services income for us and does not require any significant capital investment, and it is a very important offering from our customer perspective. We've seen a revenue growth of 40% here, and EBITDA margin also improved from 15%-22%.
The key takeaway for this slide is that the healthy growth and margin expansion across both the segment and RE Power Sales is high growth, high annuity business, and RE Services is an important customer offering, which gives us a services income on both annuity, O&M and EPC. The next slide, which is slide number 18. Here we are talking about our asset level breakdown performance. This just do a deeper look into the quality of earning and capital deployment. The RE Power Sales, which is a primary contributor of EBITDA, works such that we build today to earn the EBITDA in a following period. In the financial year, majority of the EBITDA typically comes from the capacity which we build at the start of the year.
Majority of the EBITDA, if you see in this slide, comes, which is INR 8,407 from the asset, which has been operational for more than a year and contributed to the EBITDA, and remaining is the breakup of the asset which is commissioned during the year. Similarly, the debt breakdown in the same fashion. The debt which has been against the operational projects, it just reflects that there is a stable cash flow behind it. The debt which is taken for the project which is commissioned, will eventually have the cash flow coming in, get serviced from that. Under construction debt, it primarily reflects the growth which will come. The next page is on the operating leverage and the cost efficiency. This slide highlight an important structural strength of our business, which is operating leverage for our RE Power Sales segment.
The key trend over time, if you see here, the gross margin remains stable. However, the EBITDA margin has improved from 75%- 83% between FY 2023 to December 2025, primarily driven by the operating leverage, because the SG&A cost does not increase at the same pace as the pace of growth in the EBITDA margin. This is an important takeaway from this. Hopefully the margin will continue to expand as we scale up, though it may be at a lower pace because we are already at 83% on the margin side. The last important page on the financial performance is the capital structure and cost of funding. This is one very important metrics in a capital-intensive business, as debt is an important part of overall capital structure for us to create the sustainable equity returns.
The cost of borrowing for us has gone down from 9.5% in March 2024 to now 8.7%. That is primarily driven by a couple of things. One is the continued improved credit profile, access to diversified funding and sources of funding in the lender base. Then another lever which exists in our business is that in a high growth portfolio, there is always some room for us to continuously refinance as the asset stabilize and bring the cost of debt. The other leverage metrics is debt to adjusted EBITDA, which remains healthy and reasonable at 4.8. The DSCR for stabilized asset at 1.4, which reflects that assets are performing better than what it was underwritten by the lender. Even the range is very healthy, and the long-term debt profile is also backed by the two-year long-term cash flows.
The debt is stable and self-sustaining and self-liquidating, and it is not dependent on any other levers but the project cash flows. Yep. Can we halt here and take questions?
Thank you very much, sir. We will now begin the question and answer session. Participants connected through audio call may please press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants connected on webcast may click on the Live Question tab. You may also type in your text questions on the Ask a Question tab available on the webcast. Participants are requested to use only hands up while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions at this time. You may also type in your text questions on Ask a Question tab. Also, you may click on the Live Question tab if you want to ask questions through Zoom.
We will take the first audio question from Puneet from HSBC. Please go ahead.
Yeah, thank you so much, and congratulations on your first call and good results as well. My first question is with respect to the potential upcoming ALMM for sales, which starts in June. How do you see traction on contracts beyond that in terms of tariff and commissioning intensity?
Puneet, till about for brownfield expansion in solar farm, we were offering pre-ALMM pricing, which is offering a COD till June 30th till about, I think end November or some contracts even as of December. Because if you have a brownfield expansion, you can actually commission it by June. Post January 1st, we have been offering revised and higher pricing to customers because the module price goes up, so obviously the offered tariff goes up. But we have seen continued traction with customers because the savings remains very compelling. The business case of the savings remains very compelling to customers. The second thing is, when people are buying wind solar hybrids, they are offset, and wind solar hybrid offerings are the norm in most of the large states. Large states being Maharashtra, Karnataka, Tamil Nadu and Gujarat, and those also continue to find good traction.
Like to like, what is the pricing up in terms of for solar?
I think about somewhere between eight, I think the numbers vary a little bit by state, but 7%-10%.
Seven to 10%. Okay, that's-
7%-10%.
Secondly, you talked about your 1.5 GW guidance. Can you also break it down, what is the CapEx you expect to spend next year and what should one assume the mix of wind and solar?
We haven't given that project-wise and technology-wise guidance right now. Let's examine if we provide that.
Okay. In terms of SG&A trend, it is very interesting to see it has fallen to almost 10.3%. How should one think about this trajectory into next one and two years?
We currently have on RE Power sales an EBITDA margin of about 83%. I think the operating leverage benefit, we should see it continue to improve or rise as a margin percentage.
Okay.
I could be slightly wrong, but I think it goes up to 85%-86% in two to three years from today.
Okay. That is very interesting. That is all from my side. Thank you so much and all the best.
Thank you.
Thank you. A reminder to all the participants that you may please press star and one to ask audio questions. You may also type in your text questions on the Ask a Question tab. If you are connected on the webcast, please click on the Live Question tab if you have questions. We will take the next text question from Sagar Sanghvi from ADG Capital, and the questions are: debt breakup, operational and under construction of the INR 1 billion of debt outstanding. The second question is: how much debt will be required for 1.5 GW to be operational in FY 2027 and another 1.2 GW in FY 2028? What would be total debt for FY 2027 and FY 2028?
Sagar, hi. Thanks so much for joining us. We are not giving debt forecasts by financial year and so on, but I would point us again to page 18 of the presentation. To answer the first part of your question, Sagar, what we have shown in this page is the breakup of both EBITDA and corresponding debt. If you look at the lower half of the page as of 31st December 2025 balance sheet, about 4,688 crores of net debt is for projects which are operational for greater than a year. Another 1,781 crores is for projects which essentially commission during the financial year. Another 1,739 crores of debt is for under-construction assets which have not had any corresponding EBITDA. About 1,490 crores is a sort of corporate loan that we have, which is not tied to any specific project.
That is the breakup of the total net debt as of 31st December.
Thank you, sir. We'll take the next question from Sagnik Dey. Please unmute yourself, introduce yourself and proceed with the question, sir. Mr. Sagnik Dey? Sir, the participant has left the queue. We'll move on to the next question.
Sure.
Yeah. The next text question is from Bharat Devara. He's a retail investor, and the question is: "The CapEx EBITDA matrix of 5.8 versus industry of 7.x seems very stark. Can you explain what CleanMax is doing differently here? CapEx is 98% hard cost. Is CleanMax procuring modules and turbines at such a steep discount?
Sir, two parts. One is you are right, our CapEx to EBITDA ratio is superior to the rest of the industry. Primarily driven from the fact that because we go directly to the end customer, it's more like the difference between a retail and a wholesale business. Compared to other renewable energy companies which participate in a reverse auction with government discounts or SECI and so on, where price is the sole determinant of bid winning. Our tariffs tend to be higher in my analogy of being a retail direct to customer model. And tariffs for assets commissioned in the first nine months of the fiscal was about INR 3.6. And tariff for 2.7 GW contracted under execution as of first March is about INR 3.8. Our tariffs are higher than industry average, which is really the primary determinant of this.
But of course, it's not just tariffs. You have to couple it with extremely efficient project execution and implementation in a very granular business. That also we have learned to do well over the last 15 years. Thank you for joining.
Thank you, sir. We will take the next question, which is a text question from Parth Thakkar from Moon Capital, and the question is: "The annual EBITDA run rate of INR 1,795 crore is for current 3 GW of operational capacity, right? What does the annual EBITDA run rate look like once you have 2.7 GW of RE Power Sales goes into the operational capacity which is under execution?
Parth, thank you so much for joining and for being an investor in CleanMax. We are providing a guidance for next year's capacity addition, but honestly, we are not providing the corresponding EBITDA run rate and debt guidance at this point.
However, we have provided certain unit economics on page nine in our investor letter.
Yeah.
If that is some way to calculate for you, that can be used.
We have provided the EBITDA for megawatt and so on, and the debt to EBITDA ratio. All the information you ask for, honestly, you can triangulate and estimate.
Even the split of solar and wind is provided.
Yeah.
Thank you, sir. We will take the next question, which is an audio question from Shaunak Udgikar from SBI Life Insurance. Please proceed.
Hello, sir . Hello.
Hi, Shaunak.
Hi, sir.
Hi, Shaunak.
Yeah. I was looking at the presentation where we have given nine months generation data. Is it possible to provide us with the quarterly data, maybe from Q3 FY 2025 till Q3 FY 2026? The total generation data.
Very fair ask, Shaunak. I don't have it readily available on me, but maybe we will provide that in due course on our website. I think that's a very fair ask, and we'll provide that on a continued basis every quarter in terms of million units of generation. Thank you for giving us that suggestion.
Okay. Sir, one more question. Just wanted to understand why COD capacity addition is around 1.3 GW. So what could be the total capacity additions for this year? Earlier, of course, the total capacity addition for FY 2027 was around 1.49 GW, and 2028 was a bit more than 1.5 GW. So has it trimmed the capacity addition guidance for 2028 to 1.2 GW?
We are not giving any guidance for 2028, Shaunak. Because in our business it's pragmatic to only give a guidance for one year forward at a time is what we felt. Because there's a lot of contracting, so many other moving parts in project execution. Therefore, we've said we will build and commission upward of 1.5 GW in fiscal 2026, 2027. That's the guidance we have given. Right? What we maintain is we have seen tremendous increase in the organization's capacity to deliver new RE Power Sales capacities. As you remember, if we go back to the start of this financial year, which is April 2025, at that point, if we stood and looked back trailing 12 months, the capacity installed was about 500 megawatts. However, if we stand on 1st March 2026 and look back trailing 12 months, capacity added is 1.3 GW.
From 500 MW trailing 12-month capacity addition to 1.3 GW, that's a huge jump. We are forecasting or guiding to a capacity addition north of 1.5 GW for next financial year.
Okay. Thanks a lot, sir.
Thank you. We'll take the next audio question from Dhruv Muchhal from HDFC Mutual Fund. Please go ahead.
Yes, sir. Thank you so much. Sir, firstly, I would like to appreciate the shareholder letter. I think it captures the nuance in the business very well, and I hope other companies also do this given the differentiation in these businesses. Firstly, the question is timely one on the execution. We have done probably well, given the pace of execution. Next year, expecting about 1.5 GW. Given whatever we hear in the industry about transmission land, wind execution challenges, how comfortable or how confident are you on this execution target? Also, if you could probably give some comments about what drives this confidence. Probably transmission availability, land availability, and stuff like that, please. Thanks.
Yeah. Thank you so much, Dhruv, for your question and your appreciation. The shareholders letter took a lot of work over the weekend from all of us, so it obviously is nice to be appreciated. Thank you for that. In terms of our confidence on this guidance of 1.5 GW, as it stands, that confidence is quite high because of a few factors. Firstly, this is disaggregated across 9- 10 different projects across eight to nine states. So there's a diversification of that risk. In that 1.5 GW, about, I would think 500 MW is CTU connected, where some of these transmission bottleneck challenges have been more acute. The remainder 1 GW is STU connected or on-site solar, where these challenges are typically not there because STUs give you evacuation capacity only once their plant is already ready.
That's one point on the transmission aspect. Second is, as per our internal assessments, about 70%-80% of the land required for the capacities we are adding next fiscal is already acquired by us, and we are well on our path to acquire the rest, and construction is underway at all of these sites. That gives us the confidence. Coupled with the fact that this year already we have demonstrated organizational capability and ability to deliver at that scale by, as you saw already, 1.3 GW is added. Therefore, we are reasonably confident of delivering at a minimum 1,500 MG of RE Power Sales capacity for next fiscal.
Just one more point, Dhruv, is that now there's a lot of brownfield capacity which we added. The farm already exists. The customer new contract gets signed, and we add to the same farm.
Yeah.
There also there is significant de-risk upfront happening at the construction level.
Thank you, Dhruv.
Sir, thanks. Thanks so much, and I hope you maintain the disclosure level, and I hope it becomes a benchmark for you and others. Thanks. Thanks so much.
Thank you, Dhruv.
Thank you. The next question is from Nishant Chandra from Temasek. Please go ahead.
Hey. Hi. Thanks for taking my question. On page 32, there is this thing on greenhouse gas reporting. Is that the electricity generation that the other gentleman was looking for, or that is different? Which is a quarterly units generated thing.
No, I think this is tons of CO2 emission from electricity generation and so on. I wouldn't say that this is generation data.
Oh, this is not units, is it? Oh, okay. Got it.
It's not kWh, Nishant. This is standard disclosure format for GRI reporting on sustainability. While we didn't present it in our opening comments, we do provide it as disclosure for investors.
Got it. The first line is electricity generation mean production unit. What units is this, actually?
It's CO2.
This is CO2 reduction in tons due to electricity generation activity.
Oh, okay.
Nishant checked here.
Sure. Okay, fine. I can check offline. Yeah, no worries.
Thank you so much, Nishant and Temasek, for your investment in CleanMax.
Thank you, sir. We will take the next question from Mihir Manohar from Trust Mutual Fund. Please go ahead.
Yeah. Hi. Thanks for giving the opportunity, and congratulations on great set of numbers. Sir, largely wanted to understand on the data center side. When we see over the last two years, 80%-90% of the growth has come from data center side. So how does it work? Are they getting for carbon offset? If you can give the operational understanding over here for global data centers as to how does this business work. They purchase over here, they get the credits, some clarity on that.
Mihir, thank you. You are right, data center business for us has grown a lot. It has grown 10 times and now represents about 42% of our contracted capacity. About 2.4 GW out of our 5.7 GW energy sale capacity is contracted for data and AI customers. This is of two types. First is direct supply of electricity for other, electricity supply for consumption in a data center located physically in a state in India. We have dozens of clients in that. About a third of the data and AI business is of that type, or energy supply for data center located in India, is about a third of the data and AI business.
The two-thirds of the data and AI business is what are called Environmental Attribute Purchase Agreements, EAPAs, where the energy is not being physically consumed by a big tech, but they are paying us for the full value of the electricity. For instance, we may have a contract that you commission the solar plant for us, say, in Bikaner, CTU connected, and we guarantee you a revenue of INR 3.4 per unit of electricity. Practically, how does it get implemented, Mihir, is the following. Every day we generate electricity and sell it on the IEX, as ground power. We receive the revenue we receive from the market. Let us assume in an illustrative example, that revenue was INR 2 per unit for the entire month. Our guaranteed revenue is 3.4.
Then the global big tech who has signed the EAPA with us will give us the difference between the assured revenue, which is INR 3.4 per unit of electricity, and the received revenue, which is INR 2 per unit of electricity, which is INR 1.4 is what we will receive from them. Therefore, the revenue we make at the end of the calendar month is INR 3.4. Similarly, in this, almost always the agreement states that if we receive higher, in a month it could be higher. We may make INR 4 for sale of the power. We will then give them the difference. So 4- 3.4 in my illustrative example is what we will give to them. That is how practically this contract works. Commercially, though, I would like to highlight that this is very similar to a standard power purchase agreement from commercial assets.
Namely, one, it is a long-term, 25-year agreement with a high quality counterpart. Two, for us as a generator of electricity, our tariff is known and fixed over the next 25 years. Yes, that tariff is received as a sum of two parts. A, being the revenue received from selling the power as ground power on the energy exchange, and B, being any delta compensation we receive from the buyer, the big tech with whom we have such a deal. But it is a firm known revenue over a 25-year contract period with a high quality, credit worthy off-taker. This is how the EAPA contracts work. Again to summarize, data and AI is now 42% of our contracted capacity.
About a third or slightly more than a third of this volume is direct supply of electricity to data centers physically located in India, and two-thirds are in the nature of the EAPA contracts, which I described in slightly more detail. Thank you, Mihir, and thank you for your investment in CleanMax.
This, and China adds 250, 300 GW of solar every year. Why does this C&I offset business come to India and not to China?
There are a couple of distinct reasons for that. One of them is that people look at the cost per ton of carbon avoided. India has two, three, four things going for it. One is, of course, low cost of renewables. Second is a coal-heavy grid, so the carbon intensity of the offset is much more than you would enjoy, say, in China or Europe. Third is that the contracting structure, contracting discipline, and welcomeness of big tech in India is a lot more than they find in China. All of them are doing this kind of business in India.
Understood. Sure. I have just two questions. Is that good?
Yeah, please go ahead.
Yeah, sure. In a case, let's say we have tied up the capacity, we have entered into agreement. If there is delay in putting up the capacity because of, let's say, transmission evacuation not being provided by the respective agency, then how does the risk and who will bear the risk? How does it work over here if sufficient transmission evacuation capacity is not available? That was the first question. Second was on the cross-subsidy surcharge. I mean, our tariff is INR 4.25 versus industrial tariffs at INR 7-INR 8 for the grid-based tariffs. Now, this draft Electricity Amendment Bill is proposing removal of cross-subsidy surcharge. This is quite an ideal process over there, idealistic scenario. Let's say if that goes through, then what kind of risk do we have if that goes through?
Thank you, Mihir, for those questions. What was the first one?
The first one was, if the sufficient transmission evacuation capacity doesn't come up.
Yeah.
Then we have entered into a contract already. How will it
Thank you. In most of our, we have 1,300 contracts, so you have to appreciate that every contract might be slightly different. But for almost all our contracts, if the grid does not connect, we would be able to declare that as a force majeure and not be subject to LD. That's not a happy event because we want to actually connect and start selling the power. But there is no double whammy typically that we would face as a result of that. That's point number one. Second is, we have, by the way, Mihir, in the shareholders letter, an entire section on various regulatory risks, and we've done a fair bit of analysis and so on that. You highlighted one, which is what if cross-subsidy surcharge goes away.
There are also certain proposed other potential changes to banking norms that the grid and the government, I think, will largely in a few years move to a regime where if you have given solar power during daytime, you cannot possibly be allowed to use that daytime solar power in nighttime. Also then the daytime solar power will be cheaper than evening peak power, and all of those also proposed guidelines. We've run all of those analyses, Mihir, and estimated that even if all of those events were to occur, then the maximum EBITDA risk to CleanMax on the 3 GW of contracted capacity is about 1.5% of our EBITDA.
I've provided the high level highlight, but I would also urge you to look at the shareholders letter, which contains the details of why the impacts of all of these regulatory changes put together, if they happen, when they happen, is so limited.
Sure, sir. Definitely, I will go through that. Thank you very much. That was very helpful, sir. Thank you very much.
Thank you, Mihir.
Thank you. We will take the next question from Aakash Mehta from Canara HSBC Life Insurance. Please go ahead.
Yeah. Hi, sir. Just wanted to confirm one thing. In terms of the upcoming capacity, we have about 2.7 GW. That is where the PPA have been signed. Is there any other capacity that is there, like a pipeline capacity that other companies usually report? Or as and when we conclude the PPA, we will probably add it to the 2.7 number.
So there are two aspects to this. First is the power transmission capacity pipeline, which has got nothing to do with customers, but it just talks about what evacuation we have available with us. If you look at the bottom half of this page, this is power evacuation capacity that we have. So firm evacuation that we already possess, which is yet to be contracted with customers. I will again repeat. The firm evacuation, which is yet to be contracted with customers, stands at 3.1 gigawatt for us as of March 1st, 2026. Evacuation applied for, which is not yet being given on a firm basis, is about 1.6 GW. So both two put together, you could say 4.7 GW of sort of evacuation pipeline. Your question, though, was slightly different. Your question was more around the sales pipeline.
And there we hesitate from trying to give sales pipeline numbers in terms of how many deals are under discussions or how many client calls we are making. Because honestly, our sales efforts are so broad-based. We have 570 clients. We have more than 50 BD executives. In a year, we sign about 100 new deals, which means at any point there are 200- 400 conversations and pipeline discussions going on. So honestly, to report those numbers in any credible, auditable way is very hard. Therefore, we refrain from that. Once it is done, which means we have signed and contracted something, that is when we count it as contracted capacity.
Sure, sir. That is quite helpful. But it does not work like an LOA because it is C&I, right? Otherwise you can just mention it is LOA and this is a pipeline.
Yeah, it does not work like that because in the SECI system, there is an LOA with SECI, which may or may not translate into a PPA with a DISCOM. Ours is, we sign directly with the end customer. So once we sign, we do it. Look, our average group captive volume is 13 MW. So the pipeline keeps delivering every quarter, and it is not lumpy. What you will see on an ongoing basis is we will keep reporting our contracted capacity every quarter. Every quarter, it will keep going up. Even if you look at our DRHP or our updated DRHP we filed just prior to the IPO, that also gave pipeline contracted capacity numbers as of April 1st, as of July 31st, as of October 30th, and so on. So you can see that every quarter there is a steady, consistent growth in the contracted capacity.
Sure. Okay, I got it. My second question is on the land bit. Evacuation, I think we are way ahead in terms of what we have to do in terms of the contracted capacity, and we have the evacuation available for the upcoming capacities as well whenever we close the contracts. For land, we just have 70%-80% of the land acquired for the upcoming capacity. Is the only reason that because the parcels of land are small and it takes time to acquire land in bits and pieces? Are there any other reason for the standing 70%-80% or next steps?
Rather than a range bound, I just rechecked with my team. We have slightly upwards of 80% of the land already in place, and we last monitored this, I think, around mid to end February. The reason this is never fully 100% is, as in 12 months before commissioning is never fully 100% in our kind of business, is that the average land holding per farmer in India is about four acres, which is enough for about one and a half megawatt peak of solar. There are a lot of land deals which you have to do, so that 80 will gradually keep getting filled up in the next one or two quarters.
The capacity estimate is really till March 2027, but you would have 100% of the land in place for the capacity you're building in March 2027, latest by September 2026. That's how our business is.
Sure. That's quite helpful. Those were the questions from my side. Thank you.
Thank you.
Thank you. We will take the next question from Puneet Gulati from HSBC. Please go ahead.
Yeah. Thank you for the follow-up opportunity. My first question is on your 1 GW contracted pipeline potential capacity addition that you will do for FY 2027. Which are the big states there, and what should one be assuming as rough quantity there?
The guidance, Puneet, is 1.5 GW of additional RE Power Sales capacity in FY 2026, 2027.
Yeah.
Out of that, maybe half a gigawatt is CTU connected, wind project, which we are building in the state of Karnataka.
Yeah.
The remainder is 1 GW of RE Power Sales capacity, which is really for non-CTU. The four biggest states for us, Puneet, are really Gujarat, Karnataka, Maharashtra and Tamil Nadu. These are also the top four states in India in terms of industrial GDP, and these are huge markets. That is why these are big states. We would expect these four states to be a bulk of that. But also growth will come from states like Haryana and Andhra Pradesh in addition to these big four.
Yes.
Rajasthan also possibly.
In your letter, you also talked about connectivity issues for especially the CTU project, 525 MW. What is the status there and also for the balance, 500 MW that you will commission in FY 2026? If you can update on the status of connectivity there as well.
The becoming to connectivity status update that we have from CTU and their estimate is that the grid itself is connected, the substation is connected, but there are transmission bottlenecks more north of the substation, which are causing some back down issues. They estimate that somewhere in the quarter between October to December 2026 is by when they expect to resolve the same. But this is a matter outside our sphere of control.
Yeah.
That is on the 525 MW in Bikaner 2.
You have a PGCIL there at this time, correct?
Yeah. That standard process would apply.
Yeah. Okay.
The CTU connected plant we are intending to commission in this fiscal is about 450 MW of wind coupled with, I think, about 110 or 100 odd MW peak of solar in Karnataka. There the grid expects, I think, our CTU connectivity is I think we should think about it as December 2026 is our estimate.
Okay. That is it. Thank you so much, and all the best.
Thank you.
Thank you. We will take the next question from Bharat Devara, a retail investor. It is a follow-up question, and the question is: Would it be fair to assume from your response on CapEx to EBITDA that our company's CapEx is the same as utility-scale peers, but our tariff is at a 30% premium, essentially leading to the industry-leading CE? Would this lead to more competition going forward with utility peers moving to C&I?
Thank you, Bharat, for the question. I think your understanding is incredibly correct. We have always been a very competitive industry. If you looked at our DRHP, the industry reports suggest that we are the number one player in India with a 12% all-India market share, and therefore it does indicate that there is a fair bit of competition in this industry. What I can also note is that over the last few years, we have never seen unit economics worsen. Unit economics essentially represent the economic metrics of making every new investment in a power plant. Capital costs of solar and wind power have come down, and as a result, tariffs may have fallen slightly.
Return metrics such as ROI, ROE, equity IRR, equity payback, CapEx to EBITDA ratio, or any other such ratio that we look at have stayed the same or marginally improved over time. That is what we have found. As an example, our equity payback for all assets built in financial year 2022, 2023, 2024, and 2024, 2025, was around 2.5 years. In comparison, equity payback for assets built in the lifetime of CleanMax was around 3.4 years. As you can see, equity returns have not worsened for us, have only marginally improved. Coupled with great unit economics, coupled with substantial scale now coming because of the growth of the C&I industry and our own performance within it, have led to improved financial metrics all around.
Thank you, sir. The next question is from Siddhant Jain from Kotak Securities, and the question is: Can you share the breakup of capacity under hybrid? Also, I was calculating the generation even using previous period capacity and DC PLFs given on slide 23. It was coming to be quite higher. Can you share how to go about this?
There is a slide 23, which has the capacity commission as the PLF in the different time periods, which we can pull up. Those PLFs are therefore provided in our database with both wind, solar, and hybrid. As you can see at the bottom half of the page, we have the PLF capacities provided. For the first nine months and the corresponding nine-month period as well, those are provided.
Okay.
By the way, this generation is also there. Sorry, there was a question earlier also on units generated and exported. This is there on page 23 of the deck. I acknowledge, though, to the participant who pointed it out previously that that data is not split on a quarter-by-quarter basis. Going forward, we will draw it.
Thank you, sir. We will take the next audio question from Nishant Chandra from Temasek. Please go ahead.
Hi. Just one follow-up question. This is on CapEx creditors and how we deal with that in terms of linked capitalization. For the point in as of December, what are the CapEx creditor positions for the company?
Nishant, allow me to just get the exact number.
Sure. Yeah. The other one is on run rate net debt as of March 1st. How do you calculate that? Because some of the debt drawdown would have also gone towards CWIP, right? Is it then apples to apples comparing the run rate net debt versus the run rate EBITDA?
For the capacity, there are two ways to look at it. One is that what is the capacities which is built and operating, and what is the debt against that given. Second is the unit economics basis. If you look at it, we've been maintaining around 5.5 run rate net debt to EBITDA on a basis. That's the other way to look at it. Yeah, Nishant, to answer your specific question. In our business, that is never strictly triangulatable off balance sheet-
Yeah.
All analysts and investors, such as yourselves, need it. Right? Therefore, what we do is, don't just look at the drawn-down debt as on that day, because we may have-
Yeah.
-commissioned a certain capacity. But very often in our business, we only draw down that debt as and when required to pay off the CapEx creditors.
Oh, okay.
Right. Therefore, there was merit in providing for the benefit of investors like yourselves both numbers, which is run rate EBITDA as well as corresponding run rate net debt, so that any way you want to then use it for your own analysis, that, "Oh, how do I think about EBITDA multiples?" Then what then to subtract from that. You should have that corresponding number. That's the purpose of providing that.
Fair point. Because in my mind, I was also then to the extent of value attributable to the CWIP, because that is the investment that has gone into the company without generating anything, but it is likely to accrue value in the next 12 months or so. So I was trying to understand how to offset it against this net debt number.
Yeah. I think you'll just have to subtract it.
Yeah, that's fine.
-and think about.
Yeah. That's right.
Yeah.
Yeah.
Yeah.
Thank you. We will take the next question from A. Pradeep from Vedanta, and the question is: Since the proceeds from IPO is being used for repayment of borrowings or exit of current investors or general corporate purpose, what are your plans for equity contribution for your upcoming projects? Any QIPs, et cetera?
We have no intention of a QIP, to answer that very specific question, and we believe that we should be well-funded for continued high growth over the next three years. I will not say no QIP forever, but certainly, I think we would like to assure everyone that at current or even slightly higher rates of growth, we are well equity funded on an overall balance sheet level, along with all the strategic partnerships that we have for continued high growth over the next three financial years at a minimum. Of course, as any other business would, we will keep assessing that statement and that equity requirement on an annual basis and advising investors accordingly.
Thank you, sir. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. Sumit Kishore for closing comments. Thank you, and over to you.
On behalf of Axis Capital, I would like to thank Kuldeep sir and Nikunj for giving us the opportunity to host the CleanMax maiden analyst conference call. Over to you, Kuldeep, for any last comments. Thank you.
We wanted to say a big thanks for everyone who has joined and asked questions and so on. Thank you everyone for investing in CleanMax and spending your time to evaluate potential further investment in us. This was, for us in our life, our first-ever analyst call. Maybe you guys do it every day, but for us, it was a first experience. Therefore, if there is any feedback you all have in terms of how we can improve, how we can share better information, or even just how we presented, we would really value it. Please do not hesitate to share that with us over the coming periods of time. Thank you.
Thank you, members of the management. Ladies and gentlemen, on behalf of Axis Capital and CleanMax, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.