Ladies and gentlemen, good day, and welcome to the NTPC Limited Q2 FY23 earnings conference call, hosted by BNK Securities. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Majumdar from BNK Securities. Thank you, and over to you, sir.
Thank you, and good evening, everyone. We are presenting today the Q2 FY 2024 conference of NTPC Limited. The company is represented by Sri Jaikumar Srinivasan, Director of Finance, Sri Dillip Kumar Patel, Director of Human Resources, Sri Ramesh Babu V., Director of Operations, Sri Ujjwal Kanti Bhattacharya, Director Projects, and Sri Shivam Srivastava, Director Fuel. Congratulations, sir, on a good set of numbers. Without much ado, let us start with the opening comments from the management. Over to you, sir.
Thank you. Very good evening to all the participants. On behalf of NTPC, I, Jaikumar Srinivasan, Director (Finance), welcome all of you to the Q2 FY 2024 conference call of NTPC Limited. I repeat, I have with me Sri Dillip Kumar Patel, Director (HR), Sri Ramesh Babu V., Director (Operations), Sri Ujjwal Kanti Bhattacharya, Director (Projects), and Sri Shivam Srivastava, Director (Fuel). I also have with me other key members of, uh, NTPC team. Today, the company has announced unaudited financial results for Q2 FY 2024, along with half-yearly results of financial year 2024. The key performance highlights for the quarter and the half year ended 30 September 2023 have already been disclosed on the- NTPC has recorded yet another remarkable quarter with a strong operational and financial performance. We have made significant progress on various strategic initiatives, including renewables.
Regarding operational highlights for Q2 and H1 FY 2023, during H1 FY 2024, NTPC has added 1,570 MW commercial capacity to its portfolio, out of which a capacity of 110 MW was added from the renewable sources. As on 30 September 2023, the commercial capacity of NTPC stands at 57,838 MW on a standalone basis and 73,824 MW for the group as a whole. NTPC group generated 212 billion units in H1 FY 2024, as compared to 204 BU in H1 FY 2023, an increase of 4%. NTPC standalone gross generation in H1 FY 2024 is 179 BU, as compared to 176 BU in corresponding previous period.
During H1 FY 2024, PLF of the coal stations of NTPC was 76.62%, as against the national average of 68.75%. For H1 financial year 2024, three coal stations of NTPC group, which are Rihand, Singrauli, and Bhilai, were among the top ten performing stations in the country in terms of plant load factors. During the H1 financial year 2024, there has been lower generation due to grid restrictions of 46 billion units, against 40 billion units in the corresponding previous year. There was a negligible generation lost due to fuel supply, against 2 billion units in the corresponding period of the previous year. Regarding the status of fuel supply, during H1 FY 2024, materialization of coal against annual contracted quantity, ACQ, was 95.80%, as against 99.93% in the corresponding previous period.
Coal supply during H1 financial year 2024 was 113 million metric tons, including 4 million metric tons of import coal. The coal supply during the corresponding previous period was 112 million metric tons, including 10 MMT of imported coal. NTPC has registered highest ever coal production of 16.06 million metric tons in H1 FY 2024, with growth of over 83%, as against 8.76 MMT in H1 FY 2023. Cumulative expenditure of INR 10,095.34 crore has been incurred on the development of coal mines till 30 September 2023. Now, I'll update some of the financial activities of the company.
Total income for Q2 financial year 2024 is INR 41,517.87 crore, as against INR 41,810.96 crore in the corresponding quarter of the previous year. On a half yearly basis, the total income in H1 FY 2024 is INR 81,198.56 crore, as compared to INR 81,536.63 crore in H1 financial year 2023. Profit after tax for Q2 FY 2024 is INR 3,885.01 crore, as against INR 3,331.20 crore in the corresponding quarter of previous year, registering an increase of 16.60%.
On a half yearly basis, PAT is INR 7,951.05 crore, as against INR 7,048.16 crore in H1 FY 2023, registering an increase of 12.81%. Total income of the group for H1 FY 2024 is INR 88,774.66 crore, as against INR 88,242.22 crore in the corresponding previous period. Profit after tax for group for H1 FY 2024 is INR 9,633.53 crore, as against the corresponding period, previous period of PAT of INR 7,395.44 crore, registering an increase of 30.26%.
During H1 FY 2024, our subsidiaries have earned a profit of INR 1,117.36 crore, as compared to INR 867.65 crore in the corresponding period of previous year, registering an increase of 28.78%. NTPC's share of profit in JV has increased from INR 120.57 crore in H1 FY 2023 to INR 1,082.25 crore in H1 FY 2024. During H1 FY 2024, we have accounted dividend income of INR 549.98 crore, as against INR 640.94 crore during H1 FY 2023. The regulated equity of NTPC as on 30th September 2023 was INR 81,498 crore on a standalone basis and INR 98,050 crore on a group basis.
As regards funds mobilization, in the current quarter, NTPC has signed term loan agreement of INR 5,000 crore with HDFC Bank. Average cost of borrowings during H1 FY 2024 is 6.67%, as compared to 6.22% in H1 FY 2023. Regarding capital expenditure, in H1 FY 2024, we have incurred a group CapEx of INR 13,203.60 crore, as compared to INR 16,664.19 crore in the corresponding previous period. The capital outlay of NTPC standalone has been estimated at INR 22,454 crore for FY 2024. I would like to highlight a few other important issues. NTPC Group has a strong commitment towards renewable energy. We have already commissioned 3,314 MW of RE projects.
Presently, 7,258 MW of RE projects are under construction. Furthermore, we have secured tender and bilateral ties for another 10 GW of renewable capacity, creating a visible pipeline of more than 20 GW in the near term. MoU has been signed between NTPC Green and UPRVUNL for the development of RE projects in Uttar Pradesh. Similar MoU was also signed with HPCL Mittal Energy Limited for the development of RE projects and green hydrogen derivatives. MoU was also signed with ONGC and OIL, Oil India Limited, for renewable energy projects to explore collaboration in areas of renewable energy, green hydrogen and its derivatives, geothermal, et cetera. As part of our overall energy security plans, we are actively considering awarding thermal capacity of 11.2 GW by next fiscal. This is in addition to the 10 GW thermal capacity already under construction for the group.
Furthermore, to have greater fuel security, we are enhancing our coal mining capacity as well. A business transfer agreement for transferring mining assets from NTPC to NTPC Mining Limited, a wholly owned subsidiary of NTPC, was signed on seventeenth August 2023 at New Delhi. Also, NML part- The auction process of commercial coal blocks notified by Ministry of Coal, and was declared as preferred bidder for North Dhadu East coal mine, having an estimated geological reserve of 439 million tons. Going higher on generation, lowering GHG intensity remains our motto for environment management and drives our efforts to comply with new environmental norms. We have taken significant steps to control SOx and NOx emissions. Over the next three years, we are planning to commission FGD systems for our entire operational and under construction capacity, ensuring a substantial reduction in SOx emissions.
With respect to ash utilizations, 10 NTPC and JV stations achieve 100% ash utilization. NTPC average ash utilization is 77.86%. 2,700 million tons of ash was transported in containers on DLC rakes from Khargone, which is the first of its kind in India for ash transportation. Lastly, as a CSR initiative, NTPC has adopted archery sports in India with the objective of scouting for talent in remote parts of India and nurturing them through coaching camps to enhance India's presence in the sports internationally.
So again, yeah, so.
Indian archers have bagged 9 medals, 5 gold, 2 silver, 2 bronze in the recently held 19 competitions. Also, the Indian archers shot their way to second round by bagging 4 medals, 2 gold, 1 silver, 1 bronze in the Archery World Cup stage.
Yeah, we are.
Held in Antalya from 18th to 23rd, April 2023. NTPC has been recognized as one of the world's best employer, 2023 in the Forbes World Best Employer List, 2023. It ranked 261 out of the top 700 companies in the world ranking, and is the only Indian PSU to be-
In October.
NTPC Limited has been conferred with-
Yeah.
Asia's Best Employer Brand Award 2023 at the Asia Best Employer Brand Award, held on 17th August 2023. NTPC bagged 5 awards at the fifth edition of CII Digital Transformation Awards, hosted by CII Tata Communication Center for Digital Transformation. NTPC has been awarded Technology Transfer Award 2022 in generation sector by Electric Power Research Institute, EPRI, US, for incorporating assessment and benchmarking tool for flexible, flexible operations. These are some, these were some of the key highlights I wanted to share before we begin the question and answer session.
Yeah.
I now hand over to BNK Securities for further proceedings.
Thank you very much. We will now begin the question and answer session. Anyone-
Yeah, but there are some interruptions. We could, we could hear some discussion. Can you... It happened last time also. There were a lot of disturbances. Somebody talking in between. Can you just check it?
Yes, sir, I'll check on that.
Now, you-
Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on your 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 the question queue assembles. Excuse me, sir. There is a background disturbance from the management line.
Management line?
Yes, sir.
Okay. We will have to deal with this. Okay, fine. Carry on.
Okay, sir.
Are you not able to hear, sir?
Sir, we can hear, but we are able to hear it.
Yeah. Okay.
The first question is from the line of Mohit Kumar, from ICICI Securities. Please go.
My first question is on the thermal coal pipeline. So you just mentioned that you are looking to award 11.2 GW. How much is coming in stand-alone? How much is coming in on contract basis? And are we looking to award, and how much you are looking to award in this fiscal? And if you can name those power plants, it will be very helpful.
Yeah. 11.2 GW, which we mentioned. I just named the projects, this will be Singrauli 3, 1,600 MW, which is expected to be tendered out in the Q3 of the current fiscal. Sipat 3, again, the same period, 800 MW. Darlipalli, unit one.
Very good.
In fact, we are...
Hello? We are going to add 11,200 MW award by financial year 2024-25. And 50% will be standalone, and 50% will be through JV route.
Does it include Lara, any chances?
Sorry to interrupt, sir. Hello.
Yeah.
We will reconnect your line as there is a lot of background noise coming from the line.
Okay, fine.
...The management line is reconnected. Please go ahead, sir.
Yeah, I'll just respond to this question about the new thermal capacity being planned. Out of the total 11.2 GW that is planned, 50% would be coming from NTPC standalone, and the remaining 50% would be through joint ventures subsidy. This would be tendered out progressively over the next 12 months, you can say.
Sir, does this include Lara or this is excluding Lara?
Lara has been awarded. Lara has been awarded already first one.
Understood, sir. My second question is, sir, H1 was slightly, slightly, you know, bit muted in terms of renewable bidding. How do you see the renewable bidding pipeline and opportunity, which probably will conclude in H2 and provide us a greater opportunity for us?
Mr. Mohit Bhargava, our VDRE and, you know, NGEL, will take this question. I'm not very clear what you want to know, because pipeline has already been exposed by Director (Finance).
No, sir, my question was, yes, sir, on the bidding pipeline. So because H1, I think bidding was slightly muted for renewables by all the agencies. My question is: How is the pipeline looking like at this point of time? And how do you expect this to the in terms of gigawatt, to close by end of fiscal?
So as far as the bidding pipeline, as directed by the Government of India is concerned, I think about 25 which have already been announced by the agencies, including about 5 GW from NTPC. And the target is that all the 50 GW would be, bid completion would be done by the end of March. So that's how the things stand. Because now all the various, guidelines, the bid document guidelines, the pooling guidelines, and all of those have been issued.
Understood. So my last question, so what is the regulated equity at the end of H1 for the standalone and consolidated?
The regulated equity at the end of last quarter was INR 81,498, in standalone basis.
Anything on consult, sir? Is it available or...
Consult is 98 050.
Understood, sir. Thank you and all the best, sir. Thank you.
Thank you. The next question is from the line of Apoorva Bahadur from Goldman Sachs. Please go ahead.
Hey, hi, sir. Thank you for the opportunity. So can you share the fixed costs under recovery figures for 1H and 2H?
The fixed costs under recovery, for Q2 you want or? Q2 is INR 381 crore.
Okay, fair enough, sir. I think that's confirmed. Sir, I wanted to understand the position of core inventory. I mean, what is the free from data? Is that just a bit tight? How do you see this panning out going ahead for the rest of the year?
You'll have to repeat. I, probably the line is not very clear. We are struggling to hear you a little bit.
Sorry, I hope I am audible now.
Slightly better, yes.
Yes, sir. So I wanted to inquire about the coal inventory at power plants. They are having some tightness as per the CEA data. How do you see the rest of the year panning out, especially for our non-pithead power plants?
Right now, the coal stock is around 88.5 days at the NTPC stations, although the pithead is none, the pithead stations, the coal stock is less. Going forward, generally, coal receipts would increase from now onwards. So yes, it is a little tight, but as we expect the coal stocks to pick up from end of this month onwards.
Okay, sir. And as-
... Go ahead.
Sorry, the scheduled maintenances for all our, all our coal plants have been done on, something in Q in Q3 as well?
Something will be due in Q3 and Q4 also, because we have a lot of units. So we accept from the government directive that not to take units and overhauling in the month of April and mid of May. We have started taking overhauls every month, and it's going on.
Okay, sir. So by the end of the year, the total 6% of recovery should be avoid from?
It should be. We should be near around INR 200 crore. Hello? Hello.
The next question is from the line of Nikhil Nigania from Alliance Bernstein. Please go ahead, sir.
Thank you for taking my question. My first question is on the renewable side. Wanted to understand if there is any update on the investment envisaged in the renewable business and plans to list the renewable business separately.
You want the projected investment in the renewable?
No, sir. Sir, there was a plan to get an investor, separate investor into the renewable portfolio and then list the renewable business separately, as an entity. If there's any update on that?
Yeah, see, we have broadly some plans for you know unlocking some value, either by way of a stake sale or an IPO route. However, we are working towards that, but as you know that you know we have a pipeline of renewable projects. 3 is already operational, 6.2 is under construction, and another 11 gigawatt is under different stages. So we'll be working on that and you know by a year and a half or 2 years, there should be a substantial capacity on ground. So when we reach a certain critical mass, we will time it. So right now we are working towards that, but we'll be exploring the market looking at the conditions and deciding on the timing.
Got it. Understood, sir. Thank you. So the second question I had was, storage. On storage, there is a lot of news around plans to set up pump storage, and the government is keen as well. Wanted to understand if there is any update on the storage front, there was a tender out by NTPC as well on storage. So any update you could share on plans on pump storage, or otherwise?
On the pump storage, I'll give you a snapshot. Government had identified, Government of India, last year, 11,550 MW, and across Maharashtra, Andhra Pradesh, Tamil Nadu, and Karnataka, and identified NTPC as possible developer, subject to government of that particular state agreeing to. Out of that 11,550, we have gone into the PFR and also gone for acceptance of dropping some of the units. We are now targeting half of that, 5,300. Meanwhile, we have self-identified another 8,500 MW of capacity, Gujarat, Himachal Pradesh, Meghalaya, Chhattisgarh, and Madhya Pradesh, and feasible capacity is 100% of that. If we add together, today we have around 14,000 MW of pump storage capacity, ready to be signed with the state governments at different stages, and we'll immediately start building up.
That's helpful, that's helpful, sir. So any visibility or timeline, how long does this take? Because there will be approvals and then construction. So how long would we start seeing on ground progress on this? Tentatively.
I tell you, for a typical pumped storage, it typically takes 2-3 years for the initial work, because it's like any hydro, there are a lot of studies to be carried out. And the construction time will be of the order of it can be 3.5-4.5 years, depending on the site, and depending on the utilities, off river or on the river, et cetera. So from today, if you take the most conservative view, it will be of the order of, say, 7-8 years, and if it is most optimistic, it will be of the order of, say, 6 years. That's the position.
Understood, sir. Very helpful, sir. Thank you, sir. I'll join back with you.
Thank you. The next question is from the line of Abhishek Maheshwari from SkyRidge Wealth Managemen t. Thank you so much.
Thank you for the opportunity. Am I audible?
Yeah.
Yeah. I have only one question. It's regarding understanding your debt, your borrowing strategy. Sir, as we understand it, currently, you are generating more than enough cash to, you know, sufficiently pay off for all your CapEx expenses. I understand that all the power projects are formulate basis, you know, the PPAs are signed on formulate basis for a mix of debt and equity. Is it necessary for you to take the debt to finance your project?... or, you know, can you finance it through your internal accruals also? Just wanted to understand, do you have a planned peak debt for your books, or is it something that will keep coming on as you take new projects?
No, right now, the company's, you know, debt equity ratio is very comfortable. And, as, as long as we are, you know, if we keep investing on thermal side, which is, still a regulated business on a cost plus basis, it benefits us to put 30% permissible equity over there because it will fetch us a 15.5% returns, isn't it? But as far as, other business, non-regulated business is concerned, that will, that will depend on the resource position. Generally, on the renewable side, we go for a 80/20 combination.
So more-
That remains that in a regulated business, even if you put more equity, it will be treated as a notional debt, and you'll be getting only the weighted average rate of foreign. So it doesn't pay you to put more equity into the regulated business.
Yeah, yeah, that's what I was asking. And I meant it majorly for renewables only, because that's the strategy going forward, right? So I think the bulk of expense, bulk of CapEx will be going into renewables only. Then, does it make sense to finance it through your own selves rather than relying on debt?
Not very clear. Can you, can you distance yourself from the mic a bit? Because it's, it's echoing.
Okay, I'm sorry. So I'm saying I was majorly talking about renewables only, because since bulk of your CapEx is going to go into renewables, then does it make sense to finance your renewable projects through your own internal accruals only, rather than relying on the debt? Because you are generating enough cash as it is, right? And, you're not looking at regulated businesses going ahead, right, regulated projects.
No, we will have a judicious mix of the debt equity. Nobody will ever, you know, finance the projects only through equity. So because we have other commitments also, we have other subsidiary JVs also. We'll be looking at new businesses. So from that point of view, whatever is the healthy mix, we will go for a healthy debt equity ratio.
Okay, sir. Thank you. I'll get back to the queue right now. If there are any follow-ups, I'll get, ask again. Thank you.
Thank you. The next question is from the line of Subhadip Mitra from Nuvama. Please go ahead.
Good evening, and thank you for the opportunity. I got disconnected from the call earlier, so answer this question. Do you think HYDAS would be adjusted that number, both for standalone and consolidated for the quarter?
Yeah, we'll share with you the adjusted PAT. You know, the adjusted PAT for Q2 financial year 2024 is INR 3,497 crore, which was INR 3,601 crore in the last financial.
This is for the standalone?
This is for the standalone. Consolidated is not ready with me right now. Probably our team will share it with you later.
Understood. Secondly, with regard to the ordering of the thermal plants, which are currently in the pipeline, you know, post Lara, if you can help us with the schedule of, you know, how much and which projects you anticipate to get ordered out on the BTT side, let's say, over the next 6-8 months or a year?
The award, huh?
Yes, sir, the BTT award, the awarding of the awards.
See, we have award similarly, 1,600 megawatt and Sipat, 800 megawatt. Similarly, by December 2023, and Sipat by January or maximum February 2024. Sipat is slightly delayed because of the election, which has been announced, and everything is on standstill there. Otherwise, it was completed in December itself. Next phase is vertically, 800 megawatt, that will come in June 2024, and then Media 2,400 will come in September of 2024.
Major by when, sir? Sorry, I missed that.
September twenty-four.
Okay.
We have another 5,600 MW capacity lined up. Telangana phase two, 24 MW. Obra, the expansion, 1,600 MW, that will be done by NTPC through Meja Urja Nigam Limited, our JV with UP. And Obra, another 600 MW expansion, which will also be done through our JV with UP, Meja Urja Nigam Limited. These will be done progressively in 2024, 2025, and definitely by H1 of fiscal 2026. That's what are there.
Perfect. Perfect. That's very helpful. Lastly, on the renewable side, you know, given that we have been able to expand our portfolio so well to 20 GW over the last few months, is there any targets of, you know, what kind of numbers you would like to reach in terms of total portfolio, let's say, by end of this fiscal or next year?
... presently, we have a 3.3 gigawatt commissioned capacity by, based on, you know, projects on hand, which has been awarded. By financial year 2026, we are expecting to have 15 gigawatts.
So if I understand-
We have-
Sorry, go ahead.
We have a long-term target of 60 GW by the end of financial year 32.
No, understood. So what you mean is that you are expecting to commission 15 gigawatt of renewable by FY 2026. Is that correct?
That is right, because around 11 GW is under construction. 9-11 GW is under construction.
I understand. And in terms of growing the portfolio, sir, beyond the 20 GW, would you, would you have any rough target, let's say, by, you know, end of FY 2024 or 2025, that you're anticipating the 20 GW to maybe grow to, let's say, 30 GW by end of next year or something like that, any such target?
What do you want to know, Subhadip?
Sorry?
What do you want to know, Subhadip? You only know that winning pipeline of close to 50 GW going to happen every year. So we'll obviously try to win some bids there. We're also talking to a couple of CII guys, but obviously, I can't give you number right now, so.
Understood, sir. That, that answers that. Thank you. Thank you, sir.
Thank you. The next question is from the line of Gaurav Loiya from Motilal Oswal India Fund. Please go ahead. The line for Loiya is disconnected. The next question is from the line of Nikhil Abhyankar from ICICI Securities. Please go ahead.
Thank you, sir. Thanks for the opportunity. So, my first question is, why was our underrecovery high in Q2, and are there any specific reasons for it?
The underrecovery is high in Q2 because we have taken overhauls. These overhauls were taken during this season, so therefore, this underrecovery is high. Going forward, by end of the year, we'll be making up this underrecovery, and we'll have only around 200 crore underrecovery. That's the part of borrowing and one unit of margin.
Okay. And so recently, we had a new grid code. So, what is... What are your views on that? And will it lead to some kind of an opportunity to sell on power exchanges?
Grid code?
The new grid code, yes, there are opportunities for us to sell on the exchange, and we are doing that. But there are also some concerns of the grid code which have communicated to the regulator. And that is a continuous dialogue that we are having with the regulator on this.
Okay.
Our renewable capacity addition for Q2 was almost less, if I'm not wrong, sir. So are we facing any difficulty in execution? Also, you mentioned that you've got almost a locked-in capacity of 20 GW, and our target for FY 2026 is 15 GW. So, almost around 5 GW won't be commissioned even in next two years. Can you throw some light on that?
So yes, in Q2, we didn't do anything because various clearances, like, sourcing of modules from outside India and all, we got only towards the end of Q1. So the target is to pick up pace in Q3, and the bulk of that will come in Q4. So that's broad target for this financial year. Regarding the 20 GW, which is already on the, in the pipeline, so our target is, our broad aim is to do around 5 GW every year. This is what I think has been clarified earlier also by Mr. Shiva. We do, we do a run rate of about 5 GW every year, so that we are on track to do this for you.
Hello? Yes, that's it. That's it. Thank you. That's okay.
Thank you. The next question is from the line of Gaurav Lohiya from Long Only India Fund . Please go ahead.
Am I audible? Hello.
Go ahead.
Yes, sir. Sir, just wanted to check, what is the adjusted track for Q2 FY22 you mentioned?
Adjusted track for Q2 is, on a standalone basis, it is INR 3,497 crore.
3,497. And what—it was in Q1, sir?
Q1, 200... 3,794.
3, 7, 9, 4. Sir, while I understand that we don't have a digital track for console, but if you look at reported numbers, sir, in the past, consolidated track as percentage of standalone track was in the range of 100% to 105%. But in the last two quarters, it's been almost 20% higher than the standalone bank. Even if we you know include the portfolio that we have transferred to subsidiary, the renewable portfolio, it explains only 4%-5% kind of target difference, right? So, once the data coming in, sir, the large data.
Maybe, essentially, you know, the profits from, the, the top share of profit from subsidiaries has been close to INR 250 crore variation, and the share of profit of joint, joint ventures through equity method, we have a differential of INR 961 crore. So this adds to around INR 1,200 crore variation, which goes on to, you know, which has this adjusted.
Going forward also-
Another factor is that our BIFPCL was not there last year, so the COD was effective from twenty-third December 2022, which has also contributed to the higher results.
Sir, going forward, this difference would remain the same, at the same level? Would it remain at the same level, around 10%, or it would come down, because of, let's say, reduction in, JV profit or, subsidiary's profit?
It should be in the range of 15%-20%.
Understood, sir. And sir, what was the CapEx for the first half, sir, at the group level? First half at the group level.
CapEx today?
At group level.
Group first half. At the group level, first half, we are around 47% H1. That is INR 13,204 crore, and target is INR 28,373.
28,373.
It's the target, and we are at 47%.
Understood, sir. I think in the Q1 analyst meet, we had said, INR 27,000 crore for FY 2024, right? So we have changed it to INR 28,000 crore.
Yeah, we keep on going upwards only, and that's a growing company.
Could you please give us the revised target for FY 2025 and 2026 also, if there has been a change in, after for those years as well?
Next financial year, we'll be coming out before the budget because that is obligatory of a government company. We are working on it now, and our CapEx target for next year will be remaining almost of the same range, but after that, that will also zoom further.
Understood, sir. And, just last question, sir. Just to be clear again, sir, this difference between consolidated PAT and standalone PAT will remain there in FY 25 as well, right? 15%-20% kind of number.
That is our estimate.
Understood, sir. I understand.
But, as of now, you expect this to continue, right?
Yes, we need. Yes, understood. Thank you a lot.
The next question is from the line of Rajesh Majumdar from BNK Securities. Please go ahead.
Yes, sir. So I had a couple of questions. One is, what is the status of our pump hydro project that is going on right now at THDC? It is supposed to be commissioned this year, and what is the expected profitability from that project?
THDC pump hydro project, 1,000 MW. There are some last-moment surprises at the tail end this year. Now the issues have been settled, and we expect the pump storage first unit to come on stream by January or latest by February, and then progressively 3 on stream will come.
Okay. This is a regulated unit, right, this particular project?
Yeah, yeah. It's all, cost plus only. Yeah, it's a CS hydros or on cost plus.
Okay. And secondly, sir, could you... You've given us the pipeline for up to FY 2022. Could you give us the pipeline for the capacity addition for thermal for the balance part of the year, 2025 and 2026? That's it for my side.
Balance part of the year, 2025-2026. Just one second, yeah. In this year, we have already achieved 1,460, and for in this year, we'll achieve further 1,480, and this is further talking is on hold. And to be achieved includes North Kharagpur unit two, 660, Pelaiyarr unit two, 800, Durgapur unit two, 20 MW.
Okay.
For next year, we have lined up 5,240 MW capacity addition, which includes Barh unit three, North Karanpura unit three, Patratu two, two units, 1,600 MW, and, then KGP Khurja, both the units, 1,320 MW. And in PSP, also I am expecting one unit to be commissioned in this financial year. But in any case, by 2024-25, 10,000 MW will be commissioned.
Okay.
That makes it 5 to 40.
26, sir?
Twenty-six?
Yeah.
2026, our projection is, is going to be, seen here, because all the capacity that we are just now awarding, we start getting commission from 2027 onwards. In 2026, it will be roughly 1,764. This will include GCC, 440 MW, and the Patratu one unit, the last unit is 100, and hopefully the Sapuan Vishnu project, 50 MW.
Right, sir. That's helpful. Thank you so much.
Thank you. The next question is from the line of Dhruv Muchhal from HDFC AMC. Please go ahead.
Yeah, sir. Thank you so much. So you mentioned that you have 14 gigawatt of pumped hydro project. Now, assuming that, you know, you get the financial closure done and the EP and FP cleared over a period of time, how many of these projects do you have go ahead from the state government to start constructing if all these procedures are done? Already, I mean, already you have approval from the state government.
I told you that, out of this 1,400, roughly 6,000 has been identified by Government of India and allotted to NTPC. Among that, we have already discussed with Tamil Nadu, which is going for the cabinet approval now. Once it is approved, we will sign the agreement with them. The rest of the projects are roughly 8,000 MW. These are at various stages of identification. Like in Himachal Pradesh, there are two projects, 1,200 MW, which is Koldam One and Koldam Two, PSP. These are very easy projects, and only Himachal Pradesh government should agree to award it to us. There are some issues going on regarding water sharing we must be resolving. So there are some delays at present, but we expect to get it soon.
Karnataka, we are negotiating at the last stage for Netravati, and we are also discussing for some more projects with Karnataka. Maharashtra, we have already identified, and we are discussing with them around 800 MW immediately and maybe another 2,000 MW going forward. Then we are also discussing with Meghalaya. We have signed a MoU for around 3,100, but we are in the process of preparing the PF first. Chhattisgarh, 1,200 MW, we are discussing for Jayantharoo. And Madhya Pradesh, 800 MW has been identified. Gujarat, 1,000 MW. These are at the different stages of pre-feasibility report, and we have sounded the state government. And while some of the state governments like Meghalaya signed a MoU, so it is given, rest of the cases, except Gujarat, where Gujarat has revealed since that's why we moved in.
You can say 3,100 plus 1,000, 4,100 is also decree de facto. The rest are at the different stages of negotiation.
Got it. So this is helpful, sir. Sir, just on renewables, you mentioned that there are 8-9 to 11 gigawatts of projects which are under construction. So just to clarify, this means that you have already awarded the EPC contract, and probably some set of modules, or what stage are they? Hello?
Satish was clarified that about 3.5 gigawatt is already operational and another 7 gigawatt is under construction. After that, adds up to 10. That is what he was referring to.
Yes. No, I'm saying when you refer to under construction of what, seven or whatever, level-
When we say, when we say under construction, so we already placed the EPC award or the balance of system award. So work is being executed on the ground.
Got it. So that means they would be commissioned over the next at least... This much would be commissioned over the next 18 months or 24 months? Because the EPC is-
Yeah, yeah. So, so wherever we have started the work, the target is to complete it by max 24 months, if not a year.
Got it. Sir, one more question was on the thermal addition. Now, we are seeing some tightness in the power markets, and probably government is also pushing a lot. Sir, is there any scope to... What we see from the current ordering is that it takes about 4-5 years to execute these projects, new thermal projects, even they are ground clean yet. So is there any scope to, you know, quicken this, probably in, I'm not sure, 3.5 years, 4 years, or whatever? Is there any scope to do that, or what you think is 4-5 years is the best possible that can be done?
As an optimist project manager, I will say it is there. The scope is always there, and we'll try everything to do it. But in Indian context, I tell you, there are some basic, problems that we face. First of all, the first 2 years, when we are doing lots of civil, the 4 months of rainy season obviously takes away the 8 months from the schedule. So even if I do it in 4 years, I am effectively doing it in 40 months. That you have to understand. Secondly, some of the projects, depending on the accessibility, the logistics, some time are required extra. Like in one of our projects, the generator stator still was stuck up for 8 months. So project specific only I can tell you whether I can perform or postpone....like Darlipalli thermal, which is under construction now, which we awarded last year.
We have a very optimistic position, even after 14 months of working, that we'll do it 4 months ahead of schedule. If that gives you some kind of results to say, cheers, that's good.
This is helpful. The last question-last clarification, in one of your previous questions, you mentioned that the gap between consolidated and standalone should be about 15%-20%. But just to understand, sir, because all the renewable is coming up in subsidiaries, which will add only in the consolidated profit, shouldn't this gap only increase every year, this 15%-20% probably increasing every year?
So what we, I have indicated, you know, because there are several JVs and subsidiaries, and the next figure, what would emerge should depend on, interplays and peculiarities of each year financials. So it would only be fair to assume that it would be around 15%-20%, but, it, but it again, it depends on several factors.
So, you know, because I was wondering, all the renewables and a large part of the renewables is coming up in the next two years also. So that will add to the subsidiary numbers, so from that angle. But, no, no, sir, I'll probably get in touch with you. Thank you so much for your time. Thank you. That's all.
Thank you. The next question, this line, is from the line of Atul Tiwari from Citi. Please go ahead.
Yeah. Thanks, hello. Sir, on this 14 GW of PSP project, will you be signing a regulated ROE PPA, or, is it like a fixed tariff for the per kWh of power storage?
What?
No, no, sir. For the, for the pumped storage project.
The pumped storage projects that we are developing, will be developing mostly through the cost plus CSC model. That is what we are discussing with Government of Tamil Nadu, Government of Karnataka, everybody.
Okay, so sir, in that cost plus model, how... I mean, what is the ROE or ROC you are discussing on the employed equity or capital?
We have to discuss on project to project basis. As the project is different, I told you there are three different types of pumped storage. Cost, in general, the PSP also follows the same ROE that is allowed under the regulation for a hydro project.
Okay, okay. Sir, any idea about the cost of the storage? I mean, after, say, allowing for 16% ROE, what is the per unit cost of the storage, currently? Cost to the customer, I imagine.
Project, but cost of storage cost will be of the order of INR 4.5, it will be of the order of, say, INR 3.5 rupees.
INR 3.5-INR 4.
Four plus.
Okay. So, about INR 3.5-INR 4 rupees roughly.
3.5-4 and 4 point, only storage.
Only storage for us.
Only the storage company. And then you can add-
But the figure that was indicated is purely the storage, at what is called as the price adder. You'll have an inherent tariff for that, and all put together could be in the range of INR 7, INR 7.25-INR 8.2.
It depends on what range of, sorry, you asked the right question, storage. Storage is the cost which is in my control. So that will be of the order of INR 3.4-INR 4.4, depending on the type of project and location.
Okay, sir. Got it. Thank you. Thank you very much.
Thank you. That was the last question, and I now hand the conference over to the management for closing remarks.
Thank you, on behalf of NTPC management, I would like to thank all of you for participating in this conference call for the Q2 financials. Thank you so much.
On behalf of BNK Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.