Ladies and gentlemen, good day and welcome to the Azure Power Fiscal 4th Quarter 2021 Earnings on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikas Bansal from Azure Power. Thank you and over to you, sir.
Thank you and good morning everyone and thank you for joining us. On Tuesday evening, the company issued a press release announcing results for the 4th fiscal quarter of 2021 ended March 31, 2021. A copy of the press release and the presentation are available on the Investors section of Azure Power's website at COO and Pavan Kumar Agarwal, CFO. Ranit will start the call by going through recent key highlights, module will then follow-up with an update on our projects under construction, technological innovation and an industry update. Call.
Ron will then provide an update on the quarter with additional discussion on performance of the quarter. And then we will wrap up the call with Ranjeet updating FY 2022 guidance and providing quarter 1 FY 2022 guidance. After this, we will open up the call for questions. Call. These statements are important and integral to all our remarks.
These are risks and uncertainties that could cause our results to differ form materially from those expressed or implied by such forward looking statements. So we encourage you to review the press release we furnished in our Form 6 ks and presentation on our website for a more complete description. Also contained in our press release, presentation material and annual report of certain non GAAP measures that we reconcile to the most comparable GAAP measure and these reconciliations are also available on our website in the press release and presentation materials and annual report. It is now my pleasure to hand it over to Ranjeet. Thank you, Vikas, and a very good morning, everyone.
I would like to start today's call offering condolences to everyone impacted by COVID. We faced the pandemic's ugliest phase in India during April May 2021, when almost no family was left untouched in some way or the other by COVID. Good part is that we are now seeing daily infections receipt and our vaccination drive has picked up in the fight against the pandemic and have been following all COVID protocols with Vega. Mark. During the 2nd wave, we undertook a number of initiatives to supplement the medical infrastructure in and around the areas we operate.
We donated 30 plus oxygen concentrators to healthcare facilities in the states of Rajasthan, UP, Karnataka and other states, medical items to a number of facilities as per their requirement. Within the company to help our team members, we strengthened our preparedness to respond to medical emergencies faced by our employees or their family members by implementing a cohort based support group, procurement of 15 oxygen cylinders distributed across our various sites and purchasing a number of oxygen concentrators for our own use placed at strategic locations. We continue to retain support of a qualified medical practitioner for any medical advice to our employees and their family members. We have also implemented a company subsidized term insurance scheme to support the economic needs of our families in case of any unfortunate event. Call.
I'm especially proud of the cohort based group wherein we created a pyramid of contacts, thereby reaching out to every team member every day to track their and their families' health providing help where needed. The way the team came together on several occasions to help a team member Sustainability and ESG are key to the success of our business at Azure. We highlighted our ISO 45,001 certification last quarter, which demonstrates Azure's focus on occupational health and safety and validates additional efforts we put in to make our workplaces safe for our team members and contractors. In December, MSCI, the leading ESG rating agency, rated Azure Power as AA for ESG, which places us in the top quartile of all global utilities they cover and probably amongst the highest ratings among our peers in the country. We continue to strive towards improving further on this rating.
I'm happy to report that we have entered into an agreement to sell our rooftop portfolio to Radiance Renewables for an enterprise value of approximately US $73,000,000 This is the first ever asset sale in Azure Power's history and signifies our commitment towards capital discipline, while recycling capital into higher return committed projects. Continuing with this philosophy, I'm happy to report that Azure is seeking to increase size of our addressable market by foraying into other areas of renewable energy, especially wind and solar wind hybrid projects. As the share of renewable energy in the grid increases, we realize that the business will move towards more dispatchable energy. As the industry moves towards providing firm power to the grid, wind and storage will be 2 important technology additions we have to plan for our portfolio. I had mentioned in my previous remarks how green hydrogen and plummeting storage costs have the potential to disrupt our industry.
We are in the process of critically examining our business and growth strategy as we go along our endeavor to be on the right technology at our projects to improve returns. We assured our valued investors that we will continue to be disciplined in our approach and we'll keep all of you posted as we take steps in this territory. Today, Our operating assets have performed well and not only have we been able to continue collecting revenues during this pandemic, we even improved our collections with our DSO at 116 days at the end of the quarter compared to 122 days at the same time last year. We have controlled our costs and our cash, G and A, We had promised to reduce our cash G and A expenses by 10% in fiscal year 2021 versus fiscal year 2020 and I'm happy to report that we have reported a reduction of 26% in G and A from previous period excluding the impact of stock up decision rights. Growth in our actions to improve returns have resulted in a 23% year on year increase in EBITDA from operating assets and a 75% increase in cash flow to equity from operating assets.
Since we started reporting CFE, we have seen a steady improvement in this metric due to our focus on selling our assets, CapEx infusion in operating assets, reducing our costs and collection of long outstanding deals. On the flip side, despite significant progress made prior to the 2nd wave of COVID towards signing power purchase agreements on our 4 gigawatts for which we have a letter of award, but no PPAs, we have not much to report yet. We still remain optimistic that we will have positive news to deliver shortly as there is a definite movement towards the finish line. In spite of the pandemic, Power demand recovery is underway, which would encourage DISCOMs to invest in buying power for their future needs. It may be noted that there is a backlog of 15 to 20 gigawatt awarded capacity, which is awaiting TSA to be tied up with the DISCOMS.
Has been supported by not coming out with any new solar ISCS bid till this backlog is cleared. Margin. We have also seen global polysilicon prices escalate in the recent past and it has impacted our supplies and our commissioning timelines. The government continues to support the renewable energy sector. The honorable Prime Minister recently reiterated Government of India's commitment to climate actions at the G7 Summit and he has been the driving force behind India's vision of 4 50 gigawatts renewable energy operational by 2,030.
Apart from the push on setting up generation assets, the government has been talking about promoting make in India. There has been talk of measures to encourage solar cell and solar panel manufacturing domestically. 2 important measures are announced in the last few weeks to enable local manufacturing industry. First was the imposition of basic custom duty. From 1st April 2022 with 40% on modules and 25% on sales.
Any project auctioned after April 10, 2021 will necessarily have to buy solar panels that appear on ALMM list. Our current pipeline will continue to enjoy the benefit of pass through since our projects were auctioned before the imposition of both of these notifications. Further, as per a recent judgment by the honorable Supreme Court of India, All transmission lines in certain regions of Rajasthan and Gujarat have been asked to be converted from overhead wires to underground. Given the turmoil of the last year, FY 2021, fiscal year 2021 has been all about efficiency and prudence. We have invested in our operating projects to improve generation and living facilities of our team members at site.
We are moving rapidly to deploy the latest bi module and trackers to increase efficiency of installation capture on our projects which are going into construction. If I look back at this difficult year, some of our achievements are that we were able to keep operating through the various lockdowns and pandemic surges. Call. The work we were able to do to support our teams and our communities that we were able to largely protect returns on our under construction projects through COVID induced delays, the sale of the rooftop assets and the patience we have shown by staying away from the temptation of bidding aggressively through the year have been huge successes and very satisfying. With almost 2 years behind me, I look forward to the coming fiscal with great hope and optimism.
We believe in waiting for the right opportunity to earn our shareholders a return higher than our cost of capital and the philosophy of building a sustainable business rather than simply chase scale. We continue to look for suggestions from our investors and stakeholders on how we can further improve our disclosures and make it easier for you to understand our business. With that, I would like to turn it over to Murali.
Thank you, Ranjit. On Page 5, we provide an update on our projects under construction. 2nd wave of COVID at its peak, Severely impacting our construction activities, not only disrupting the supply chain, but also impacting several of our sites. The high local demand for solar modules in the past several months or so in China, coupled with the rising yuan and rising raw material costs, has resulted in module suppliers trying to renegotiate their contracted price and delivery commitments despite signed supply contracts. The module prices for new orders are at levels that were seen several years ago.
We had anticipated earlier that by fiscal year end call. In our Rajasthan 600 Megawatt project, we would operationalize 450 Megawatt and the final 150 Megawatt have been pushed by another quarter due to the 2nd COVID related COVID wave related challenges. Thanks to the Ministry of New and Renewable Energy notification, however, granting extension to all projects with commissioning due date on or after 1st April 2021, we don't expect to incur any penalties for delays. Project construction work in Assam II has picked up after poor weather and COVID related delays. However, The 2nd wave of COVID came in strongly and it has again taken a hit.
After the initial 25 megawatts commissioned, we commissioned another 12.5 megawatts of project in May and expect another 12.5 to be done shortly. The entire project is expected to be fully commissioned by the end of the calendar year as we are already in the midst of the monsoon season now. We have sought a commissioning date extension from the regulator and procurer for getting extension till the end of this financial year this fiscal year sorry, this calendar year, I'm sorry. As mentioned in the past, We have made several incremental improvements in operations and construction practices to squeeze out better returns. Our recently operationalized We have provided some highlights of our ESG accomplishments on Page 6.
As Ranjit mentioned earlier, we have got a strong AA rating from MSCI for ESG and obtained the ISO 45,001 certification, which verifies that Azure Power provides a safe and healthy workplace. Our carbon free generation has avoided about 3,000,000 tonnes of CO2 equivalent this fiscal, bringing the total to 9,500,000 tonnes equivalent since inception. Call. We have been focusing on our water neutrality having installed 84 groundwater recharge structures across 15 sites this fiscal. Call.
Another environmental focus this year is safe disposal, even recycling wherever possible of damaged modules and we have made point. We are actively engaged with the communities in which we operate with support towards medical and health facilities and active response on the pandemic front. On the governance side, We are already complying with the World Bank Equitable Principles and Governance Standards of NYSE, SEC and SGX. Call. Majority of our directors on the Board are independent and with increased gender diversity.
During the fiscal, we introduced policies for human rights and equal employment opportunity along with diversity and inclusion, which highlights our efforts towards upholding the highest governance standards. We are continuously striving to implement best practices to enhance our sustainability. Looking at industry and regulatory updates on Page 7, There is a buildup of allocated solar projects with letters of award, but without power purchase agreements at the moment. In the last couple of quarters, the distribution companies have not been signing PSA's and this has been accentuated by the 2nd COVID wave and falling tariffs. However, our discipline has protected us from entering at the recently bid out low tariffs.
We expect developers may find it difficult to build projects at the recently bid out low tariffs given the rise in input costs coupled with COVID related delays. Call. The good news is that overall power demand in India is expected to grow now as the country emerges from the 2nd wave. With the challenges in supplies and pricing, we do expect that there should be an increase in tariffs compared to the ones discovered in the recent past. However, we've all been surprised and we shall see how tariffs pan out.
We have seen that there have been periods of intense competition followed by moderation. We are pursuing newer opportunities such as wind and hybrid and we assure that we shall only bid for projects at commercially viable tariffs. Call. We continue to believe that we would be able to obtain the 4 gigawatt PTAs at value accretive levels, which would add to our contracted pipeline and provide returns above the cost of capital. With that, I will turn it over to Pawan to discuss the quarterly results.
Thank you.
Thank you, Mujeet. Turning on to Page 9. On 24th March 2021, margin. We were operating 19 90 megawatts on a PPA or AC basis, which is 20% higher than what we were operating a year before. Our portfolio of 6,955 megawatts remains stable from the previous quarter, excluding rooftop portfolio.
Since our last update, we have entered into definitive agreements to sell our rooftop portfolio and have therefore excluded these assets from our portfolio. Our construction costs have continued to fall in FY 2021 and were about 19% lower than the previous year. Turning on to Page 9 sorry, Page 10. Looking at the quarter, our revenues continue to increase as we construct more projects, some of which have been affected by the second wave of COVID and supply related challenges on module front as noted by Muralik. After adjusting for stock compensation expenses, our EBITDA has been 44,300,000 or 18% higher against 16% increase in revenues from the same quarter in the prior year.
Mark. Turning to G and A on page 11, Safe Harbor Stock Appreciation Rights or SCR, which added about $18,000,000 to G and A for the year, Our cash G and A were below internal expectations. We remain very focused on reducing our costs as we had outlined earlier this year and are pleased to report that our G and A was 26% lower than the prior year. While looking out into FY 'twenty two, we expect that cash G and A will rise about 10% from FY 'twenty one level, primarily reflecting inflation and an increase in megawatts in operation. We are progressing well on refinancing of our about US185 $1,000,000 long term debt facilities outside Greenbond pool as well as US500 $1,000,000,000 green bond ASEAN.
We expect substantial savings in interest costs once these refinancings are completed. Turning to stock compensation expenses, as the share price rises, our stock compensation expenses will rise including G and A. To help with modeling, the impact of ASEAN expenses on our G and A is directly linked to the share price. For Q4 2021, we had a reversal in the expense of around $7,700,000 primarily reflecting reduction in share price from for $40.77 as of 31st March 2020 to $1.27.19 as of 31st March 2021. Going forward, for every $1 change in stock price above and below our previous quarters close, we'll have about 800,000 impact both positive and negative.
We are particularly proud of our ability to improve our DSO despite the challenges this year. Our Q4 'twenty one DSO was 116 days, which is better than 120 days about a year ago. We continue to make progress in collecting our payments and believe there will be further improvement in the future with commissioning of projects with high creditworthy counterparties this year. On Page 12, you can see that EBITDA from operating assets increased about 18% year on year and that cash flow to equity from operating assets rose about 55%. Net debt for operating assets was about 1,130,000,000 and EBITDA for the last 12 months was about 179,000,000 resulting in net debt to EBITDA ratio for operating of 6 to 6.3x, which is better than last year ratio of 6.6x.
Finally, looking at Page 13, providing balance sheet information. We had about $152,000,000 of cash and cash equivalents and our net debt stood at approximately $1,190,000,000 As a reminder, for those that are calculating our debt ratios, the hedging assets of 75,000,000 included in other assets on our balance sheet should be netted against our total debt as this is directly linked to the foreign exchange hedge we put in place related to our green bonds. Now I pass on to Ranjeet to provide some commentary on our guidance.
Thank you, Pawan. In February 2021, when we had reiterated our revised guidance for fiscal year 'twenty one, I had mentioned the caveats of timely commissioning normal weather and no curtailment. Call, but we'll keep the markets posted in our coming updates. For the Q1 fiscal 2022, we expect revenue to be between INR 4,100,000 $4,300,000,000 and the PLF to be between 23% to 24%. With this, we will be happy to take questions.
Call. Hi, everyone. Thank you for taking my questions. The first one is on the SECI 4 gigawatts. Call.
I know you gave some color in your prepared remarks and in your release. I was wondering if you might have a better sense for when The first tranche might get placed. What's the timing of when the agreement could be signed there? Thanks.
Thanks, Phil for their questions. So, like you mentioned, right, there is some progress over the last 2, 3 weeks. In fact, a couple of hearings that were scheduled in the regulatory commissions actually happened over the last couple of weeks. And we are to hear call that those hearings went well. So we are hopeful that we are in the middle of June.
So we are hopeful that within the next 4 weeks, We should get something signed off the first tranche. If not the whole thing, at least it will the signings will begin within the next 4 weeks is what we have told by Seshi.
Great, Ranjeet. Thanks. And have they by chance Or it could be, do you think it's do you think you'll be 25% below I think you expect the tariffs to come a bit lower, but how much lower do you think they could be? Thanks.
So like we have said in the past that the tariffs has to make sense for us. Otherwise, We will not sign. This is an option which is available to us and we can hold on to the option For more time, there is no hurry really for us to go out and sign because like we have mentioned and we have spoken in the past that The tariffs that have been discovered in the last 3 or 4 months or 6 months have been super competitive. And We don't believe that we would have liked to participate in the market at those tariffs. And our dividend has actually been slowed, right, because the markets have moved in the wrong direction As far as those tariffs are concerned.
So and we had the option at some point to look at the tariffs that were discovered and signed power purchase agreement close to those tariffs. And we had declined at that point saying that those tariffs are not appropriate in our view and we would rather wait for the correct tariffs. So at the moment, what has been what is being discussed is maybe a 10%, 15% kind of a reduction from our fixed tariffs. But the final numbers will be known only when we get the regulatory approvals and SECI signs the power sale agreements with the distribution company. Call.
But rest assured that we have declined in the past to sign when the tariffs did not make sense, and we will continue to do that mark.
And then on The call earlier you mentioned the potential to get into wind and storage. I was wondering if you might be able to share a little bit more on the Timing of when something could be announced and what the structure of that opportunity? My book is right. Thanks.
Phil, that's a very important question. And that's thanks for asking because wind and Wind hybrid, currently what is happening is that there are easily standalones, very small storage tenders, which are more exploratory in nature than commercial in nature. So we have looked at some of them. We have not yet taken part in any of those auctions because they're very small and mark. Like I said, however, as far as wind and solar wind hybrid projects are concerned, they are well established.
Wind has been around in India for more than 25 years. So therefore, it's a well established market. And mark? Morley and I have the experience of building more than 1 gigawatt of wind in our previous life. So therefore, we are very, very comfortable with the wind auctions and wind projects and wind construction and wind operations.
So we have taken part an auction for solar wind hybrid in the last 6 months. And there are a couple of auctions coming up over the next we understand in the next 4 to 6 weeks. So we will take part in those options. And if again, if we find the right tariff, We will certainly like to win one of those auctions, win both those auctions and build out The first wind or wind solar hydrant projects for Azure.
Great. One last question, if I may. As it relates to, I think trackers, you mentioned that you use trackers recently to offset the panel price increases. Looking ahead, do you expect trackers to be call. First of all, which tracker did you use?
And then also do you expect the share of trackers in your projects to increase meaningfully? And if so, Could it be something like 50% of your installations? Or do you think it stays at a meaningful small percentage? Thanks.
Ranjit, do you want me to take that?
Yes, please. Correct. So every project has
to be evaluated at its merit, right? So Currently, given the panel prices, there is merit in considering tracker. So we are doing that for 1 of our projects, as mentioned. Fund? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Depending on the tariff, depending on the location, depending on several other inputs, each project will be evaluated To determine whether a tracker based system makes sense or the traditional fixed system makes sense.
And on that basis, we will decide. So it would be hard for us to sort of peg a percentage for the future. In terms of which tracker, I think we had this conversation in the past as well where call? We are looking at a range of companies. So we are looking at 3 different companies and each of them is getting some portion of the contract going ahead.
And these are the big names which are there. Model. One of them is American, one of them is Chinese, one of them is Indian.
Okay, great. Thanks for the color. I'll pass it on.
The next question is from the line of Maheep Mandloi from Credit Suisse. Please go ahead.
Hey, hello everyone. Thanks for taking the questions. Ranjit, maybe one clarification on the FY 2022 guidance of Because I think in the April press release you had reduced it by around INR 700,000,000. Just wanted some clarification on that.
So in the current Numbers, we have included You're talking about the 7900 and 18900 that we have mentioned, right?
Yes, that's right. Yes. A couple of the $17,200,000 $18,200,000 in the April press release when you announced the sale of the Rooftop portfolio.
Pavan, would you be able to take
Yes, exclusive.
The 700,000,000 of higher increased revenues versus the cadence from April press release, I just want to clarify that. That's a result of just more projects coming online earlier than expected or Something else on that?
Yes. If you also see, Maheep, when we have qualified in R60 that this 20,000 second wave of COVID, are getting slightly delayed and of course MLRE is also considering excellent time. So as we stand today, we are not in a position to kind of Certain with a reasonable certainty, what exactly would be the maximum of new projects. So that is the reason we have very fast and we have qualified in our This will tell what would if you need to modify this annual guidance.
Got it. All right. Jan, I'll follow-up in detail Later on with you on that. And maybe just a other question from my side is just the as I mean, just looking at the CapEx mark to what we had in the last quarter last year, at least 10% lower by Mi' Mi'kmaq. How do you expect that to trend for the rest of the projects under construction, just given model prices have increased off late.
Do you expect any risk to it, Any cancellations from the model suppliers, anything like that impacting the CapEx in the near term?
So, very good question. So, we have negotiated module supply agreements and signed supply contracts with several manufacturers and suppliers. Some of them are being discussed and negotiated because there has been a rise in input costs and we understand that. And this is work in progress. In some cases, we have sort of agreed to a marginal increase.
In some cases, the increase is a little more than marginal. So those are still under discussion. Having said all of this, if we were to build a new project today, I'm not talking about the projects which are already under construction, which we have spoken mark in this release, but any new bid that I go for, if I for a new bid takes today's panel prices, Then the project cost would go up by about 10%. However, that's It's not something that would impact us directly for the projects under construction because we have contracts signed at lower panel prices and there is a little bit of discussion around Those very specific numbers.
Thanks for the clarification. And then maybe just like one high level question here and maybe Ranjeet, this is for you. We've seen a couple of assets changed hands recently in the Indian market and I think even today, international developer within Indian operation was taken private. So I guess to that, keeping that in mind, like are you seeing any Interest in privatization or any just from other entities just given the Valuation in the equity markets doesn't seem to reflect the opportunity ahead of you, especially in my opinion doesn't even include the 4 gigawatts of projects, which as I said, the PPS could be negotiated in the next month or so?
This is a very difficult question to answer. At the moment, there is no talk that we have heard between shareholders about taking the company private. And we have seen the share price in the last few months reflect What was perhaps closer to the true value of the company? And at the moment, there has been a pullback in the wider clean energy market and sustainable stocks. So I think this is call.
Perhaps a temporary I believe a temporary phenomena. And we will see the share price reflects the true value Sooner than later. I am more confident of that today than I was about a year back. Today, if you see our liquidity, right, I mean, we are trading When we joined the company, we were trading 10,000 shares a day. Today, we are trading over 300,000 shares a day.
Yesterday, we traded over 500,000 shares. So with that kind of liquidity, there does come a little bit of volatility. But the trend, I believe, is going to be positive. And public markets in the U. S.
Are a brilliant place, in my opinion. And we hope to
from HSBC. Please go ahead.
Yes. Thank you so much and good evening everybody. My first question is with respect to the overall cost. In your presentation, you talked about your cost on a DC basis costs fall into €0.39
Again, when you say these costs, you're talking about Azure specific projects, right?
Yes, yes.
It would trend up perhaps by A few percent, not much. But again, these are early days because these projects are under construction. And this is a constant negotiation and discussion with our suppliers. Call. So I can't predict what might happen 4 weeks or 8 weeks from now.
That would be special. But given where we are, we because we've already signed a lot of our contracts. There is some renegotiation happening. On that basis, we could probably estimate a few percent increase. But again, I don't know what will happen 8 months down or 12 months down.
Okay. If I were to assume the current module prices, then what would where should these trend
If you were to look at the current module prices and you go for a new project with a lot of other input costs have also increased. So if you look at all of that, one would reckon about a 10% increase as I mentioned.
39 could become 43
Yes, I just said 10%. But again, the important number here, cost per megawatt is 1 metric, Perhaps the more relevant metric would be cost per 1,000,000 units, right? Because if you are introducing trackers, if you're using other newer technology to improve yield, call, then the amount of energy generated per dollar of investment is probably more relevant as opposed to amount of megawatts installed. Call? So that may come into consideration once you deploy better NUO technologies.
And this is in the 10% you are including the cost of cracker
And better modules?
No. So that is it's very difficult. There are so many moving parts in our project also Depending on the choice of tracker, depending on the choice of module, the choice of technology of the module itself, all of them will impact the cost. So the endeavor is to get the lowest cost of energy as opposed to the lowest CapEx per megawatt, what I have indicated in terms of 10% is like for like, all else being equal, no change in technology, no change in anything, purely on account of cost increase on like for like items. However, if you go for better technology, you may pay more, But you might get better yields, right?
So that's a constant evaluation we do.
Understood. My second question is How much of the CapEx was capitalized in the current year? Yes. So if you look at our balance sheet slide, the PP and D has gone up from $95,993,000,000 INR to $108,847,000,000 INR. So that delta is something that has been capitalized if you
margin? If you compare March
2020 versus March 21. Yes. So and if I look at your CapEx, it is roughly INR 18,000,000,000, but the What is being commissioned is probably half that number? Right, right. Because commissioning typically Typically, we have to incur a lot of costs which remains in CBIP and then we commission.
So even if it is in CBIP, it is capitalized, right? Mark. So that is the way we are reporting trust, okay. So, INR 13,500,000,000 is a ballpark number where what you would expect RUB13.5 billion would be the cost capitalized for 3.69 Meton, is that the right comparison? So maybe we'll have to check the breakup exactly how much of the total CapEx is capitalized and how much is in SIVIC, that number is not related with me.
Mark. But definitely this is the total increase in gross profit, part of which is for commission project and part of which is still under construction. And therefore they are not comparable with the recommissioning. Okay. I can take that later, Vivek.
My last question, Renish, is for you. So you have still 4 gigawatt, it's still 100 megawatt session in terms of tariffs. Margin. So on the current module prices, do you think 2.93 is a number which you will be comfortable with or do you think
call. Current prices that exist, all indications if you talk to the polysilicon suppliers, you talk to the wafer suppliers, you talk to the cell suppliers, you talk to the module suppliers, Indications are that this is very temporary and indications are that this is easing out or starting to ease out already And the module manufacturers are seeing inventory buildup. And so therefore, we don't believe that this is a continuing trend that Say for example, if the STRISE today is X, like Murali mentioned, around 10% higher, that tomorrow it will be 15% or 20% higher. That is not the expectation. We expect that normal service is going to resume in the next few weeks and we will see a steady moderation in the price of modules as we go towards the end of the year or beginning of next year.
So if we sign like I'm saying that Agreements will need to be delivered by contract 2 years from now, which means that we are going to be buying modules for those contracts only 6 quarters hence. So there is plenty of time. We do not expect that the module prices will rise in this period from the current prices to higher numbers. We do believe that they will moderate. We don't believe that in this quick time in the next 4 to 6 quarters, we believe that it is Perhaps not possible to see numbers that happened just post COVID, right, when suddenly the prices dropped from pre COVID levels.
Call. But I would not be surprised if we are able to see pricing, which is pre COVID levels sooner than later, as in over the next 3, 4 quarters. We should be able to come back to pre COVID levels at least is our expectation. And of course, it's a crystal ball to some extent, But this is not the market seems to be suggesting. This is what the market seems to be telling us.
My last question just if I add on your sale of rooftop subsidiary, do you see any bottlenecks to that sale because There seems to be some sort of comment that says that Radia is you need to reimburse Radia if the asset transfer does not go down. Any major hurdle that you're looking at risk of potential results in this?
So, Philippe, the Radiance team is super excited about this portfolio. They have got a great deal. They have got a great deal. It's a transaction where buyer and seller are both happy. So they are already engaged with us.
They have a very good operating team and we are very confident that they will make a success of this portfolio, perhaps even better than what we have done. And they seem to be very motivated and committed. So we don't believe that there will be any issues. There are always issues in getting some of the CPs approved. Some take a bit longer, some are a bit faster.
But and you know how unlike I mean, this is 150 odd megawatt portfolio, If it was a ground mod portfolio, it would be 1 Parpertise agreement. In case of rooftop, it spends the Parpertise agreement, Right. And therefore, it does take time to get all the approvals and all the sign offs. So That's
why we have said that it
will take till September. When we mentioned about the contract terms that you have specifically referred to, Those are contract terms because obviously there will have to be some contract protection for both sides in a situation when things go south and therefore we have been And we have been transparent in what their contract conditions are, but there is obviously no fear because both the buyer and the seller are motivated to make this transaction a success.
Yes. But you're still yet to get paid for it, right, Sven?
Yes, of course. I mean, when the transaction closes is when we get paid.
Thank you.
The next question is from the line of call, Elvira Scotto from RBC Capital Markets. Please go ahead.
Hi, everyone. I just wanted some clarification on the fiscal year 2022 guidance. So in terms of that guidance, what is embedded in the guidance relative to your Projects under construction. So what is the timeline for completion for each project that's embedded in your full fiscal year guidance.
Hi, Alwita. So, yes, if you look at our presentation, earnings presentation. If you go to slide 5, it was, I think, slide 5, which is the project under update. We have mentioned how the 9.50 odd megawatts are likely to be commission, which is the second half of the Rajasthan 6 projects, the Rajasthan 8 projects and the Rajasthan 9 projects and the TAM projects. So this 9.50 odd megawatts that will get added mark to our capacity in this time.
So if, say in Manila, we do only this, we don't do any other we don't do anything else, Then we should be seeing us at our guided number by the end of this fiscal. So this is what is In our case in our belief this is the worst case scenario for us.
Okay. The reason I'm asking is, I believe you Still maintain the same fiscal year guidance when you've actually pushed out the timeline on 300 megawatts?
So the reason, Elvira, is that it was supposed to be done by May of 2021. That means we should have completed the second 300 megawatts By now, so that is not going to happen. Obviously, it does not happen. We are in June already. So we expect that it will get done in the next quarter.
But the next quarter is still part of the fiscal year. So whatever push has happened on these projects, there has been a slight push on each of the projects compared to last time on account of the fact that we practically did very little work over the month of April May and partly in June. So therefore, the fact that we could not do much work in these 2, 2.5 months as if there was I was going to the 2nd pandemic wave. So because of that, everything has been pushed back a little bit. But we still expect All of these projects will get done in this fiscal year and that's the reason why the target is the same.
The reason there has been a change between our guidance from February to now is that we have just corrected the guidance for the sale of the rooftop projects. Earlier, we had included the rooftop projects. Now we have taken those rooftop projects out. Otherwise, as far as the ground mount portfolio is concerned, There is no change as far as the fiscal is concerned.
Okay. And then just to Sorry to keep asking on this, but just to clarify. So the fiscal year guidance, is that the amount that you expect In this year or is it a run rate amount exiting fiscal year 2022?
So this is the installed capacity As on 31st March, 2022.
Okay. That's helpful. And then just in terms of on the hybrid projects and the wind projects, How are you thinking about returns on those projects relative to returns on solar only projects?
So, the market is fairly mature on both the solar wind and wind hybrid solar wind hybrid side. So, we expect similar returns on whether we do solar or wind or wind hybrid. The technology is fairly well known. The players are very well known. The risks are very well known.
So therefore, We don't expect there to be a differential in the return. What how it helps us really is in 2 ways. It helps us because it increases mark. Our addressable market because of the fact that earlier we were taking part only in solar options and now we'll take part in wind and wind hybrid, wind solar hybrid options also. So it increases our ability to win projects.
And the second thing it does help us in is because this is where the technology is headed. We are looking at higher penetration of renewable energy in the grid. And as we have seen across the world, When that happens, the I know the grid managers have difficulties and slowly it's moving towards It was dispatchable renewable energy. And when you do dispatchable renewable energy, that can typically happen only with some sort of storage, whether it is battery storage or mechanical storage or pump storage or whatever the storage facility might be. And for storage facility to work, You need to I don't typically manage the storage in the morning peak hours and the evening peak hours.
So the evening peak hours typically gets The storage gets filled by solar and the morning is filled by wind because typically in India, The solar energy gets dispatched during the day, whereas wind is largely in the night, So that you can actually use the same sort of storage system and use it once in the evening and once in the morning. So therefore, wind is a very important ingredient for the dispatchable power to be successful in India and we need to be in that space.
Call. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you, everyone. Thanks for participating in our conference call and call. Any time for more questions, more comments and for any one to one discussions that you might want to have with us call for clarity and anything that you might want clarity on. So look forward to interacting with you more and have a great
call.