Ladies and gentlemen, good day, and welcome to the JSW Energy Limited Q2 FY 2024 Earnings Conference Call, hosted by Batlivala & Karani Securities India Private Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, 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. Rajesh Majumdar from Batlivala & Karani Securities. Thank you, and over to you, sir. Yeah. Good evening, everyone, and thanks for the opportunity. We have the conference call of JSW Energy Limited today being taken by the management team, comprising of Mr. Prashant Jain, JMD and CEO, Mr. Pritesh Vinay, Director of Finance and CFO, and Mr. Vikas Jadhav, Head IR and Treasury. First of all, sir, congratulations on an excellent set of numbers. Without much ado, let us now hand over the call to Mr. Prashant Jain for making his opening remarks. Thank you, sir. Thank you, Rajesh. Good evening, ladies and gentlemen, and it's late in the Friday night. The power sector has been in the news for the good reasons now, and to start with, the power demand during the quarter went up by 13%, and for the year till date, it was up by more than 7%. In the month of October till date, the power demand is up in excess of 19%. All in all, we have been seeing a very robust trend of very high power demand, and because of which we are seeing very high power deficit, the kind of a deficit which we saw in 2004-2006 period. Remember that time, the grid capacity was minuscule at that point of time, close to 80 GW-85 GW, and today it is 200 GW. The kind of a power deficit at this kind of a grid size is translate to a large shortage of the power capacity. During the quarter, we saw a total capacity addition of 3.5 GW and year till date, 9.3 GW, and now we have a total installed capacity of 425 GW. The merchant volume during the quarter was up by 26% and year till date, 20%, and power tariff for the quarter was 5.9 on an average. For the company, the power generation was up 29% at 8.6 billion units due to higher renewable power generation as well as higher merchant sales. The company clocked highest-ever EBITDA of INR 2,008 crore, and highest-ever cash profit of INR 1,180 crore, and profit after tax of INR 850 crore. The merchant tariff during the quarter for our short-term sales was INR 8.17, as against, as I just mentioned, INR 5.90 of the exchange price for the quarter. This demonstrates the capability of the company to do the bilateral contracts at a 35% higher tariff than the merchant tariff available in the exchange, and which also contributed a lot for this higher EBITDA. During the quarter, we commissioned 86 MW of SECI X capacity, which completed total year-to-date commission capacity of 216 MW. All our existing 2.4 GW projects are running as the schedule we have guided in the previous quarters, and we will be seeing all those capacities getting commissioned in the current quarter, current financial year, and next financial year, and as per the scheduled timelines. For the Ind-Barath, the boiler light-up has been done, turbine is ready to be synchronized in the next seven days timeframe. However, the transmission line, the one or two bottlenecks are being sorted out. We expect next month the unit one will get commissioned. Unit two will be commissioned as scheduled in quarter four. Mytrah did a very good exceptional performance in terms of the eligibility as well as generation. Generation increased by 27% year-on-year, and which contributed significantly to the EBITDA. I had guided for the company that we are running ahead of the schedule in terms of the integration as well as the EBITDA improvement program, which we guided to the Street. You will be seeing in the current financial year a lot of the hard work has been done, and then that will be flowing into the bottom line of the company ahead of the schedule. Receivables improved 10% year-over-year, both for the consolidated as well as including the Mytrah. That performance is going to further improve in next three to six months timeframe. The net debt of the company stayed at INR 24,260 crore, and with the debt-to-EBITDA of 3.3x without CWIP and 4.6x with CWIP. Weighted average interest cost reduced from 8.66% to 8.51%. There is an interesting development which we have now to share with all of you is we have been guiding for the next batch of our growth. We have disclosed that there is a visibility of 10 GW, which is getting commissioned by December 2024. Now, JSW Energy has signed a MOU with JSW Steel for building 6.2 GW of the renewable capacity, 2.7 GWh of the storage capacity, and 85,000 tons-90,000 tons of the green hydrogen for manufacturing green steel. This 85,000-90,000 ton of green hydrogen will be associated with additional 1.8 GW of the renewable capacity and 1 GWh of the storage capacity. All these things will be done by 2030. This entails a total within the group around 9 GW of or 8 GW of renewable capacity, 3.7 GWh of the storage capacity, plus the green hydrogen and green oxygen. We will be deciding in due course about the pricing mechanism. What I can explain is that, historically, whether it is third party or the group captive, we have been doing all our projects at at least mid-to-liquidity IRRs. With this, I would like to open the forum for question and answer. Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Atul Tiwari from Citigroup. Please go ahead. Yes, Congrats on very good set of numbers. Just one clarification on the merchant sale. Fair to assume that this was done from Vijayanagar and Ratnagiri project, right? That's right. Right. What was the quantum behind this INR 8 merchant sale? I mean, how many units, et cetera? Sorry, your results came just now, so I did not have a chance to look through the PPT yet. You're talking about. During this quarter [crosstalk] the t otal MUs that are sold in merchant market? Yeah. What was the, say, the input landed price of imported coal for you, if you could hint on that? Those are the data points I need. On the imported coal, let's take that first. If you see the API4 Index, which is a benchmark for the 6,000 Kcal high GCV coal, that was actually down 65% year-on-year during this quarter, you know, to an average about $113 per ton compared to the same time last year, right? You will be able to kind of, you know, derive that because we do, of course, just to, you know, reiterate what we have shared in the past, for Ratnagiri, we do, you know, a blend of low GCV and high GCV. For Vijayanagar, because it is inland and there's an additional inland transportation cost involved, we typically try to go with maximum high GCV coal. Therefore, you know, you'll be able to, if you look at the standalone financials, you'll be able to compute the implied fuel costs. We will not be able to disclose that separately. Coming to your first question, we sold roughly 660 million units of total in the short-term markets during the quarter. Okay. Now that the power market appears to be tight, so I mean, do you have bilateral contracts for third and fourth quarter as well already, or do you plan to kind of? On a rolling basis, Atul, you know, because it works both ways. Like, you know, typically states are also in the past, I mean, reluctant to go for, you know, longer-term bids. We have seen seven-day, 15-day, 30-day, but we have not really seen anything going beyond 30-day. Yeah. But I think it's a matter of time, and historically also, if you see, you know, typically third quarter tends to be weaker. I think, Prashant here. The reason why I explained this point is not from the point of view about the differential we have garnered. The point that I told is that power shortage is for real. That's why most of the DISCOMs are trying to lock in the power instead of waiting to secure it into the Day-Ahead Market, because there is no reasonable assurance to get the availability of power. The reason is to explain this point is to look at from that point of view, not from the point of view of the any other way. Yeah, I totally agree. Just one more on that. Now that Ind-Barath unit one is going to be commissioned next month, you have already, I mean, tied up on the bilateral side or like you want to keep it completely merchant, or what is the state of PPA, I mean? I know in past you have spoken about keeping it open and trying to take advantage, but any thought process on that? We would like to, not to say anything about that part, because on a day-to-day basis, we take decision, and what is in the interest, we will be, we will be doing it depending upon the market scenario. The point is that it's a really tight market, and it will remain a tight market for many months, quarters, and years. That's so, that I agree. Any comment on the coal arrangement for, you know, Ind-Barath? I mean, have you managed to tie up anything from CIL or any other source? We source the coal from the nearby mines, and we already have the coal available with us in various auctions. We have already secured the supply till January, and beyond that is already tied up. For the year, whatever we are going to produce, we will be having the coal, which has been already secured from Coal India or its substitutes. Through the auction mechanism, including SHAKTI tranches? Yeah. Okay. Okay. Okay. Thank you, sir. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may please press star one. The next question is from the line of Lavina Quadros from Jefferies. Please go ahead. Yes, hi. Congratulations on a good set of results. Just wanted some clarity on Mytrah. How is that acquisition ramping up, and is it in line with what you were predicting of INR 1,4 50 crores? I think we guided higher numbers than that in our acquisition presentation, where we talked about INR 1,650-odd crore of normalized EBITDA, which will be achieved by FY 2025. Whatever ramp-up plan for the increased energy as well as reduced O&M costs we had guided for, we are running ahead of schedule. That is what I explained that by the end of the financial year, you will realize that majority of what we guided for in FY 2025, you will see in FY 2024 itself. It's doing pretty well. To add to that, Lavina, you know, of course, you know, I mean, there's a lot of, as Prashant already said in his opening remarks, he used, you know, the performance improvement asset optimization plan. Just to give you a flavor, you know, in this particular quarter, Mytrah generation on a like-to-like basis, year-on-year basis, was actually up by 27%. That was primarily led by, you know, higher machine availability, which improved by close to 700 basis points on a year-on-year basis, and machine availability for the wind capacity stood at about 97% for the quarter. You know, similarly, on the solar side, we actually, the actual generation was, you know, better than the P90 generation. You know, stood at close to, you know, 165 million units. If you look at the delta increase in Mytrah generation improvement, almost half of that was on account of, you know, focused interventions in terms of getting higher throughputs, ensuring higher availability, and adequate spares management and O&M management, et cetera. All of that is leading to better generation, hence better revenue, optimization of O&M costs. Therefore, even at the EBITDA level, what Prashant was saying, that if you go back and listen to the transcript or the recording of the call that we had done for the fourth quarter of fiscal 2023, when we had consummated Mytrah acquisition, we had guided to hit that normalized EBITDA run rate in about 18 months post-acquisition. On a run rate basis point of view, we are actually ahead of those timelines, and all of that is reflected in improved EBITDA. You know, Mytrah reported an EBITDA of about INR 557 crore during this quarter. Over and above this, we, of course, have talked extensively about the benefits of lower financing costs due to a benchmark debt refinancing and debt resizing. Therefore, you know, Prashant mentioned in his opening remarks about how the weighted average interest rate during this quarter on a sequential quarter-on-quarter basis has actually gone down, despite, you know, the rate cycle not turning and MCLR is actually continuing to pressure upwards. That was because the full impact of the debt refinancing at Mytrah was flowing through. Just to add to that and close the loop, as Prashant also touched upon that, is in terms of the receivables, what is happening at Mytrah portfolio. On a year-on-year basis, Mytrah receivables are actually down by 50%, you know, compared to the same time last year. I think that all in all, operationally, financially, it's been a very robust integration and optimization layout of the Mytrah acquisition. Okay, thanks. Lastly, on green hydrogen, would you like to elaborate a little bit on, I mean, you're expanding the plan, you'll have to import the electrolyzers? Anything else you'd like to add on that front, on the ecosystem? Lavina, I will suggest that give us some more time. I think with this MOU, the whole objective is to first bring the visibility from 10 GW-20 GW and also electron to molecule business. Now that is put into the place, so maybe in couple of months you will see that we are talking about each and every item in detail. However, already our first green hydrogen plant is under construction. Equipments have been already ordered. We are going ahead with the alkaline technology. We are importing it from the Chinese manufacturer, and the construction has already been started, and we are expecting that by March 2025, this will be up and running. Okay, great. Thank you. Thank you. We have the next question from the line of Anuj Upadhyay from Investec. Please go ahead. Yeah. Thank all for the opportunity for us. Could you elaborate on the status on the PSP side? Sorry to interrupt, sir, but the line for you is not very clear. I request you to please use the handset while you're speaking. Is it better now? This is much better, sir. Please go ahead. Okay. Could you elaborate on the current status on the PSP side? We have signed LOI. We have got the LOI for 2.4 GW, so exactly at which stage of development we are in? Is this only across in Maharashtra or this 2.4 GW factors in other states as well? Yeah. Thank you, Anuj. All places we have already started the work, and right now, the kind of the work which we are doing is in terms of the regulatory approvals as well as the ordering of the equipment. Ordering of the equipment are in advanced stage, and regulatory approvals are with respect to the forest and environment clearing. One project, already the EC has been, you know, is in final stage. The meeting has been concluded, and we will be receiving EC within the current quarter, and also the forest clearance will be also available by next quarter. We are expecting once EC and FC are in place, in early next financial year, we will be starting the construction. By the time the project equipments will also be ordered. Other than that, there are total six projects which are in advanced stage of similar regulatory approvals and also the plant ordering. Because later on when we see that there will be a lot many bids which will be coming up quickly, we want to create a complete preparation. There are total six projects where we are moving very aggressively. They are aMOUnting towards into a value of 7.8 GW of the capacity but with around six and half hours of average storage time. Those are being done in parallel with respect to Environment Clearance, Forest Clearance, land acquisition, and also the ordering of equipment. We will keep them ready, and as soon as we are able to lock in the bids to supply those storage capacity, we will immediately start the construction and issue the notice to proceed to the equipment manufacturer. This is how the status of PSPs. Will it be possible to specify the quantum for which we are awaiting the EC next year, sir, on which we believe, you know, we expect to begin the construction work? What would be the quantum for that? We will not start the construction until and unless we win the bid and do the financial closure. Please understand that what are the various enablers to start the project of PSP? First project is that, first is that you get the allocation, second is you get the regulatory approval, third is you win the bid, and fourth is you do the financial closure. These are the things. What we are doing is the allocation part is done, we are completing the regulatory approvals and then keeping the, you know, ordering ready. Now, there will be the two milestone which we need to achieve before we put that into the construction, is winning the bid and doing the financial closure. Once we win the bid, then at that point of time, the turnaround time will be very, very less to put them into the construction. We will be able to tell you as soon as we win more bids. Fine, sir. Lastly, all these seven projects are in Maharashtra, or we have across other states as well? Across other states, so it's in Karnataka, and it's in Maharashtra, it's in UP, and it's in Rajasthan. These are seven projects which are under advanced stages. Okay. If I may please, you know, ask another question which is related to your module manufacturing thing. Like what we heard in the last quarter, that you have probably shifting the base to another state, could be Rajasthan. Any development over there, sir? It is in Rajasthan. We have already acquired land, boundary has been done, equipment has been ordered. We have also secured a incentive package from Government of Rajasthan, and it is now under construction. As per schedule of March 2025, it will be up and commissioned. Oh, fine, sir. This will be for 1 GW? Yes, right. Okay. Thank you, sir, and thanks for the opportunity. Thank you. Ladies and gentlemen, you may please press star and one if you wish to ask a question. The next question is from the line of Sumit Kishore from Axis Capital. Please go ahead. Good evening, Prashant and Pritesh. My first question is on the MOU that you have signed with JSW Steel. The generation capacity of 6.2 GW is basically going to explain 60% of the increase that you do from 10 GW to 20 GW by 2030. This is just formalizing the contribution that steel would have to your capacity expansion beyond 2024? Yeah. So, this is 62% of that capacity, plus in addition to that, another 1.8 GW, which will be coming up for green hydrogen manufacturing also. Right. All in all, total around 8 GW we have a visibility, plus we will be doing SECI projects or maybe acquisitions, maybe we will be having C&I portfolio. Everything is available in front of us. Whatever is remunerative, we will continue to lock it. You can really see that 80% is having a clear visibility, which will be within our control. Right. Now given that you have 80% visibility, is there, you know, any sense of whether the 20 GW number itself is going to get upgraded? Sumit, I think let's talk about it maybe one year from now or one-and-a-half year from now. If we see that we need to revise our guidance and come out with a strategic 3.0, we will be certainly doing that. If you ask me personally, as in my confidence, yes, there is a possibility that we will be doing better because of better balance sheet, better cash flows, and better visibility. At this point of time, we stick to our strategy 2.0. Right. The energy storage projects that are mentioned in the MOU of 2.7 GWh, are these going to come from your pumped storage hydro capacity or is it going to be new battery energy storage system projects? What is the question? It will be some combination and depending upon the needs. We are seeing that 3.7 GWh will be for JSW Steel perspective, 1 GWh for hydrogen and 3.7 GWh for coupled with the RE generation. But it will be a combination for sure. Right. This 2.7 GWh is separate from the storage solution that you will have to combine with the RE power solution for green hydrogen? That's right. Right. Right. I mean, in JSW 2.0 strategy, you had talked about an INR 20,000 crore kind of an EBITDA by FY 2030, almost a 6x-6.5x increase over the INR 30+ billion rupee run rate that you were doing. That number, if I were to just, you know, think aloud here, has an upside with this MOU that you have signed, because there are fresh projects which were added to the tally. Yeah, that's true. Great. Also, if you could speak about, you know, the battery energy storage system project in terms of progress there. Have you tied up, you know, the battery, et cetera? How close are we to actual implementation of the project? Because you marked this for completion before CY 2024 end. An associated question on the, you know, the SIGHT program, is there any progress in terms of bids being submitted, and when is progress expected there? We are absolutely ready. I think there is a little bit of delay on signing the PPA because there are certain approvals which SECI is taking. Since it is being the first-of-its-kind project where Central Government is also giving certain subsidy to the DISCOMs who are availing this, and there are certain procedural aspects of that. Because of that, there is a delay in signing the PPAs, which can happen anytime. Once we sign the PPA, we will be immediately awarding the contract. We will execute the project as per the schedule because the time taken will be not much, and other things are already ready. We do not see any kind of a challenge in terms of the execution of the project or on the timeline where which we have guided for at this point of time, but there are the procedural delays. Right. How is that SIGHT program progressing in terms of, you know, new opportunities coming up there? The site, yes, it's work in progress. You know, as and when the tender under the National Green Hydrogen Mission is done, we will definitely evaluate. I believe, you know, originally, the bids were supposed to go sometime in September, and then they deferred it. Let's wait for that. Yes, I mean, that is another potential optionality. You know, with this MOU that we have signed with JSW Steel, it puts us in a very, you know, a relatively better spot to participate in the SIGHT tenders because you now have an end-use project to be eligible for. It's almost like a PLI equivalent scheme that what SIGHT really is, right? We will actively be looking at that as and when it comes up. Because most of the people who are talking about the green hydrogen, they do not have any buyer available to them. What this MOU does is there is a buyer, there is an application to manufacture green steel, and so it puts us in an absolute competitive advantage. Yeah. Finally, on the 300 MW, 2.4 GWh pumped storage hydro project, where you have, you know, the LOA in place, what exactly, you know, is the stage of progress on the ground? What is- I just explained to the previous speaker. I think Amit was asking the similar question. If he missed it, I will once again repeat it, that we are in process of taking the regulatory approvals, EC and FC, which we are expecting that by end of this financial year, those will be in place. Equipment ordering is going on, and we are expecting that early next financial year, we will be putting that into the construction. As I also mentioned, that in order to avoid such kind of a situations later on, we are already working on said total. Including these two projects, there are five more projects, total seven projects. We have already started these preparatory activities to take various regulatory approvals, land acquisition, as well as the ordering of equipment. Once we secure the bids and then do the financial closure, those projects can be put into the construction stage ASAP. Very clear. If you start construction on this first 300 MW, 2.4 GWh next year, it would take another 24 months to complete it, or? No, it will be taking 36 months. Thirty-six months. 36 months-48 months. Depending upon the project, one project we feel that 36 months, another could be 40 months-45 months, but we will be guiding that in due course. Okay. Thank you so much, and wish you all the best. Thank you. Bye. Thank you. Moderator, can we please take the last question, please? Yes. The last question is from the line of Rajesh Majumdar from Batlivala & Karani Securities. Please go ahead. I had a couple of questions. Is the company looking out for any more coal assets with no PPAs under NCLT or any other such assets available or are we looking at them? That was the first question. Rajesh, we continue to look at various opportunities, and as and when we find any good opportunity, we will certainly try to, you know, lock in. For record, you can consider that anything and everything which is available in the power sector, we are interested in it. You do find any such opportunities still available? That was my question actually. That's a tricky question, but you know, there are a lot of opportunities which are there, but which are not available at a reasonable price. There are certain opportunities which are available for reasonable price. At unreasonable price, a lot of things are available. Okay. Sir, my second question was on the JSW Steel 6 GW addition. In fact, I was also in the JSW Steel call a while ago. The company has clearly mentioned that the CapEx funding for this will be a shared kind of funding. Would you highlight how this is gonna work out in terms of the funding by JSW Energy and the way it's gonna operate? It is as per the act wherein there is a captive power policy wherein these projects have to be housed under a SPV. The procurer, power procurer, has to take 26% equity into that SPV and balance will be by JSW Energy. Based on that PPA, the debt will be coming into the SPV for supply of the power. This is how it is going to be, and this is how all our existing power projects, whether it is thermal or renewable, group capital structure. Yeah, Rajesh, it's just exactly the same what we are doing for the 958 MW in the current pipeline of a projects under execution. It's a similar model under the captive scheme. Okay. When you give the CapEx guidance, you're obviously including this inside that, right? Yeah, yeah. It will be similarly, but we have already guided for a long-term CapEx plan, which is under the Strategy 2.0, and so it will be guided on the plan. Nice. That is helpful. Thank you so much. I don't think there are any more questions. Thank you very much, sir, for the opportunity, and if you would like to make some concluding remarks, you can conclude the call. No, thank you very much, ladies and gentlemen, and happy Navaratri and happy Dussehra to all of you and your family. Thank you. Thank you. On behalf of Batlivala and Karani Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.