Ladies and gentlemen, good day, and welcome to the Adani Energy Solutions Limited Q1 FY 2024 Earnings Conference Call, hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhineet Anand from Emkay Global Financial Services. Thank you, and over to you, sir. Thanks, Lizan. Good afternoon to everybody. I'd first like to thank management for giving us this opportunity to host the call. Today, we have with us the top management, represented by Mr. Anil Sardana, MD, Mr. Kandarp Patel, CEO, Distribution, Mr. Bimal Dayal, CEO, Transmission, Mr. Rohit Soni, CFO, Mr. Kunjal Mehta, CFO, AEML, and Vijil Jain, from IR. I will hand it over to Mr. Sardana. Over to you, sir. Thank you, Abhineet. Thank you so much. Dear analysts, friends, and investors who are there on the call, welcome to Q1 FY 2024 Call. Let me start with the name change, so that we can then build on that, and you would have got the press notes, so therefore, many of the inputs that you already have with you, we will be happy to further take different details of that during the conversation today. We had shared some time back that Adani Transmission, which started in 2015, expanded quite well between 2015 and the current times, when it became the largest private sector transmission company in India. Besides that, from 2018 August, we added the first distribution area to Adani Transmission, then subsequently in 2020, we added another distribution area of Mundra. Over a period of time, the company added the transmission and distribution business. In the recent times, it saw the opportunity to grow into smart meters, into meeting some of the energy requirements of open access and captive customers. In addition to that, we started to see as to how the energy requirements will pan out over a period of time. It dawned on us that there are going to be areas which will cause tremendous spurt in power demand, particularly backed by Government of India policies related to manufacturing and manufacture in India, or Make in India program, as it is called. In that, we saw advent of some of the large brands and customers in the areas such as data centers, semiconductor manufacturing, aircraft component manufacturing, manufacturing in the value chain related to renewables, manufacturing in the value chain related to change in molecules, from hydrocarbons to green hydrogen and different renditions. It was clear that now the demand for energy will not just necessarily be electron, but also molecules. Also, we need to be mindful of the fact that while the distribution business could grow, but the state-owned enterprises are not going to let go that so easy. We decided two-pronged approach. One, was that we will apply for second license, which we did in three areas, which you are all aware. Just to fill you up, it's the two of the contiguous area to our existing platforms, which is Navi Mumbai, contiguous to our Mumbai license. Saurashtra area, contiguous to our license in Mundra. The third one is, where based on different studies, we added to our portfolio, the request for second license in the western UP, which is from the Ghaziabad all the way to Jaipur, Bulandshahr area. Considering the fact that distribution business had already got added in 2018 and 2020, then we started applying for second license, and that we were offering energy solutions, both in terms of meeting the open access and the requirements related to captive customers. As also we recently added smart metering portfolio, we decided that the name does not manifest the activities that we were performing. We had outgrown the name Adani Transmission. For that reason, we deliberated and based on consensus, adapted Adani Energy Solutions Limited as the name, which will manifest the current as well as future business of trading and pursuing electron as well, as well as molecules. Friends, that, that is what we did during the recent times. From July 27th, this company is going to be titled Adani Energy Solutions Limited, and therefore we are happy to have you on the call for this company. Coming to the other parts, let me now go into the next important area that as a team we have been pursuing, which is the ESG part. Amongst the ESG, of course, looking at inclusively, we've been very. We lost? No, call again. Call it. It's on. Sorry, I thought, we have got disconnected. Can you, can you confirm that my voice is audible? Yes, sir, we are able to hear you. Okay. Moving on, on the ESG front and being inclusive, we focused on the safety aspects and despite the business which is cross-country, that is something that we take pride in terms of various initiatives and various aspects of safety that we constantly prowl on, and that will continue to be one of our key focus of ESG. However, moving on to the acronym, the way it describes itself, the environmental, social, and the governance aspects are key to our current operations. We have decided that as an institution, Adani Energy Solutions Limited will continue to aim to be within the top 20 global companies in its utility business with regard to its scorecard. Therefore, several aspects in each of these three heads have been taken up to benchmark levels. That is reflective on the recognition that we have got from different quarters. It is, it is important for me to mention that amongst them, some of the scores done by international agencies have been very heartening. In the last quarter, the FTSE score has improved to four, up from the slightly lower scores than three. That's a major movement upwards, and that actually takes us to the top echelons of utility companies globally. I will not typically talk about the other rewards and awards, but mention one singular aspect, which is the study done by PFC on behalf of Government of India, where through McKinsey they did the rating of different DISCOMs in India. I'm happy to bring to your notice that Adani Electricity Mumbai DISCOM was rated India's number one power utility. That's, that's the hallmark of how we are pursuing the agenda on different aspects related to environmental, social, and governance criterias. In addition to that, of course, to make sure that our commitment to bulk sourcing of green electrons, clearly again, is shown in the fact that we have now exceeded beyond 30%, which was our commitment. The commitment that we gave in the sustainability-linked bonds has only been met, and we are happy that we will continue to take simpler strides and soon cross 50% in the in in the commitment year that we have conveyed before. Moving on to the operational aspects very quickly, I will not take much time because you have already got the press note. But, mention the fact that we continue to grow well. We continue to register and perform solid with regard to the existing assets. Both in the transmission and distribution side, we have demonstrated availability, which has earned us every nickel and dime of incentives that we had to earn. Also, we have now reached very close to our target numbers of 2022, which was 20,000 circuit kilometers. Already 19,778 circuit kilometers is either operational or under execution, and very soon the balance part will also get added to the portfolio. We are toying that this kind of growth will continue in the transmission because there is so much of opportunity in the days ahead in terms of pipeline. We're sitting with already won orders, which is INR 20,000 crore, which is, which is INR 200,000 billion. Therefore, we are in a very comfortable situation to make sure that the future orders are backed with thresholds of returns being met. That will be the key criteria of how we will pursue business in days ahead, though, of course, the growth will continue to look up. On the financial aspects, you've got the details with regard to the fact that we have had the first dividend outflow from Adani Electricity to ATL, which in fact, is one of the reason why the tax outflow of dividend tax was there. Therefore, that was one area that, in fact, in a similar basis, suppressed the ATL tax number. Otherwise, on ground, the performance has been as good. The cash profits from both the businesses continue to give us enough meat for us to continue our growth without increasing the debt burden, and making sure that we maintain our net debt to EBITDA within the discipline that we have talked about, and therefore continue to be investment grade. That is what we will continue to do even in the days ahead and make sure that we stay steadfast with regard to that promise. On the smart meters, you would have noticed our early success. We already have orders worth 4.6 million smart meters, with close to about INR 58 billion orders in hand. More than double of that is where we already have the pole position of being declared lowest, but we are waiting for the orders. We will share with you as and when those orders get confirmed. Smart meters will continue to be one of our key build outs. As you see today, we have four build outs in terms of growth. One is, of course, the transmission line, where we have healthy orders in hand and a good growth pipeline. The second one is in retail distribution, where we have the ongoing CapEx, which will continue of similar levels as we have been doing last from last few years. In addition to that, we have those three licenses that we look up to. That's the second vertical. The third one will be the smart metering, where all the work related to putting those smart meters, making sure that we have the Head End and the back end managed with our experience in our distribution area. Also gradually analyze the data as we, we stack it together for longer periods of time, for us to then do the analytical work around that, and with the permission of the clients, then do upselling, cross-selling opportunities across using that data. That's the third. The fourth one is the energy solutions, where we will do work around the customers, where we can provide them promissory estoppel much lower than the cost of the grid, and take the onus of meeting 24/7 requirements, including some of the green electrons, in terms of meeting their RPO obligation or enhanced obligation as they would want. In addition to that, some of the gurgling areas like cooling solutions, we will provide from in-house because we have a very strong input that the country will add close to about 100 gigawatt on account of cooling solutions up till 2030. Which is a huge demand, and in a way from the cliché air con concept, we will be able to provide the solutions by actually the flow consumed by customer on managed service basis. We have started doing that with some of the builders, builder community in Navi Mumbai. We will, we are also doing some of the projects in Ahmedabad along with Adani Realty. These projects, in terms of complete air con solutions on a district level basis, will also improve the various hazards related to fire, greenhouse gas emissions, et cetera. Therefore, will make us more benign and add to various credits under the UNFCCC credit program, CDM program. Those are various aspects I wanted to touch base. All in all, a good quarter to have got our, our act quickly, and also, new name, which with, with the enhanced wing span, as you would have noticed. Therefore, the company is well poised to now work to making sure that we are able to offer comprehensive energy solutions, both in bulk electron- trading or, or, or movement, as well as retail electron, retail electron and gradually into the overall energy paradigm. I'll stop here and look forward to your questions, and based on that, we will be able to perhaps disseminate whatever I may have missed out. Thank you, and once again, I welcome you all. Thank you. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question, please press star one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star 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. The first question is from the line of (Kudimi Damon) from (MP2). Please go ahead. Yeah, thanks a lot for the, the detailed stuff that you gave. I just want to understand the transmission side, over the next one - one and half years, it would take you what type of bids are going to be there. slightly then longest term, you know, apart from this one and half years. view on a slightly next five to seven years, what could be the key thing for an all-India basis I'm talking about? Hi, and good afternoon, everybody. I just want to take a step back before answering your question here. Maybe add a little more color to what Sardana Ji said regarding, regarding the quarter. Just a quick high-level input that we clocked 99.77 in our operational performance, which added an incentive income of around INR 26 crore this year. It's a, it's a great news that not only we are growing, we are maintaining our assets, not only for the period, but a horizon of almost, keeping a horizon of almost 50 years, and nothing short. In terms of circuit position, we added 550 kilometers, circuit kilometers during the quarter and reached a mark of 19,778 circuit kilometers. I think if you actually look at one of the things which is important to bring up is that we are continuing to grow faster than the market. I think our internal estimate is that in the first quarter, the overall market grew by 1%, and we grew by 4% in quarter one as well. I think this is one thing which we keep on monitoring, and that is something to do with a little bit of art. The current situation is that we have a healthy pipeline, and in the upcoming quarters, we would be commissioning some five important lines, including KVTL, which is Kharghar Vikhroli, WKTL, and MP2 package and Khavda and Karur, which will add around another 3,000 kilometers. It's, you know, the, the, the business looks absolutely robust. Now, to answer your question, I think, these are very interesting times, for the sector itself. You know, on, on one side, we have the reforms kicking in and a lot of excitement in distribution, including smart meters. There is a consumption kicker, which is taking place, as well as, as our economy grows, and also an interesting global story of energy substitution as well. Now, linking both these two is transmission. If, if you look at the 2030 requirement, we would be probably be evacuating 500 gigawatts of only green power as well. I think I'm talking about the, the, the paper which came out in November last year itself. In short term, we are looking at a bidding pipeline of INR 45,000 crore this year. Maybe in 18 months time, we would be beeping into INR 70,000-75,000 crore of only, the central bidding, which will take place as well. I think there are various estimations going around, let's say, 2030 horizon. Anywhere between, INR 2 Lakhs-INR 3000 crore, only at the central level, would be needed to be invested in transmission. I'm not talking about the state level estimation, which would be needed to strengthen the grid. All in all, very, very busy schedule, from all quarters within the sector as well, as well, and we are fairly excited about it. Hope this answers your question. Thank you. Yeah, yeah. One of the things that I wanted to understand is, you know, incrementally we are adding more RE. Does that, you know, as a investment per megawatt or gigawatt, whatever it could be for the transmission guy, because, you know, because of the fact that PLFs are low in REs, does that increases the opportunity for transmission, which we are not seeing? This 2.4 that you talked about, you know, has been type of in the by the central agencies. Do you think that it's an under, you know, slightly understated because of the fact that, you know, the amount of capacity that will add per gigawatt per is slightly, you know, should be slightly more? Yes. Thank you. You know, it is not that straight that you could calculate the impact, because from the RE demand, you actually get into a pooling station. Typically, at the pooling station, you are able to utilize the capacities in such a way that the trunk routes are able to get the power supply from either RE or from other sources. With the result, the utilization of assets is from the pool station onwards, which is what costs more, is much better. Eventually, the way the planners are working is that at the key pooling stations, they are trying to interject different formats of power and not just restricted to RE. Yes, from the RE station to the pooling station, in any case, the lines have to be built by... Under the new concept, has to be built by the RE developers themselves, and therefore, they will have to make that as a part of the delivered electrons to the pooling station. The transmission line under GNA, the new concept that the government has evolved, the transmission lines are going to get added because GNA means that any consumer can have the access and a choice to source electrons from anywhere they want, and that is the promissory note. Therefore, a lot more lines will have to be added into the system. We are still quite some time away from those times. At the current stage, it will suffice to say, yes, the transmission line costs could get bit impacted, but not to the extent that the concept will suggest that the RE is going to keep the transmission line abeyance for 50%-60% of the time. No, that, that, that is not the way the transmission system is designed. Thank you. Yeah, just last one from me. We have been hearing some issues around the supply side, transformers, et cetera, because there hasn't been much capacity, manufacturing capacity on the transformers side, and there is a, you know, good amount of lines, et cetera, to be added. If you can comment something on that? Well, in any growing economy, there will be times when there could be gap between demand and the planning to get those supplies into the system. Yes, you will, in a pro tem basis, and particularly because there are various, you know, kind of embargoes on import from outside due to Make in India programs, et cetera. So you would see some phases in between when you will have pressure on, on the fact that the demands are not forthcoming, or are not available at a competitive price. That's, that's, that's always a welcome situation for the simple reason that eventually, if the, if those who are making in the country today, will be able-- will, will get confidence and trust that their products will have offtake, and therefore, they will expand capacities, that's the most welcome situation that one is looking forward to. I guess it's only a temporary phase. We have seen such phases come in the past also, but they soon get corrected. That's a good part. We will see more capacities getting added in India. Thanks. Thank you. A reminder to the participants, anyone wishing to ask a question, please press star and one. The next question is on the line of Shabab Thadani from Arqaam Capital. Please go ahead. Yeah. Hi, good afternoon. Just one quick question on the dividend from the electricity business. What was the quantum of that? Is that intended to get paid annually, just based on the excess available with the distribution account? The dividend amount was INR 245 crore. That is to ATS. Total is INR 350 crore. You are asking total or to ATS? 350 was the total of which you get 74%. Is that right? That's correct. That's correct. Okay. 74.9%, 35.1% is of QIA. Yeah. The intention is to keep paying out excess available amounts from the distribution account on an annual basis, or will it be more frequently than that? All right. One can always assume that the intention will be to have dividends from our subsidiaries regularly. Okay, got it. Understood. Thank you. Thank you. The next question is on the line of Nikhil from Bernstein. Please go ahead. Hi. Thank you for taking my question. My first question is on regulated returns, which have been in delay for some time, since the RPO has come. Just wanted to hear the views, if any further update from you as the management has on that. Hi, Nikhil. CERC has come out with a concept position for tariff for next control period. There they have suggested a various options as far as return on capital and return on equity is concerned. Nikhil, you would appreciate that this debate continues to happen, even if you see last two control three years, tariff regulation, the same was the approach. Eventually, as long as investment is required into our sector, they would not the like to tweak much about rate of return on the investment. Got it. Understood. My second question is on new opportunities in distribution. Apologies if I missed it earlier. There are some places where I understand Adani Energy Solutions is looking to approach a parallel licensing model. Just wanted to understand if any new opportunities are coming as franchisee or a licensee model in this area? Nikhil, you might be aware that, and as Mr. Sardana mentioned in the opening remarks, we have already applied for each three geographies. One in Navi Mumbai, which is adjacent to our existing license area in Mumbai. The second is Mundra Taluka, which is adjacent to our existing license at Mundra. Third, we have applied for Gautam Buddha Nagar district, along with the Ghaziabad Municipal Corporation. All the three applications are at various stage of approval. This is the update as far as second license is concerned. We have also evaluated many other areas in the country, but we would take a step one by one. We would first like to get the license and start operation here in this license area. Meanwhile, we will, we will think of expanding into other areas as well. As far as opportunities in distribution is concerned, currently, there is nothing on the horizon as far as privatization is concerned. Government of India and MoP wanted to privatize few union territories. We have done bidding for the Dadra and Nagar Haveli, and that has been handed over to Torrent. Subsequently, the Pondicherry has not progressed further. Therefore, we are, we are relying more on a second license route rather than a privatization route. Understood. Got it. My last question then is on the funding part. If there has been any update on that side, either on the QIP or any plans to issue dollar bond, et cetera, would be great if you can share that. QIP is still work in progress, so we are still working on the document kind of thing, so we will update once we have clarity from the investment community. On the fundraising, I think, we had closures of major of project CapEx, which we had done last year, the construction facility worth $1.1 billion, against that we are drawing. The new projects which we have won in the last five to six months, they are under various stages of closure. I would say mostly all would be done at the SPV level. We are not looking at any major raises on the debt side at the parent level. Great, thank you so much. Thank you. A reminder to the participants, anyone wishing to ask a question, can you please press star and one? There are no further questions right now on the conference. Over to Mr. Anil Sardana for his closing comments. Thank you so much for, for your participation, and appreciate your joining us for the Q1 Call. Have a safe time, and we look forward to seeing you for Q2 FY 2024 Call. Take care. Thank you so much. Thank you, members of the management team. Ladies and gentlemen, on behalf of Emkay Global Financial Services, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.