Ladies and gentlemen, good day, and welcome to the Adani Energy Solutions Limited Q3 FY24 Earnings Call. 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, then zero on your touch-tone phone. Please note that this conference is being recorded. From the management we have with us, Mr. Anil Sardana, Managing Director; Mr. Kandarp Patel, Chief Executive Officer; Mr. Rohit Soni, Chief Financial Officer; Mr. Kunjal Mehta, Chief Financial Officer, AEML; and Mr. Vijil Jain, Head, Investor Relations. I now hand the conference over to Mr. Anil Sardana. Thank you, and over to you, sir. Thank you, and, good afternoon to all the analyst friends. Welcome to Q3 analyst call. You would have got the fresh details and the other details as submitted to the stock exchange. And let me continue from the fact that, like every quarter, the company achieved good progress during the quarter with commissioning of additional transmission lines. And by virtue of that, it continued to get and register robust growth. That's visible in the way that the cash profit registered during the quarter is about INR 786 crore. The revenue is up by virtue of the fact that one could register additional assets, and so did the direct costs, by virtue of which the EBITDA numbers have shown a growth of 10% year-on-year. I must quickly add that in each of these assets, one has seen the COVID times, and therefore, the change in law with regard, with regard to the COVID months, which is eight months as permitted by Government of India, through official circulars. And the balance period, as was relevant in different states, has not been accounted for in respect of the added IDC or change in law. These are all subjects for which petitions will be bundled as we now move into the other quarters, and therefore, one would see the advent of those additional approvals as they will come by from time to time from respective regulators. Now, amongst these formidable parts was the Kharghar-Vikhroli line. A matter of great pride that for the first time, Mumbai is seeing 400 kV grid getting energized by Adani Energy Solutions. This, by no means, was an easy line to execute because it is from those denser areas, has also challenges of height restriction, besides the fact that all the other lines, as you must be aware, by some of the other transmission players, are still languishing for quite some time. But we could achieve this, and the line is very much now energized. The next one was the first line from Khavda. This is the 765 kV double circuit line, all the way connecting to Bhuj area. The fascinating part is that it is today carrying electrons from the first solar fields that have started to get energized. Now, naturally, for us, the schedule for this was somewhere end of January 2024, but we could commission it ahead of schedule, and we have been able to carry the electrons for the generators. In addition to that, some of the other orders that the company get captured in terms of smart metering continue to take us to robust positions with regard to how we are positioning ourselves in an area which eventually dovetails well with our aspirations of private distribution or the second license or the parallel distribution networks as we would want to eventually get into. So those are some of the highlights, and to that extent, the details are there with you. It'll be nice to get your questions, and by virtue of that, I'm sure we will tend to answer and provide you more details. So instead of going further, I would stop here and request that we can have the questions from your end, and we will use that opportunity to deliberate more on some of the aspects that I may not have covered. Thank you. Thank you. Ladies and gentlemen, 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 withdraw 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. The first question is from the line of Koundinya Nimmagadda from Jefferies. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, my first question is on the under construction pipeline for Adani Energy. So what is the current asset base that you have, which is expected to be commissioned in the next three, four years? If you can provide some color on the target pipe and the target commissioning for FY 2024, 2025, and 2026, please. Yes, so the current pipeline, which is under execution, is about INR 17,000 crore. We plan to complete this project. These are about eight projects covering eight projects, and we would complete this by all the projects by December 2025. Mm-hmm. And how much of that would be commissioned in FY 2024 and FY 2025, sir, of the INR 170 billion? There are two projects which will be completed in the next three to six months. The MP-II, which is partially commissioned, and KVTL, which has been connected, would be declared fully commissioned. So these two projects will be completed in next one and two quarters. Understood, sir. And, sir, on the smart metering side, that's my second question: So, what is the, how does the current bid pipeline look like? And, and you also, in your presentation, spoke about INR 137 million of total opportunity size. So what extent of that is covered in the bid pipeline, and what is it that is yet to be tapped? If you can throw some color on that, please. So currently, the order in hand is about 2.1 crore meters, which is roughly CapEx of about INR 17,000-INR 18,000 crore. And this we will complete in next 24-month time. So in next two financial year, the current pipeline will get concluded. We also expect to get, there is a bidding process that is going on in various stage, and we expect that the similar number of amount of orders will get added into the current one. And that we will have to also conclude in going forward in 24 months from the date when we get that order. Understood, sir. So essentially... okay, understood. And, sir, lastly, of the INR 1.1 trillion transmission bid pipeline, which you spoke of in the presentation, what extent of that is in tendering stage, and what is it that is still under discussion stage? If you can provide some color, please. The bidding pipeline for transmission projects is expected to be about INR 110,000 crore CapEx, and that we expect this bidding to happen in next six to seven month time. Sir, yeah, okay. This is all in the bidding stage itself. And what extent of the... I mean, incrementally, what is it that's been approved by NCT and yet to enter bidding stage, sir? Already, everything has been approved by NCT and already notified for bidding, where after approval, NCT, MOP issues a notification for bidding. The notification has already been issued for INR 81,000 crore project, for which bidding is likely to get complete by April or May this year. Got it, sir. Thank you very much. I'll come back in the queue for more questions. Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Mohit, the line for you has been unmuted. You may proceed with your question. As there's no response from the current participant, we will move to the next participant, which is the question from the line of Abhiram Iyer from Deutsche Bank. Please go ahead. Hi. Thank you for taking my questions. My first question was with respect to could you just let us know what's the current debt and cash positions at, you know, Adani Energy Solutions consolidated and at Adani Electricity Mumbai? Abhiram, you want specific for AEML, am I right? If you can give both consolidated and AEML, that will be useful. Okay. So, we'll give the AEML first. Yeah. So AEML, basically, as you would know, did a buyback of $120 million of bond during the last quarter. With that, the total debt, which is outstanding, is 1,180 odd million, which is the senior debt, which is outstanding. And it had a cash of roughly around 1,000 odd crore, 1,200 odd crore in its books. So roughly around 7,000 odd crore of net debt, AEML had in its books as on 31st December. Got it. This includes all working capital, right? 7,000 eight- Working capital about INR 650-odd crore. So add to it the working capital debt also. Okay, INR 650 crore is working capital. Okay. So that in total, INR 7,600 net debt of AEML. Got it. And, you asked, Abhiram, on the second part of that, I think at a AESL consolidated level. So we are sitting at a debt gross rate of close to around INR 30,000 crore as on quarter three end. And if you talk cash, we're looking at close to around INR 5,000 crore of cash in the business in various assets and everything. So if you're looking at net debt, it's close to around INR 25,000 crore because of the bond buyback, INR 1,000 crore quarter. And we have not considered the sub-debt and working capital in it. Perfect. Thank you. The other question that I had was on the reversal of the tariff build-up, basically, AEML's regulatory balance account. From what I can see, it's been declining. We saw a big reversal in Q1, but then Q2 and Q3 have been smaller and smaller, so that overall, till now, it's been around INR 500 crore out of the nearly INR 2,000 crore of balance that was built up by the end of FY 2024. So, if you recall our previous conversations, you had mentioned that it might take two years, around two years to bring this balance down. Are we now expecting this to go longer, or is this a temporary sort of slowdown, which is expected to correct again back from, you know, Q4 or even FY 25 onwards? No, no. So there is no question of slowdown or reduction of this thing. What the regulator has said is that around 1,700, 1,500 odd crores would be recovered over a 24-month period, of which we have already recovered INR 500 odd crores by December 31. The balance, 1,000 odd crores, will come between Q4. That will take care around INR 700 odd crores will be recovered by March 31, and the balance INR 800 crores will be recovered during April 2024 to 2025. So INR 500 odd crores has been recovered, which is in line with the regulatory order. So there is no slowdown as far as the recovery of the regulated or the past recovery on the asset is concerned. Understood. Understood. Yeah, I mean, just to, Abhiram, just to add- Yeah. Just to add to what Vijil said, we recover this regulatory gap through tariff that we charge to our customers. You must have seen the increase in sales that AEML has been able to achieve. As we go forward, because of increased sales, the recovery will also increase accordingly. Understood. Understood. Perfect. That makes sense. Thank you very much. Thank you. We have the next question from Kishore from Axis Capital. Please go ahead. Thank you for taking my question. My first question is, could you share some color around the fiscal year to date, TBCB projects, projects that have been awarded by value? And, you know, what is the bid discipline that you are seeing by Power Grid and other major players, including, you know, yourself? And do you see IRRs for projects won so far this year, have they improved versus last fiscal? So that's my first question. Sorry, can you repeat your question? The line was bit unclear. Can you repeat it, please? Sorry. I asked whether fiscal year to date, if you could speak about TBCB project by value, what has been awarded so far this fiscal? And what is the bid discipline that you're seeing, you know, in this pick-up in TBCB project awards? And do you see IRRs for project wins that have happened so far this fiscal, whether they have improved versus last year? So basically, I wanted an overview on the competitive dynamics in the space, and some color on the projects that have been awarded so far this year. Yeah. So, Kishore, INR 61,000 odd crore bid has been done in last one year. And then, we saw intense competition. The reason probably was that prior to this last one year, the bidding that happened in previous years, the quantum was relatively smaller. But as we go forward, the kind of projects that are coming up for bidding, as we discussed about INR 110,000 crore bid that is going to happen in next six, seven month time. So we expect that, the expectation or the competition will not be that intense, because every player has a significant work already in their kitty. Another important thing that you should note here is that now the project which is coming under bidding are quite a big-sized project. Also, bidding is going to happen very quickly, almost simultaneously for most of the projects. Therefore, we expect that there will not be a pressure on IRR for the projects that we bid. Okay. So out of the INR 61,000 crore projects which have been awarded, right, in the last one year, how much has Adani Transmission won? Adani Energy Solutions, I mean. Out of 61,000, we have won about 10,000. Okay. In your assessment, Power Grid would be more than INR 25,000 crore? The Power Grid is around the 55% share of this 61,000. Okay. But that 61,000 would include that Leh-Ladakh, which was given on nomination basis or that is outside? There's no That is, that is outside. That is outside. Okay. Okay. So, given the intense, you know, so Power Grid is competing quite aggressively. Do you get a sense that, you know, Power Grid is ready to take a bit of compromise on IRRs at this point? Because their works in hand had been going slower earlier, when the number of opportunities available were lower. So are you getting a sense that Power Grid is competing quite aggressively? So, Kishore, I can't comment what probably Power Grid would do, but the kind of advantage that we have is that since we are into transmission, distribution, as well as smart metering, we have ability to fund the investment in the sector, which is giving us a good IRR. And looking at current market situation, we don't see any reason why any player, including Power Grid, will become super aggressive in getting the project. Got it. My second question is in relation to your smart meter, you know, CapEx plans, which are quite intense. So, what can you share some color on your smart meter procurement for the CapEx that you have lined up? Have you made any tie-ups or partnered with any prominent players, to procure your smart meter requirement? So, Kishore, in smart metering, there are essentially three, in fact, four important segment of a CapEx that you do. One is obviously a meter. The second one is the communication. The third one is those software, which is ADS and FBN. And the fourth one is your cloud services. Mm-hmm. Now, you must have noted from our various communication that we have a strategic alliance or tie-up or a JV for communication software as well as cloud services. Now, as far as meter supply is concerned, the total capacity of meter manufacturing India is in excess of INR 12 crore per annum. Now, even after this kind of spurt in demand, we feel that there is a sufficient meter manufacturing capacity, and we are essentially having a kind of understanding or a agreement with the tier one meter manufacturer. So the mainly those, those are Schneider, Genus, and HPL, where we are sourcing meter from them. And the rate that we have been able to get at are very, very competitive looking to the market conditions. Okay. That's very good to know. Thank you so much for answering my questions. Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Good afternoon, sir. My first question is on what is the timeline for the smart metering rollout? Is it fair to say that entire 21,000 or 2.1 crore smart meter will get installed over the next three to four years? Is that a fair understanding? And the related question is: How do you intend to fund this outlay? Is it you'll fund all the projects SPV via SPV, depending on the discount? So, Mohit, contractually, we have to implement the entire metering solution within 27 months from the date of the agreement. Now, but internal plan of course is to implement within 24 months, and we have lined up our entire implementation plan, including procurement and sourcing in a such a way that we are in a position to achieve that kind of a timeline. My question is, are the DISCOM ready? And how are they- So, yes, the important thing to make sure that we implement this at a very good pace is to involve and educate DISCOM right from the beginning. So that is the kind of practice that we have been doing, that the moment we get that concession, we actively start interacting with the DISCOM and also let them know as to on which part they will have to take a decision. Because it is essentially integration of two systems. Eventually, I will have to integrate my entire solution in that billing system. There I require a support from their side, and it is important that DISCOM is geared up, and we are making sure that they are given all the input to take the right decision. Okay. How do you get to fund the outlays, sir? Sure. So, the most important part on smart metering thing is that the revenue to CapEx cycle is significantly lower. So what I mean is that we do not have to wait for the entire 27 months or 30 months to get completed to fund the entire project for 27 months and then the revenue starts accruing. The way it is that once a customer size of smart meters, say, 5% of the smart meters have been installed, we start earning revenues also into it. So the funding becomes a self-funded asset or self-funded to that extent. And then, with a smaller debt tie-up, I can fund the entire 21 million smart meters, which we have planned currently. So here we are not talking of to first lay, raise debt of say 70%-75%, and then do 30% of equity. That is not what I will do. Essentially, what we are just looking at 30% equity, say 30%-35% of self-funded asset, and say 20%-25% of the debt to be tied up, and then we will be able to do it on a self-funded asset. So that is how we are looking at financing this entire smart metering financing. Understood. My second question is on the bidding pipeline. So there is a strong bidding pipeline, and I think we were not bidding actively in most of these. Can we expect us to be more active compared to our recent past experience? And the other question is, given the huge pipeline, are you seeing the constraint emerging in power equipment space, the fact there is no transformer available, reactor not available, HVDC people, HVDC industries are full with orders? Please comment on that. Yeah. Yeah. So, Mohit, You will see us active in the bidding, but not because that, but not at the cost of compromised ROE. We believe that we will be able to get a good amount of share without compromising IRR. As far as your second question is concerned, yes, obviously, there is a constraint looking to the kind of CapEx that is expected in the country. But the good thing that we have already done is that we have strategic ties with a major equipment supplier, and we work closely with them not only in our transmission business, but also other businesses where we buy a lot of equipment, electrical equipment. We are fairly in a better place as compared to other years, in terms of relationships with the suppliers. My last question is, what are the CapEx in nine months, FY 2024, and across the businesses? So, Mohit, I mean, if you take the CapEx spend, what we have, mean more or less in the guidance, what we have said. So if we take for the nine months, we have spent close to around, INR 3,500 crores on the CapEx side, which is the guidance of, INR 5,000-INR 6,000 crores of the CapEx, what we do on a yearly basis. So we are on track for that. Understood, sir. Thank you. Understood. Thank you. Thank you. The next question is from the line of Abhiram Iyer from Deutsche Bank. Please go ahead. Hi. Thank you for taking the follow-up. Could you let me know what's the status of the equity raise that was approved last year? I mean, the last time we discussed it, you mentioned waiting for an opportune time, and I agree that internal actuaries are enough for new projects, but is this still on track or has this been shelved for the moment? Abhiram, I think last time, when we had done the resolution, we had done it as an enabling clause to support the growth of AESL. So, the usual discussions are still going on. I wouldn't say it has been put on the shelf, but the current CapEx pipeline and the bid pipeline, what we have, that is equally supported by the cash flows, what we have from the business. Equity raise and discussions are still ongoing. We don't have anything concrete to tell, "Yes, this has been concluded," but discussions are going on at a larger level. Understood. So no specific timeline. It's still the company deciding on when it is best to, for them to do it. Correct. So we just working on what is the timing, what would be the value side. So all those discussions are going. Thank you. ... Thank you. Ladies and gentlemen, if you wish to ask a question, you may please press star and one. The next question is from the line of Dhruv Muchhal from HDFC Asset Management. Please go ahead. Yes, sir. Thank you so much. Sir, in your earlier calls, you had mentioned that the CapEx target for the transmission business is about INR 4,000-INR 4,500 crore. So do you stick to the guidance or do you see any upward revision to it? For the next year, I think. Yeah. I think, Dhruv, the guidance what we gave is basis the construction activity which is undergoing. So we stick to the guidance. So those numbers still hold good what we said. Our nine-month data also talked about the same thing, and the 12-month data would also speak to the same numbers. What we see is the bidding pipeline is getting bigger, and basis that, what would be our plan to get to the more CapEx what needs to be done, that is the area where we are working. But for the next one to two years, the CapEx numbers what we have said would hold to the numbers. Okay. Sure, sir. And one, bookkeeping kind of question, is, on your slide 46, you know, you have given the Kharghar-Vikhroli asset base. It's about INR 13 billion. And if I look at the same number, in the previous quarter's presentation, it was about INR 18 billion-INR 19 billion. So just wondering, is the change because the asset is got constructed and now you have the actual number, or and the earlier number was an estimate? So I would say, the numbers are still provisional, but we might see a certain CapEx reduction on the Kharghar-Vikhroli. So it just got commissioned, five to 10 days before the quarter closed. So the final numbers will be true once we're done, say, three to six months, where the claims and the counterclaims and the tensions will be closed. So we'll true up the number as we come closer to it. So we say it, it will be in that range. All right, so the 13 is currently provisional. I should not- Correct. It is correct. Got it. Okay, sir. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Megha from Stone Harbor. Please go ahead. Hi, thanks for taking my question. My question was on the international rating. So, S&P has changed the outlook from negative to stable. Could you throw some light on your discussions with Moody's? And, you know, is there any sense on, you know, what action are they taking on the ratings? What has been the progress in terms of your dialogue with Moody's then? The company continues to engage with all its stakeholders, including the rating agencies. With respect to the continuous engagements and with respect to all the positive outcomes which we are, which we are seeing, S&P has now restored back the rating outlook, which it had done, last year. We continue to engage with Moody's and the other agencies, and at the right time, I think, all the agencies would also upgrade their ratings. Thank you. Thank you. Participants, if you wish to ask questions, you may please press star and one. To ask a question, ladies and gentlemen, will you please press star and one. We have the next question from the line of Nikhil from Bernstein. Please go ahead. Hi. Thank you for the opportunity. I just had one question on the distribution business side. Any opportunities ongoing or in the pipeline, that you could update us on would be helpful. You must have noted from the presentation and the other material that we shared, we have already applied for second license in respect of three geographies. One for Mundra Taluka, which is adjacent to our existing distribution company in Mundra SEZ. That is about 1,000 sq km. The other one is Navi Mumbai, where we have applied for second license. That is also about 1,000 sq km-1,100 sq km. And the third one that we have applied is in Uttar Pradesh, where we have applied for Ghaziabad Local Corporation, along with that, a district of Jewar, where new airport and other development is happening. So these are the three areas where we have applied for a license. In Mundra, the Gujarat Electricity Regulatory Commission has in principle approved. Now, the next step will have they will have to issue a public notice and conduct a public hearing. We expect that public hearing to get notified shortly. Once that is done, they will issue us a license. In MERC and UPRC, the process is bit slow, but we expect that once Gujarat order is out, probably, that will also pick up a pace. All right. Understood. Thank you. One follow-up question on that. In these areas, as a second licensee, the company would be building the parallel infrastructure completely and not using the existing setup. Am I correct to understand that, especially in places like Navi Mumbai, et cetera? Your understanding is correct. In fact, that's a legal obligation as per the current statute. Got it. Understood. Thank you. Those, those are my questions. Thank you. We have no further questions, ladies and gentlemen. I would now like to hand the conference over to Mr. Rohit Soni for closing comments. Over to you, sir. Yeah, good evening to all of you. I think, very thankful to all of you for joining this call and hearing us out for 45 minutes. So it's been a very good quarter from the business side. We'll keep updating you as the business progresses. It's a big pipeline which is coming up on all the sections sections in which we operate: transmission, distribution, smart meters, and the smart cooling solution. We thank you for your support, and wishing you a very happy new year as the year has started. Thanks a lot. Thank you. On behalf of Adani Energy Solutions Limited, that concludes this conference call. Thank you all for joining us. You may now disconnect your lines.