Ladies and gentlemen, good day and welcome to the Premier Energies Limited Q2 FY27 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir. Thank you, Arik. Good morning. On behalf of ICICI Securities. I welcome you all. to Premier Energies Q2 FY27 earnings conference call. Today we have with us from the management Mr. Chiranjeev Singh Saluja, Managing Director. Mr. Nand Kishore Khandelwal, Chief Financial Officer. Mr. Vinay Rustagi, Chief Business Officer, and Mr. Sudhir Moola, Chief Strategy Officer. Now I would like to hand over the floor to the management. for the opening remarks, post which we'll open the floor for Q&A. Thank you, and over to you, sir. Thank you, Mohit. Am I audible? Yes, sir, you are. Please go ahead. Yeah, okay. So yeah, so good morning everyone. Thank you for joining us today for our Q2 earnings call. I am Chiranjeev Saluja, Managing Director at Premier Energies, and I'm joined today by my colleagues, Mr. N.K. Khandelwal, Group CFO, Sudhir Reddy, Director, and Vinay Rustagi, Chief Business Officer. The company has reported another sterling quarter with total revenue increasing by 38.2% YOY to ₹ 2,656 crores on a consolidated basis. EBITDA and PAT have grown by 17.8% and 30.8% YOY to ₹760 crores and ₹462 ₹462 crores respectively. EBITDA and PAT margins in the solar manufacturing business came in at 29.3% and 17.9% respectively. The PAT margin has moderated slightly because of increase in depreciation and reduction in other income. Transcon, our subsidiary, has reported another good quarter with revenue and PAT of ₹122 crores and ₹18 crores respectively. EBITDA and PAT margins came in at 15% and 8%. Amongst key business updates, our 7 gigawatt Topcon cell line has been commissioned. Trial runs are currently underway and commercial production is expected to start later this month. Our operational cell plants delivered a record capacity utilization in the quarter, showcasing our all-round operational excellence. A highlight of the quarter was new order wins totaling ₹4,001 crores for cells and modules in a highly competitive market taking our total order book to ₹16,260 crores. The transformer business also saw a healthy intake reflecting higher capacities, taking the total order book in the transformer company to ₹330 crores. I'm happy to update that all our expansion initiatives, including battery energy storage, are on track. Solar capacity addition has been steady throughout this year, with growth in PM Surya Ghar Yojana compensating for slight weakness in the utility-scale segment. We expect project commissioning progress to accelerate over the next 6 months, taking the annual capacity addition to around 50 gigawatt AC territory, surpassing last year's numbers. More importantly, the long-term outlook for the sector remains compelling, with the government looking to reduce dependence on fossil fuel imports and fighting climate change. Recent policy announcements on bolstering transmission and storage capacity additions are expected to unlock the next cycle of growth for the solar sector. Commodity price inflation in wake of, in wake of the Middle East war has hit the solar sector with material increases in prices of key raw materials and delay in delivery timelines. However, I'm pleased to say that we are navigating this period successfully with careful supply chain management and investments in scale and technology. As new capacity ramps up over the next few quarters, we expect a major step up in financial performance of the company. At the same time, we are also evaluating several new primary and secondary growth opportunities. Our balance sheet strength, as reflected in low cost of capital and an A+ credit rating, is a key pillar of our business competitiveness. We remain focused on disciplined growth, leveraging our key operational strength alongside prudent risk allocation. Thank you. We are now open for questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 comes from the line of Shubham Borade with ICICI Securities. Please go ahead. Yeah, hi, thank you for the opportunity and congratulations on a good set of numbers. So I have 2 questions, uh, first being, uh, where are we in battery manufacturing and what we will be able to localize in the near term to achieve the 40% DCR requirement? And second would be, what is the status of our approval of new 7 gigawatt capacity from MNRE and have it stabilized. Uh, sorry, Shubham, we can't hear you. Can you please repeat the second question again? Yeah, the first question was clear. Just repeat the second question. Yeah, sure. What is the status of our approval of new 7 gigawatt capacity from MNRE, and has it stabilized? I hope I was already suppression systems inside it to achieve the 40% localization that is being asked by the government for the various subsidy programs. And also on the, uh, on the software part also, we have tied up for providing Indian-made EMS for the battery energy storage systems. So that's our plan on the battery energy storage. I hope that's clear. Sure. Okay, I'll let Sudhir already answer the first question on our battery manufacturing plans and localization plans, and the second question I will take it after him. Thank you. Uh, on the, on the battery energy storage system, uh, we expect to operationalize the battery energy storage system in Q2 2027. Um, and with respect to localization, we are working out on localizing the container manufacturing. We are trying to localize some of the fire, uh, Yeah, so our plan is to do cell-to-pack and pack-to-container. Uh, this is what the manufacturing plant— what we are setting up. On your second question on 7 gigawatt, uh, cell line at Naidu Pedda. We have already made our application to the National Institute of Solar Energy for the inspection of our plant and to get it enrolled in the ELCM. We are expecting the inspection to happen anytime in the 3rd week of November, and the plant is, as we already said, is already commissioned and trial runs are going on. I hope that answers your question. Yes, sir. Yes, thank you. And just if I can squeeze in one more, what is status of wafer and ingot manufacturing and have you placed the orders for equipment and what would be a total cost for the project? Thanks. Yeah, Sudhir will answer this question. Yeah, um, we have started working on the ingot wafer plant. Uh, in fact, it's— the land has been already procured quite some time back. And, uh, also the license and permitting, uh, for that, uh, place which is in Naidu Peta, very clear, very next to our 7 gigawatt plant, have been in position for that plant. Water allocation has been done, electricity power approval also has been done, and we have laid the power lines to the plant in 169 acres. Uh, we hope to commission the Phase 1 by December 2027, and Phase 2, which is additional 5 gigawatts, uh, taking the total capacity about 10 gigawatts. by, uh, June 2028, which is to more align with the ALMM 3, and we'll look for guidance from government on that. There is any timing changes. Uh, sure, sure, sure. Thank you, thank you. That was beautiful. Thank you. The next question comes from the line of Apoorva Bahadur with IIFL Capital. Please go ahead. Hi sir, thank you for the opportunity. Uh, sir, on, on this, uh, battery manufacturing, I just wanted to, uh, double-click a little bit more, especially on our partnership with RCT. Uh, so it would be very helpful if you can, uh, explain like what, what would RCT bring to the table? Do we— does the JV have access to its proprietary tech from Watsila? So we will take this question. Yeah, uh, I mean, just to give a background, right, uh, RCT is a German company and, uh, they have been in the battery energy storage business, uh, quite, quite some time, and they have placed a lot of their, uh, battery energy storage solutions both in Europe and in, in US as well. So they have both CE and UL certified products. Uh, in their thing. But that said, our partnership with RCT is going to give us this reach for us into those markets, uh, with the battery energy storage solutions. going to be manufactured in India. Uh, it also gives us, uh, access to some of their EMS solutions, uh, that they already have and have been using it for their European and US customers as well. So it gives us both the product access to the product portfolio as well as their customer base, uh, that they're currently serving in these 2 markets. We hope to replicate some of their learnings, uh, from their already established, uh, uh, products in the market, uh, into the Indian market. Okay, uh, and, and also, uh, so the LFP cell imports for these plants, have we tied up for those? Which vendor and which geography from? Who from China basically? Yeah, so Apoorva, we have not— we have been working with the, you know, tier 1 manufacturers of cell in China. We have not have a firm tie-up as on date. But as the plan progresses, we will enter into a firm supply arrangement. All right, sir, understood, sir. Very helpful. Uh, so secondly, uh, also wanted to know your thoughts on, on the inventory buildup, uh, and, and sort of the depletion in cash conversion that, that we are seeing in, uh, over the last couple of months, uh, how, how does it resolve? I understand that because we are building new capacity, so we would be needing some of the materials, but I think there's a buildup in finished good inventory as well. So would love to know your thoughts on this. Yeah, uh, hi Apoorva, this is Vinay here. So actually the buildup is largely on the raw material side. Uh, there is no major change in the finished goods inventory. Uh, but the buildup is mainly because of 2 reasons. You know, one, of course, uh, you know, there is a ramp-up happening in Sitarampur, and now with Nairoopetta plant also getting commissioned. There is expected to be a big scale-up in operations of the company, both on the cell and the module side. We have to, uh, in advance of this ramp-up, we have to have all the inventory position and the, and the stocks kept up with the company. So when you look at the inventory position and compare it with the historic revenue performance, the number seems artificially higher. The second thing which has happened in the quarter is that, you know, particularly with the war situation, some of the delivery timelines have been impacted. Shipping lines. There is some congestion in some of the ports. So we have basically also been maintaining some extra buffer on the raw material inventory, which has led to this slightly inflated position. But I would say this is temporary in nature. As these new plants stabilize, revenue starts coming into the numbers. You will see the numbers fall back to the normal scenario. So we should expect this by March quarter or Do you expect a little bit later? I would say latest by March quarter, yes. Okay, okay. And lastly, sir, if you can also share the, the latest DCR ALMM2 price trends. Now I believe that the C&I demand is also around the corner. Yeah, I can take this question. So, uh, in the DCR segment, we have got, you know, 3 markets which we address. One is the retail market where we have the, uh, you know, the highest selling point. Um, there the price prevailing in the market is anywhere between ₹23 to ₹24 per watt on a DCR module. And then the next segment is the Kusum C, um, and the C&I market that we expect realizations to be around 21.5, um, at the bottom maybe 21. And then you have the IPP segment, which is coming in, which is a large IPP, there we see prices going to, um, as low as about ₹20.5 or even ₹20 if you're talking about up to March '27. Now when you average out all these prices, you get an average of around close to ₹21.5 to ₹22 on the DCR module. When you talk of cells, uh, you know, it's ranging between 12 to 14 cents, which is Monopack around 12, 12.5 cents, and Topcon at about 14, 14.5 cents. सराम पे कॉल है। And if you talk of non-DCR module, we are seeing a lot of aggressive pricing there. But as a company, uh, you know, with our high-quality BOM and highly automated manufacturing lines, um, we are able to get a price premium there. So there we are looking at prices anywhere between ₹12.75 to ₹13. Thank you, sir. Uh, just, just one more thing on this. I think on the DCR price you said up till March 27th. Uh, so for these, for these larger projects, maybe for C&I and IPP, uh, the delivery timelines could be further beyond that. So is there a difference in pricing? Say for year-end CY27? Yeah, so for the pricing for IPP, which I, which I stated, is all for next year because the IPP would not want modules immediately. Their planning is well in advance, so there we are looking at you know, around ₹20 for IPP and not C&I. But, but then there is a mix. You have retail, you have QSMC, and you have— so when you average out, you know, we are getting a better realization. And the demand at the retail level is quite strong. Understood. Thanks a lot. All the best. The next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead. Good morning. Thanks for the opportunity. My first question is, it's still early days on China's proposed technology export controls, but do you see this or how do you comment on the perceived risk of delay or deferment in implementation of ALCM for C&I and ALMM III later by June 2028? So, I'm wanting to submit— I'll ask Sudhir to take this question. Uh, sorry, Vinay is taking it. Let me just, uh, step in. Yeah, hi, hi, uh, Sumit. Uh, so I think, uh, on the China policy front, uh, you know, this is obviously, uh, a draft announcement right now. It is going through a consultation process and we will know the final outcome, I would say, in the next, uh, 2 to 4 weeks. So we kind of should reserve uh, you know, in terms of comments on, you know, what is going to really happen there. Uh, obviously we are anticipating some kind of controls and we are kind of working with our technology and vendor partners as to finding the best way around some of these restrictions. Bear in mind also that if you look at the Chinese machinery suppliers, For them, you know, the domestic business is almost completely shut down given that China is now trying to reduce capacity instead of increasing capacity. And all the business for these machinery suppliers is basically coming from the export market, and India being the largest of these export markets. So these machinery suppliers are working very closely with the government. to try and get some relaxations in terms of the technologies, in terms of orders which have been placed already and other possible areas. So I think we are very hopeful that notwithstanding these restrictions, we will be able to find a way around. But like I said, let's wait for the final policy announcement before we can make any conclusive judgment on this. Yeah, just to add what Vinay said, even the policy is not clear as of now, as it's talking about some high-end, high-technology, or new technology equipment. Luckily for Premier, we have imported those new age and high technology equipment for our nitro-peter cell lines. So we are at an advantageous situation where those machines are already in our manufacturing line which have been, you know, kind of proposed for a ban. So on cell line, we are fully covered. On inkjet paper, we will, we will be waiting to hear from the, you know, Chinese government after the 15th of November, but we are quite hopeful that there would be a solution and we would be able to get our equipment well on time. Sure. My second question is, you know, you commented on realizations across DCR, non-DCR. Could you also sort of non-DCR module, and how has that moved, say, on a quarter-on-quarter or year-on-year basis? give your— give some color on the EBITDA spread, uh, in rupees per watt peak that you are making on, uh, you know, cell, cell module and Uh, yes, Amit, hi. Uh, so, you know, unfortunately we don't give out, uh, the spread information on a product-by-product basis. But of course, we have given you, uh, you know, indication of the prices. Uh, pricing— if I look— if you look at just the pricing, uh, the cell and module pricing has been largely stable on the DCR side. Non-DCR pricing obviously has come down quite sharply from about, you know, ₹14 plus, ₹14-15 last year. to about ₹12.50 right now. So that has obviously impacted NDCR margin. And equally, you know, we— the BOM cost in terms of the cell remains largely stable with the wafer pricing from China going up and down a little bit. But on the end, But then the silver prices again have kind of softened after they went up about 3 to 6 months ago. And then we have seen some changes, recent increases in cost of commodities like aluminium, copper, polymer films, etc., which has impacted profitability again on the module assembly business. Beyond that, Uh, you know, I can't give you unfortunately any specific numbers. Sure. Just one clarification, when you said that, you know, uh, how do the localization rules on BEPS really work. So with your existing CapEx earmarked for BEPS assembly, would that be enough to meet the 40% localization guideline, or would you have to do more CapEx on the manufacturing side. No, I think Sudhir wants to tell this. Yeah, see, I, I think to achieve the 40% localization, certain components have to be, uh, localized within India. We'll work with those other component manufacturers to localize it. Uh, it's not necessary that we have to go ahead and manufacture all these components within India. And some of these are, uh, there are manufacturers in India. We just have to qualify the product to our designs. But on an overall basis, you know, the cell-to-pack and back-to-container will qualify for the 40% easily. Okay, got it. Thank you, thank you so much. Yeah, we would not need to do any— any manufacturing is not required at this level. For 40% localization, we can manage with other components aside to the, uh, BMS and the cells. Got it. Thank you and wish you all the best. And the next question. The next question comes from the line of Kunal Shah with DAM Capital Advisors. Please go ahead. Yeah, hi sir. Uh, so first of all, like, uh, with the 7 gigawatt line now in place, how do you see the ramp-up schedule, um, over here for the second half of FY27? Uh, basically any guidance on the quantum of production that we can do here on the 7 gigawatt line? Hi, thanks. I'll take this question. I think our plan is, uh, considering that we will be, uh, getting our MNR inspection— we have applied for it. And we should be getting our ALMM, ALCM inspection done and the approval soon. Uh, we expect to do about, uh, 25 to 30%, uh, CUF ramp-up on in December on the Nidepetta plant and gradually move towards, uh, about 70% CUF by end of March. Okay, 70% by end of March. So that's the exact, uh, rate that you're guiding for, right? Yes. Understood. Uh, secondly, sir, on the total order book, now what proportion here would be the DCR piece? Because in the module mix shown in the PPT, there would be some component of DCR modules as well, right? So Out of the 16,500-odd order book, what is the DCR proportion here? So yeah, then you can take this. Uh, yeah, hi Kunal. So we've given you the breakup between the cell and module business, which is about 48% each of the total order book. And then within the module business, uh, very roughly I would say about about 20% is also for the DCR business. So in total, I would say about 68 to 70% of the total order book is for the domestic manufacturing business. The DCR business. Got it. And sir, uh, do we sort of retain, uh, the guidance of maintaining stable margins when we execute this current order backlog? So I'll take this question, uh, Kunal, uh, so the orders have been won at the prevailing current price environment, and we are hopeful that we'll be able to maintain margins subject to cost environment volatility. But as on, as of today while we speak, all the orders are at current pricing environment. Understood. And lastly, sir, you know, having acquired the Transform piece for a couple of quarters now, uh, could you provide some concrete guidance on the scale-up or any, any sort of milestones here? Like, how do we sort of see this business scaling up and sort of adding to the overall console piece. Sure, Vinay will take this question. Uh, Kunal, hi. Uh, so, uh, so I think we have said that, uh, the 4 GBA, uh, part of the Neo Truffle capacity has already been commissioned. Uh, the company has completed all the type testing for all the full range of power transformers except for the EHV segment. Uh, now for the larger transformer category Uh, customer acceptance and type testing usually takes some time. Uh, I would say about anything between 8 to 12 months depending on different product sizes. And then the conversion to export orders also usually is a long-drawn process. So I would say that we, in addition to this new truffle expansion, we're expecting a gradual ramp-up over the next 3 years to about 80%, 90% of the total capacity, uh, with the current capacity and the other 4.5 GBA capacity on the IDT and the other range of power transformers ramping up, I would say, over the next 1 year or so. So in general, uh, you know, uh, we are expecting the business to, uh, like we said last time, uh, more than treble, uh, in revenues. over a period of 3 years. Understood. This is very helpful, sir. Thank you so much and all the best. Thank you. The next question comes from the line of Bharani with Avendus Spark. Please go ahead. Yeah, good morning. Um, can I get the proportion of— I'm sorry to interrupt, Bharani, you're not quite audible. I would request you to use your phone on the handset mode in case if you are using a hands-free device. Is it better now? Oh yes, go ahead. Yes, we can hear you. Okay, yeah, yeah, sorry for that. Uh, wanted to check the proportion of sales done in the BPR market in the second quarter. Uh, in the modules segment. Uh, Bernie, I could not hear you, but I think the question was about the percentage of DCR sales in the quarter. Correct. So we don't give out any mix between our DCR and non-DCR business on a quarterly basis, unfortunately. Sure. Um, my second question is, um, in the opening remarks, um, there was mention of growth prospects both both organically and inorganically. So would like to have some color on what are these, uh, inorganic area segments that you know, we are looking at. So I think in general, uh, you know, what I really want to say is that Uh, the sector, uh, is placed— the fundamentals of the sector are extremely attractive with several growth opportunities, uh, present, uh, both in the solar technology space, uh, as well as all the other adjoining areas. Whether you look at battery technologies, inverters, green hydrogen electrolyzers, etc. So, uh, Largely the focus of the company going forward is going to be, uh, you know, leveraging our core strength in solar manufacturing and trying to focus on organic growth. Having said that, we will look at acquisitions very selectively wherever we feel that, you know, we can use these acquisitions to cut our time to market, particularly when the valuations are also very attractive. So I think in general, we are looking at a multiple— a lot of these opportunities both in India and even internationally, but the focus is on organic growth and closely linked to the solar sector. outside USA, like in Europe or other geographies? Okay, when you're telling internationally, does, uh, does this involve, um, uh, the erstwhile plan we had to have capacities in USA, or is it Sorry, Bharani, there's a lot of disturbance in the call. We can't hear you. Uh, oh, sorry, sorry. Uh, no, sir, it is, it is his line. Uh, he's speaking a little from, you know, a little distant from the microphone and probably is it better now? That's all I can find. Yes, please go ahead. No, so I was just checking when you said the international geographies, is it the, uh, uh, US plan we had had earlier that we are restarting, or is it a completely new geography like in Europe or some other area? So I think we have been pretty open that US and Europe remain geographies of interest to us. Both these markets, there is a very strong policy push towards domestic manufacturing. Uh, and we are focusing— we are looking at both these markets and evaluating several opportunities. So I think that those are the 2 main, uh, international areas of interest to us. So one last question. You mentioned that we had already placed orders for the, uh, and got the high-tech equipment for the cell line. How about for the ingots and wafers? We still haven't placed the orders, uh, for the ingot and wafer. Only for the wafers, uh, we had earlier tied up with a vendor and, uh, we had put in a small deposit with them. Those agreements are being registered with the Chinese government, uh, under the export control, uh, so that these are considered as pre-existing agreements. Okay, thank you so much and all the best. The next question comes from the line of Kunal Shah with DAM Capital. Please go ahead. Yeah, hi sir. Uh, so just one thing, you know, just recently, right now, there is a news flash about a potential block of GEF at a 7 to 10% discount to the current price. Uh, could you pro— like clarify the stance over here? Because, you know, one of the investor complaints typically have been around the noise around these liquidity events, etc., and, you know, fundraising, etc. So could you just, uh, Could you just provide some thought over here? Yeah, so Kunal, we have also seen some messaging going on. These are all rumors. There is no block, nothing from the promoters. And, uh, there is also a rumor, I think, going on that, uh, GEF, the private equity player who's invested in us, has appointed Citi as the banker, which is also false. Information. I think these rumors just create confusion. There is no block from the promoters. There is no block planned even in the next couple of quarters or even a couple of years. So from promoter side, we are very clear, no block. And from GEF also, we verified with them, they have not appointed Citi and there is no block. Understood, sir. This is very helpful. Answer on the potential, uh, the QIP also, like, could you just provide some clarity there whether it's just like an enabling resolution or we are sort of actively looking there as well? Yes, we have time and again stated this, that it was just an enabling resolution. We have enough cash flow from operations to fund our CapEx plans which we have announced. There is no QIB planned in the near future. Understood. This is very helpful, sir. Thank you so much for the clarity. there is some order from the SECI for the next year as a very discounted rate. So where do you see this 20 you know, ₹20 realization, uh, by the next year, uh, will it, uh, going to go down to the, uh, the order which we had seen at the pricing happened? The next question comes from the line of Praveen Sahay with PL Capital. Please go ahead. Yes, thank you for opportunity. Uh, sir, related to the DCR pricing I think you're talking about the order which one of the companies won in the SECI bid, right? Yes, sir. Yeah, so this, this I think was clarified earlier also. Let me clarify again, um, that cannot be treated as, uh, you know, a base to arrive at the market pricing because Um, this company is setting up their cell line, which is— which would be getting commissioned, I think, this quarter, next quarter. They had participated in this bid almost a year ago. And the bid got finalized about, I think, 3 months ago. And they had given this introductory pricing to get credentials in the market. So SECI tender, I would say, was to be treated as an IPP tender. And I said IP prices in the market for next year are around ₹20, and I think they have taken this order at about ₹17 or ₹18. Which was at a discount to be able to get credentials, and that is not reflecting of the market prices. It was more as an introductory offer. to fill up about 10 to 15% of the line capacity. any impact on the margin profile? Just hold on, just hold on. The operator, can you come in? We are not able to hear. Line is pretty bad. Um, do you think we should log off and log in again? Thank you for a clarification. Next question is related to the inventory. So as you had explained, there are 2 reasons why the inventory level has increased. So these inventories are also built up, also depends on the your order book. So we are not going to see with these kind of inventory built up Um, just give me one moment, sir. I'll just double-check. So whenever somebody is speaking, there's a lot of background noise. Yeah, am I audible? Is this better, sir? Yes. Okay. Yeah, a little better. Okay, go ahead. Should I? Yeah. Okay, so, uh, my question related to the inventory, sir, uh, because the inventory increase you had well explained. So, uh, and My question is whether this inventory buildup also depends on the order book, so we will not see an impact of this, you know, high order inventory buildup in the future margin profile. प्रवीण साहेब कुड़ियो प्लीज से समथिंग नो Yes, I mean, you know, all our production, both cell and module, is linked to orders. We make— we produce goods in the factories based on firm orders from customers. So inventory buildup is definitely against expected orders from our customers based on the exact delivery and production timelines. So, uh, as these orders, uh, you know, as the factories ramp up, uh, and production starts, uh, you know, coming through the, the gates the inventory position in relation to sales will normalize. Uh, so last question related to the CapEx. Can you give the FY27, uh, what would be the number we are looking for? So, uh, Uh, you know, in the, uh, the bulk of our CapEx for the cell and module, uh, expansion has already been completed. Uh, now we are mainly looking at some marginal leftover payments for the Nidupeta cell plant and then the battery and the aluminum plant. Plus, we are undertaking, you know, open access captive projects. So I think on the whole, the CapEx for the next 2 quarters should be moderated, I would say, to about ₹700 crore territory. Uh, which means the total CapEx for the financial year should be around ₹2,400 crore. Thank you, sir, and all the best. Thank you. The next question comes from the line of Sahil Seth with Anand Rathi. Please go ahead. Hi sir, congratulations on good set of numbers. So my first question is on our sell order book. If I see on a quarter-on-quarter, the order book has declined by about ₹8 billion. While our execution on the revenue side, we have booked revenue of around ₹4.7 billion. Uh, just wanted to know, uh, why, why is the decline in order book greater than what, uh, revenue we have booked for the quarter? Uh, sorry, Sahil, are you talking specifically about the sell order book? Yes, sir. Yeah, so I think there the difference is mainly coming because, uh, you know, in the last quarter, for example, if you see, we did not take any new sell orders. Uh, all the orders were for DCR or non-DCR modules. So obviously, as more production and dispatches were made, uh, the total outstanding sell order number has come down. Yeah, also because our module line is in— capacity is increased, right? So Sir, you were not audible. Uh, would you repeat? Yeah, yeah, I'm Chiranjeev here. I was just clarifying that our sell order book has decreased and DCR model has gone up because we commissioned our new 5.6 gigawatt module line, right? With more module capacity coming in-house, we would prefer to use the cells for our own captive consumption and gradually reduce our solar cell sales. Okay, so sir, apart from any executed sell orders, is there a moment where your orders have moved from your sell order book to a module order book, or are there any order cancellations for the merchant cell sales? No, no, there are no order cancellations at all. Okay, got it. And so my second question would be, on the US side, with the changing political scenario, uh, how do you, uh, now see the outlook for the solar industry in India? And how are we assessing the opportunity? Are we looking in terms of export or setting up any manufacturing facility in the US? I think, I think we log off and log on again because there's again a lot of disturbance. Um, can we get to the operator please? Can we log off and log on again? Uh, sure, sir. I will, I will call you back. Yeah, we're just, we're just doing it right away. Yeah, sure. So he'll call us back. Yeah, you'll call us back, right? Yes, sir. Yes, sir. Ladies and gentlemen, please stay connected while I reconnect the management. Thank you. Ladies and gentlemen, the management is reconnected. Sahil, you may go ahead with your question. Yes, sir. There was, there was a— we were not able to hear you even though you are able to hear as well, but we could not hear you. So now I think it's much clearer. Could you repeat your question, please? Yes. So my question was on the US side, with the changing political scenario over there and the MI tightening, do you expect exports from India to revive to US, or are we looking of setting a local manufacturing facility in US itself? There are 2 ways to look at it. One is with the changing environment there, it's a big, big positive for the renewable side. And then if you talk of MIP, we are clear that Make in America is the answer. And hence we are at advanced stages to finalize our factory location in the US. We already have a JV partner, so we are progressing well on that side. And we would set up cell manufacturing as announced earlier in the US. So, sir, by when are we looking to finalize this? Is there any timeline you have in mind? Yeah, about, about 12 to 18 months is what we're looking at. Okay, got it, sir. And the last question would be on the transformers business. Uh, in the previous quarter, we got recorded margins of around 22%. While in the current quarter it came down to 12%. So what is the normalized level of margins we can expect, uh, going on in this business? So yeah, so, so I think we have been clear on this, that the normalized margins on this business is about 15%. Last quarter we had a higher number because the, um, the steel and the copper costs went up, so we got a uh, you know, variable increase in those orders, whereas we had enough inventory which we had hedged for. So that gave us a little bit of an edge in terms of the margins. But on a normal basis we expect this to be a 15% margin business, um, going forward. Okay, got it, sir. That was very helpful and honest. Thank you. The next question comes from the line of Mayur Patel with 361 Capital. Please go ahead. 361 Asset, uh, thanks for the opportunity. Uh, so just 2 things, uh, given the mix, I think this quarter that margin of around 28% is also a function of more modules like you explained. But going forward, as the Naidu Peta cell facility gets ramped up over next 6 months' time to 70%, you said, uh, and demand obviously after December, C&I, uh, picking up in a big way because of the you know, that DCR regulation kicking in, uh, and this BSS, uh, big thrust from the government side, IPP hopefully should also pick up. And Kusum, you're seeing, reading some news around from the ministry, there is a final leg of finalization of Kusum 2. So do you think Again, the mix will start favoring us from the blended margins point of view going forward, number one. And the 10 gigawatt order book which you have Uh, that will be executed over next 12 months' time, I assume. Yes, about 12 to 14 months. Okay, but Mayur, hi, this is Benahir. Uh, so on the, on the government policy and the demand front, uh, I think, uh, the government is, uh, completely seized of the matter in terms of trying to diversify the energy mix and grow the share of renewable energy. I think we are going to see a lot of initiatives that we— even in the last 1 or 2 months, we have seen a very large, uh, green energy corridor scheme. And now you have seen the, the BEST initiative with the VGF scheme and Kusum and Suryagarh Yojana. Uh, you know, second version of both these schemes is also, uh, due for announcement, I would say, over the next, uh, you know, 1 or 2 months. So I think the— we do expect the overall macro for the demand side is very, very attractive and we do expect a lot of favorable policy announcements from the government. And, and that should obviously, uh, you know, uh, tilt the business focus and the mix of product, uh, toward the DCR modules. And that will, uh, you know, help us to maintain and increase our margins. Just to add what Vinay said, Mayur, that government is, is, is quite positive. If you look at the indications from them on Suryakhar 2.0 and Kusum 2.0. Both these projects, you know, give us a better margin in terms of realization. So we are quite confident that if Suryakhar 2.0, Kusum 2.0 comes in Um, the mix what we have today will only get better. Got it. Just last question, sir. Uh, for the wafer ingot, uh, you know, upcoming, uh, facility, if I recollect correctly, we have a technology tie-up with Taiwan-based Sino-American SAS, which is a, you know, a very renowned company. But given the technology tie-up, uh, still, how can we deal with this uncertainty around sourcing plant and machinery from China, uh, having this tie-up with SAS, does it help in some form? So, um, you know, this uncertainty is still not clear. Uh, you know, 15th of November we get more details on this. There are— there's fine print in the draft which has been shared that, you know, a certain kind of ultra-thin wafers, uh, manufacturing equipment would not be allowed, but maybe normal ingot wafer machines will be allowed. We'll get more clarity, but if you look at the Chinese equipment manufacturers, most of them have set up shop also in Southeast Asia where they are assembling the equipment. So we don't see this as a big risk in terms of our ingot wafer equipment sourcing. Coming to our partnership with SAS in Taiwan, that's more of a technology partnership. They have got deep knowledge and tech know-how on semiconductor wafers, and that will help us in choosing the right equipment, ramping up the line, and being able to produce world-class wafers. Sure. And just one last thing, sir. Uh, as you— so beyond next 5 years growth journey, does this SAS tie-up help us, say, going forward once we are you know, fully, uh, operating at including wafer ingots, everything is running steadily. After that, can we look at entering semiconductor wafers also, given your relationship and partnership with SAS? In future, I'm not saying your next one. That's on our wish list, but it's too early to say or commit anything there. We as a company would want to grow in the semiconductor space. When we would do this, with whom we would partner, is something which we don't have an answer today. But we first want to set our CapEx plans, which we already announced, the execution timelines. Everything to be completed on as per what we had committed, and we would be looking at various opportunities. Sure, thank you so much. All the best to you and the team. Thank you. Thank you, Mayur. The next question comes from the line of Amit with UBS. Please go ahead. Yeah, hi sir. Congratulations on stable set of results despite current headwinds. So I think I have one question which, you know, somebody in the previous questions tried to ask. On BES now, China— Chinese companies, most of them are in losses. They are not able to lift prices. The regulation in China, even on the BES side in the entire solar value chain, we have a point where, um, the China government is very clear that US and India can't be shared a lot of technologies. This 40%, you know, threshold for indigenization, right? I think I'm sure there's a lot of thinking that has gone behind. Um, do you think this is enough for us, and the sourcing of best capabilities beyond, uh, beyond the current dynamics will help us? Because the operating cash flow assumptions in the next, say, 2 to 3 years when we expand capacities, um, looking at the, you know, profitability pressure Do you think it's— it has a serious risk of slowing down the entire renewable capacity framework in India? So I just wanted your thoughts on this current deadlock in, uh, in BES framework, because minus BES, the renewable, uh, you know, growth is going to be a challenge. Yeah, so let me take this question, Amit. See, on BES, what we are doing is cell-to-pack and pack-to-container, and there is no, um, you know, problem with China in terms of supplying equipment for cell-to-pack and pack-to-container lines. It's more on the cell manufacturing on the BES side, and that is the reason why we have been cautious in not announcing large investments into cell manufacturing on the battery energy storage side. To answer your question on the 40% value addition, we will comfortably achieve that with cell-to-pack, pack-to-container, and the software bit of the battery energy storage system. And there is enough support from China for setting up these lines. There is, there's nothing which is banned on that front. On prices in China and BES companies and solar companies making a loss there, That's because of huge overcapacity, which we are aware of. And there is an anti-inflation policy which is being implemented to try and stabilize prices. We are seeing polysilicon prices wafer prices on the upward trend because of that. I think we would see that also a stabilization on the battery cell side, I think, going forward. But as far as we are concerned, we feel that the time to invest in best business, what we're doing, is, is the right time. And we having our reputation and the brand which we carry in the market with our customers and the history of 32 years which Premier has, we will be able to win best business from our IPP customers and C&I customers, and we will qualify for the 40% local content. Sure, sure, I'm sure. So second and quick question is on the ongoing, uh, so the current demand in India and the capacities that are going to be activated now. Um, do you think the consolidation here where a lot of marginal players go out of business or, you know, stop impacting, uh, the incumbents on P&L Um, it's going to be a longer-drawn race, uh, and hence the incremental returns on incremental investments, whether it's, you know, in got way for best, etc., materially lower for us in the next, say, particularly after, say, 1.5 to 2 years? Do you have any sense on that? Um, I know it's a, you know, it's still wait and watch, but still, your, your, your insights on this. Thank you. Uh, you're talking about like people who have just module business compared to backward integration? Is that your question? No, even cell capacities, module energy business is a passé, you know. Even with cell capacities by CY27 and CY28, India will have more than 100 gigawatts, right? Um, or at least 80-90. So I just wanted to understand, you know, Yeah, yeah, sure. So, you know, pure-play module business, it's a very difficult time, right? So I do see, um, you know, problems coming up on pure-play module manufacturers. In terms of standalone manufacturing for modules, that's, that's going to be really, really difficult. Backward integration is required. Your question on cell manufacturing, even if we reach 100 gigawatts with an average industry output about 70 gigawatts per annum, we are still looking at demand being quite strong. As we speak, the demand is almost about 50-60 gigawatts, and with, with the growth rate which we're expecting every year we see this demand to mostly equal or surpass the supply at least for another 12 to 18 months, whereas if cell manufacturing reaches about 100 Then again, between the cell manufacturers, you need to carve out manufacturers who have scale and who are getting into ingot wafer. So somebody setting up a 1 or 2 gigawatt cell line competing with somebody who's got a large cell line 5 times the size, um, is, is going to be a different game. So we feel that players which are going to be at scale, who have the financial bandwidth and execution skill to set up ingot wafer, that is backward integration, will be the ones which will be the you know, difference between men and boys. Um. Okay, sir, thank you and good luck to you. Thanks, Amit. Thank you, ladies and gentlemen. Due to time constraints, we would take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks. Uh, all right, no, I think we can take one more question. Uh, we're still at 10:57. We can take one more question. Sure, sir. A reminder to all participants, you may press star and 1 to ask a question. The next question comes from the line of Amit Bhinde with Axis Capital. Please go ahead. Oh yeah. Amit, please go ahead with your question and kindly unmute your line. Yeah, can you hear me? Am I already— yes, yes, yes, yes, sir. Yeah, so my first question is on the mix that you have in retail, CNI, and utilities. in the order book currently, uh, and related to that, now some of the developers are talking about they getting quotes for DCR module at close to around ₹18, which has been set as a precedence by one of your competitors. So how far are we, uh, in seeing the orders coming at ₹18? Uh, I mean, at, let's say, a quarter to down the line? So to answer your question, even in non-BCR business today, people are accepting orders at sub ₹12, but we at Premier are not. We are at ₹12.75 and above. Um, we do command a premium because of the, um, high-quality automated lines which we have and the experience which we hold. So I don't think the ₹18 is a benchmark. Uh, which should be taken. If somebody has quoted because of new lines or new business they're entering into, that would not be a benchmark for us. Right, right. So it isn't a near-term risk that, uh, we should, uh, think about, is what you're saying. On the pricing front. Yes. Yeah, and if you can also help me with the mix that you have in terms of retail, uh, CNI and UTDs scaling in the order book currently. Yeah, so as we said, you know, with these Suryagarh 2.2 and Kusum 2.0 being announced, we see the mix may become better than what it is today, if not remain the same. Right, right. Uh, but approximately, if you can help with the ballpark indicative numbers, if at all. No, no, we can take one more. Sorry. If you can help with some ballpark indicative numbers on that. So it's very difficult to— yeah, it's very difficult to give that number, um, on, you know, on a quarter-on-quarter basis, but, but roughly retail is about retail is about 35 to 40%. Okay, uh, right. And, uh, okay. And one more question that I had is that, uh, now whatever CapEx plans that you have, like would get over in the next year. So how should we look at the next leg of growth for Premier? One of the things that was discussed was on the semiconductor side. You spoke in one of the questions. Any other areas of business where you would deploy your cash flows? As I said, that's our wish list. We don't have a firm plan now. Once we have a firm plan, we will of course share with the markets. Thank you. Those were— we can take one more question. Yeah, we can take one more question, please. Sure, sir. The next question comes from the line of Bhaskar Chakravarthy with Jefferies Group. Please go ahead. Thank you very much. Uh, can you give us some color on the non-DCR order book that you have? What the kind of margins, on what basis that, uh, you are realizing currently? So, um, our— in our 16,000-odd crore order book, about, um, as Vinay said, about 25 to 30% is non-DCR. And when you talk of non-DCR business, it's of course, in the single-digit kind of EBITDA margins. Um, and in terms of pricing, generally it is upwards of 12.75. Thanks. And, uh, in your balance sheet as of 30th September, there's almost ₹2,900 crores of CWIP. Is that the cell line which has not yet been commercialized, uh, and you will commercialize that, uh, in the second half? That's right. So some of the interest and depreciation expensing for that line will come in, in the next 2 quarters. Yes, I think Vinay had given a number that in this quarter we're expecting the depreciation number to be around ₹600 crores. For the, for the year. For the year. For the year, not for the quarter. Right, right. Yeah, sure. Thanks, thanks very much and all the best. Thank you. Thank you. Yeah, I think we can go to the closing remarks now. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks. Uh, thank you everyone. Thank you for your time on the call. Uh, overall, I think we discussed, uh, you know, the whole range of, uh, demand, pricing, technology. And expansion initiative-related questions. I just have to say in the end that, you know, we are very pleased with another quarter of steady performance. Uh, the macro environment obviously has been challenging, but we've been able to kind of navigate that very successfully. Uh, next few quarters we are expecting, uh, a significant step up, uh, in the performance of the company, uh, with the Naidu Beta plant ramping up, Sitarampur volumes also, uh, you know, picking up because of this increased cell production. Transformer volumes also will pick up, you know, quarter on quarter over the next 2 to 3 years. And then, you know, mid to longer term, I believe that the macro for the renewables is very, very compelling. The government is working on a number of initiatives, and with these new schemes, Suryagarh Yojana and Kusum around the corner, the demand outlook is extremely positive. So we are very, very, I would say, you know, encouraged by the growth prospects of the business and look forward to working with you. Thank you so much. Thank you, sir. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.