Ladies and gentlemen, good day and welcome to the Sterling and Wilson Renewable Energy Limited Q3 and nine months FY 2022 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Jain, Head, Investor Relations, for his opening remarks. Thank you, and over to you, sir. Thank you, Rutuja. Good morning, everyone. I welcome you all to Q3 FY 2022 earnings call. Along with me, I have Mr. Amit Jain, Global CEO, Bahadur Dastoor, CFO, and Strategic Growth Advisors, our investor relations advisors. We will start the call with an update on the solar industry and operational highlights for the quarter by Mr. Amit, followed by financial highlights by Mr. Bahadur. Post this, we will open the floor for Q&A. Thank you, and over to you, Amit. Thanks, Vishal, and a warm welcome to all the participants on this call. I would like to give a quick update on the stake acquisition by Reliance Industries solar power industry, other allied renewable businesses, and status on our business operations. I will start by giving update on acquisition by 40% stake by Reliance Industries. Reliance New Energy Limited, RNEL, a wholly owned subsidiary of Reliance Industries Limited, has completed acquisition of 40% stake in Sterling and Wilson Renewable Energy Limited via a combination of primary investments, secondary purchase, and open offer. In December 2021, Reliance Group invested INR 1,100 crore through preferential issue representing 15.46% of post-preferential issue equity share capital of the company. The cash flow has strengthened the balance sheet and improved the financial profile of our company and has made it net debt-free. Post this, in January 2022, under Tranche One, Reliance Group acquired additional 9.7% stake from Shapoorji Pallonji and Company Private Limited, after which they came out with open offer. In the open offer, Reliance Group acquired 4.47% of stake in the company at INR 375 per share. In February 2022, under Tranche Two, Reliance Group acquired 1.97 crore shares from SP Group and Mr. Khurshed Daruvala, KYD Group, at INR 375 per share, representing 10.37% of equity share capital. Post Tranche Two completion, Reliance Group now holds 40% of the total paid-up equity share capital of Sterling and Wilson Renewable Energy Limited, while SP Group and KYD Group holding 25.71% and 12.85% respectively. Reliance Group also has been classified as a promoter of Sterling and Wilson Renewable Energy Limited. Along with the existing promoter and promoter group, the board will be reconstituted to include two directors from Reliance Group and additional independent directors. Mr. Khurshed Daruvala will continue to be the chairman of the board and lead the next phase of growth of Sterling and Wilson Renewable Energy Limited. Reliance is committed to make India a global leader in green energy based on the latest and most competitive technology and development capabilities. The SWREL, with its engineering talent, deep domain knowledge, global presence, and experience of executing some of the most complex projects globally, will become an important part of solar value chain of Reliance Group. SWREL will immensely benefit from Reliance Group integrated new energy vision, which will further strengthen our position as a leading EPC and O&M player globally. This will provide us with great opportunity to accelerate our revenue growth for medium to long term. Now, coming to solar EPC industry and the opportunities, there are strong levers which will drive robust growth globally over coming years. Stronger policy support from the government in terms of tax incentives, favorable policies for renewable sector, coupled with ambitious climate targets announced for COP26 are going to drive demand for solar energy to the new record worldwide. As per the International Energy Agency, by 2026, global renewable electricity capacity is estimated to rise more than 60% from 2020 levels to over 4,800 gigawatts, equivalent to the current global power capacity of fossil fuel and nuclear combined. Renewables are set to account for almost 95% of the increase in global power capacity through 2026, with solar PV alone providing more than half. With the Indian government accelerating its plans for a clean energy transition, the Honorable Prime Minister Narendra Modi planning to build 500 GW of renewable energy and ensure that half of our energy requirements will come from renewable resources by 2030. We expect outstanding growth in Indian solar power industry in the year ahead. Despite the record increase in module commodities and freight over the last 15 months, a LCOE for solar plants is still cheaper than the traditional source of energy as well as the renewable source of energy. It is estimated that solar PV utility scale market, excluding China, is expected to grow at 15% CAGR over the next few years. The growth led by developed markets like U.S., Europe, Australia as well as the Indian market. I would like to state that with our global reach, strong relationships with customers and lenders, as well as induction of Reliance Group as additional promoter of the company, we are well-positioned to capitalize on these growth opportunities. Now, one of our strong core area of O&M, our solar O&M portfolio as of date is 6.2 GW with third party O&M constituting approximately one-third of the portfolio. Production in O&M portfolio during the Q3 FY 2022 is primarily on account of sale of plants by clients to customers having their own O&M teams. We are focusing on increasing international O&M portfolio through organic and inorganic route. Our enhanced value to customers through O&M differentiators like drone thermographic, strong analytics and predictions, I-V curve tracers, underground cable fault finders, etc., will help us to expand our O&M portfolio. Now, I will give you some updates on battery energy and storage business. The battery energy and storage business and energy storage system is expected to grow 2 times in next 4 years to $12 billion annually. U.K. and Europe will be the next big consolidated market, with U.K., Germany, France, Italy and Spain being top 5 countries. We have added team of battery experts, sales and execution team to capture this market opportunity and have built order pipeline of 1.5 GWh across U.S., Australia, Europe and LATAM. Coming to the other book, as we have mentioned in our earlier investor calls, there has been a significant delay in finalizations of orders in FY 2022 due to unprecedented increase in modules, commodities and freight costs, resulting in order finalization getting pushed to FY 2023. Module price and logistics costs have softened slightly from January 2022 onwards, and we anticipate them to normalize by September 2022, which will propel the developers to move forward towards order finalizations. We expect to bag major solar PV EPC projects in our addressable markets in coming quarters. Our unexecuted order book as on February 15, 2021, before adjusting for revenue post December 31, 2021, stands at INR 5,559 crores, which is executable over next twelve months. This excludes solar EPC order amounting to INR 2,030 crores, which may now be unviable for developers considering increased module and commodity costs, for which we are in discussion with our customers. It is important to note that module price risk is limited only to pending partial supply for one project aggregating to 332 MW, amounting to INR 760 crore. However, unexecuted order value includes an order amounting to INR 1,500 crore relating to waste to energy projects in U.K. Though the primary inclusion in the company, our focus has shifted to scaling of solar business to meet the huge demand which will be generated due to the strategic investment. Board of Directors have taken a decision not to pursue this contract at this point of time and focus our energies on our core business. The same shall be excluded from the unexecuted order value on completion of various formalities, including novation of the order. With this, I will ask Mr. Bahadur Dastoor, our CFO, to take you through the consolidated financial highlight. Thank you very much. Thank you, Amit, and good morning. I will take you through the consolidated financials for the nine months ended December 31, 2021. Revenue for nine months has increased by 11% to INR 4,128 crore as compared to INR 3,716 crore in nine-month FY 2021. O&M constitutes 4.2% of total revenue in nine months FY 2022. The region-wise revenue breakup is as follows. Australia contributed 59.64%. Americas contributed 30.5%, followed by India, which contributed 8.7%, and the balance 1.09% by MENA, Africa region and the rest of the world. At a company level, the gross margins were impacted significantly in nine months FY 2022 on back of increased module prices and accounting for liquidated damages cost based on settlements done ongoing with customers. If we were to eliminate these unprecedented price increase and related costs, the normalized gross margins for 9 months FY 2022 would have been 0.7%. The normalized margins continue to remain lower on account of carry forward impact of items which had affected FY 2021. As part of the transaction with the Reliance Group, the company has signed an indemnity agreement with the SP Group, KYD Group and Reliance Group on December 29, 2021. According to this agreement, the SP and KYD Group would indemnify and reimburse the company and its subsidiaries for a net amount if it exceeds INR 300 crores on settlement of liquidated damages pertaining to certain past and existing projects, old receivables, direct and indirect tax litigation, as well as certain legal and regulatory matters. These amounts would be settled on 30th September of each succeeding year on the basis of the final settlement amounts with customers, suppliers, and other authorities. SP and KYD Group are consequently entitled to net off the amounts payable with specified counterclaims levied and recovered by the company and its subsidiaries on its customers and vendors relating to these matters. As at 31 December 2021, the company and its subsidiaries have made provisions equivalent to INR 300 crores, including INR 158 crores towards liquidated damages during the quarter ended 31 December 2021. There will be no further impact on the results of the company beyond 31 December 2021 on settlement of liquidated damages, old receivables, direct and indirect tax litigations, as well as legal and regulatory matters in accordance with the indemnity agreement. Recurring overheads for nine months increased by 10% to INR 261 crore. In nine months, we have accounted for accelerated mark-to-market loss of INR 21 crore on account of cancellation and rebooking of forward cuts on expiry relating to ongoing projects, which resulted in accelerated accounting of losses. The same has been flushed out from effective portion of cash flow hedge of the OCI, resulting in negligible impact on shareholders' funds. The same would be reversed in the coming quarters and would be recorded as gain. Now coming to the balance sheet. As on 31 March 2021, net worth stood at INR 1,062 crore. The increase in net worth was mainly on account of the preferential issue to the Reliance Group amounting to INR 1,100 crore. The same was partially offset against loss for the period. As at December 31, cash and cash equivalents stood at approximately INR 858 crore. The borrowings from banks stood at INR 280 crore on account of repayment from proceeds and against collection of ICDs and preferential issue made to the Reliance Group. Our company is net debt-free as at December 31, 2021, with net bank balances of INR 578 crore. Advance and performance bank guarantees encashed by four customers amounted to INR 588 crore, including INR 184 crore bank guarantee encashed in December 2021. With one customer, we have signed the final settlement agreement, and the encashed amount of INR 176 crore has been refunded by the customer in January 2022. We are in discussion for similar settlement agreement with another customer of the same group on another project, which is 84% completed and is expected to be concluded in the near future. With respect to the balance two customers whose projects are virtually completed, the company is in advanced state of discussion and is confident of recovering the amount in the coming quarters. As at December 31, we had a negative working capital of INR 637 crores as compared to negative working capital of INR 530 crores as on March 2021. Receivables due for more than one year as at December 31, 2021 stood at INR 403 crores compared to INR 412 crores due for more than one year as at September 30, 2021. They comprise of related party receivables of INR 166 crore, which includes receivable of INR 113 crore against which the company has received unconditional assurance of proceeds from sale of plant. The same is expected to be realized by March 2022. With this, we can now open the floor to questions and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhinav from Emkay Global. Please go ahead. Yeah. Good morning, everyone, and thanks for the opportunity. On this Waste to Energy project that you said which we will be not doing as per the Board of Directors' decision, is there any negative impact of that that we'll have to take in our books in the coming quarters? There will be no impact of this in the coming quarters. The project is in the process of getting novated with the joint EPC contractors. The company will be having no impact of this at all. Okay. Secondly, sir, you know, our unexecuted order book stands at INR 5,500 crore, and if we exclude this INR 1,500 crore, then we are at INR 4,000 crore, which looks like the lowest order book we have had probably in last few years. Just if you can comment, you know, how do you see the coming years in terms of, you know, revenue, because at INR 4,000 crore it looks. The quarterly run rate that we have is around INR 1,500 crore. If you can throw some light on what could be the order visibility, where we have bid or something of that sort. As we have explained in our previous investor calls that, because of the uncertainty in the market and volatility in module and commodity prices, that decision has been shifting and all the major order decision is getting moved to FY 2023. We expect the order pipeline, bidding, bid pipeline remains robust. We expect that in FY 2023 it will come back to the level it was, previously, and the hit rate and the m-order book position will be normalized if we don't see any answer, same uncertainty and volatility in the market. If you can just spend some time on the pipeline side, geographical pipeline that sometimes company gives, what is the pipeline for U.S. and Middle East, Australia? How is it placed today? Yeah. We have roughly, like, it's around 2.5 GW for U.S., around 3 GW for Europe and LatAm. Australia is 2 GW. For Middle East, Southeast Asia, CIS is 5 GW. India it is around 6 GW. The pipeline, the total pipeline is around 20 GW of the market which we cater to. Okay. We may also want to add that generally, if you look at the past, our strike rate in India has been high at roughly about 20%-25%. For the rest of the world, it has been around 14%-15%. Keeping that in mind as well as the fact of the order book pipeline that Mr. Amit Jain has just mentioned, it gives a good indication of where we should be in 2023 once the market again opens. If you were to look at the orders that have been finalized in the nine months to now, it is barely 2.5 GW this year as compared to 12 GW in the previous year. That itself shows that the market has shrunk to almost 20%-25% of what it was, with the market again slated to go back to a 15% CAGR compared to the previous year, not this one. We can again come back to where we were. This 2 GW that you are saying is ex-India, sir? 2.5 GW is ex of India. Yes. Any comments on the Indian markets? You have BCD coming in and etcetera. Do you see, you know, significant ramp up in, you know, upcoming. There's huge amount of capacity build-up expected. In the next few years, do you see India has been adding maybe anywhere between 6-10 gigawatts. Any significant ramp up from here on the solar side? See, in India. That's where you're correct. There will be significant capacity addition in India. No, no, go ahead, Amit. Sorry. You have rightly said there is going to be significant capacity addition in India. Our strike rate has conventionally been very high in India, 20+% strike rate for our share for the market like we cater to. We expect a significant ramp up in coming quarters and years in India. Thanks, sir. Those were my questions. Thanks a lot. Thank you, Abhinav. Thank you. Participants who wishes to ask a question, please press star and one. The next question is from the line of Puneet from HSBC. Please go ahead. Yeah, thank you so much for the opportunity. My first question is in terms of nature of contracts that you're signing on the EPC side. Are you saying that you're no longer taking any module price risk? I will start by answering that question. Mr. Amit can join in later. As we have explained in our calls before, we continue to be risk-averse in terms of the module price risk. We are not taking those risks as well as passing back risks to our module manufacturers to the extent that it is possible, either in the form of bank guarantees or moving module manufacturers to joint EPC contractors. Those thoughts continue. We are in the market. There are certain market dynamics that have to be followed, but as of right now, the organization continues to push to not take module risk. Amit, if you would like to add anything further. Yes. If you can add, you know, how are you really doing it in terms of, you know, what do you mean by bank guarantees and joint partnerships? In terms of bank guarantees, we are asking for higher bank guarantees than what we were asking in the past, thereby protecting ourselves from module price hikes. At the same time, if the contract requires that module needs to be part of the EPC contract and if it is bid along with the joint EPC contractor, then in that case, we do not take the module as part of our scope, but keep it as part of the scope of the joint EPC contractor, thereby protecting ourselves. That's what I meant by. Bank guarantees and joint EPC. Understood. Any thoughts on how you see module prices, you know, correcting or going up end of this year? Yeah. We have already started witnessing correction in module pricing. They have come down by almost 10% to the levels which they went when in December. We expect going forward till September 2022, the normalization in pricing and price correction in modules. That will give impetus to all the developers for contract finalization, and that will see an upswing in the market. Right. Are you seeing that, developers are actually waiting for those prices to fall before they give out contracts to you? No, actually there were a lot of bidding, like tariffs were decided through bidding routes. Earlier, the module prices were considered at a lower level. Those pricing or the when the IRRs are coming down, the decisions have been pushed out. That we have witnessed globally. With this correction in module prices coming back, more, it will prompt developers to take decisions, and I see the orders getting decided in coming quarters. Understood. My second question is on your battery business. What kind of offtake are you expecting going into future? How are those contracts different from what you sign at solar EPC level? Is there any, you know, material risk or pricing risk that you're taking there? In those contracts also the normal EPC risk would be there. The kind of volatility we have seen in the market last year, we'll be taking similar precautions as we are taking with the module manufacturers. The normal EPC risk would remain, but any kind of major volatility or major component will protect ourselves. In terms of sizing, how should one think of what is the rough pricing for these new battery projects, both in terms of megawatt and maybe, you know, rupees per megawatt types? That depends upon the geography. That varies a lot, where we are executing the project and what kind of technology and what kind of usage we are putting to. That's highly variable and depends upon the geography and the usage which we are projecting. As and when various market models are developing, this cost will keep on varying because battery sizes, battery technology is also upgrading. Right. The cost profile is also changing. That, I can't give you any exact figures on that count as of now. Okay, understood. That's helpful. Thank you so much. Thank you. The next question is from the line of Ankit Gupta from Alchemic Capital. Please go ahead. Hi, sir. Just to have a better clarity, you said around INR 5,500 crore of order book. Out of it, 1,500 will be reduced, so around 4,000 crore of solar EPC order book. Mr. Amit mentioned that around 760 crore of order book will be having module price risk. For the remaining 3,000-3,300 of order book, we can assume gross margins which were earlier or because we have taken some losses or the gross margins will be 0.9% or 1%, which we have mentioned for the past nine months. I'll take this call. Yes, gross margins have dipped significantly. For the remaining UOV, we expect the gross margin to be at low single-digit% for the rest of the order book. Okay. Considering all the losses that we have already taken. Despite the losses we have taken, then also our gross margins will be in the low single digits only. Yes, because the margins have been suppressed due to the various Yeah. Module hits that we have taken. While all the rest of the order hits have been taken, we will have the carryover effect of these suppressed margins. Hence, while the losses have been taken, the order margins will continue to remain suppressed in low single digit. Got it. Sir, just to understand you were telling some indemnity agreement. Can you just explain it slightly more? What is it? Could you just repeat that question, please? Mr. Amit was explaining some agreement that there will be no more losses from post-December quarter because there has been some agreement which we have made that around INR 300 crore of losses. He was explaining something, I missed that. Yeah, I was mentioning that. There is an indemnity agreement which has been signed between the company and the promoters, old and new. Mm-hmm. Mm-hmm. Mm-hmm. On the basis of that, for certain categories of items, namely liquidated damages, receivables of old projects, certain legal and regulatory matters, as well as direct and indirect taxation. For a net amount in excess of INR 300 crore. Once the final settlement has been crystallized, the existing promoters, which means the erstwhile promoters prior to Reliance coming in, the SP and KYD Group, will reimburse the company on 30th September of each year for whatever is the amount which is crystallized over and above INR 300 crore. The company has already made provisions on this count up to INR 300 crore, and therefore, anything further on these matters will not impact the results of the company. Understood, sir. Good to know. Last question from my end. The O&M order book has also reduced from around 8.7 GW to 6.2 GW, and you said that it is because of clients selling the projects. The O&M agreement must remain with us only, right? Even if the clients are selling it to someone else. What's the catch here? It is not necessary that once it is sold, the O&M agreement will continue because the new developer, if he is having, an O&M team within himself, he can choose to do that on his own. Therefore, there is a reduction on the fleet from 8 GW to 6-point-odd GW on sale of certain plants to new owners. Sir, do we see this risk in the remaining O&M list also? In fact, we will see the O&M order book slightly rising as we complete more of our in-house plants. Mm-hmm. At the present we don't see this risk. Understood. Last question from my side. We have seen gross margin dip in O&M also. They were consistent around 35%, but this quarter we have seen a significant dip in O&M also. Why the margins have declined in O&M? O&M is not going on percentage of completion. It is revenue less cost. Okay. In the case of O&M for this particular quarter, there are certain costs which have been incurred, but the O&M revenue will come in the next quarter. There are certain small settlements done on closure of these existing jobs. Mm-hmm. -which have impacted us. In O&M, it is a mere debit of costs and revenue is the billing that we do to the customer. This has effectively given an INR 12 crore impact on the O&M margin. Were we to add the INR 12 crore back to the INR 5 crore margin, it would be about INR 17 crore or 35.79%, which is your normalized- Yeah. O&M margin. Got it. Thank you, sir. Thank you. The next question is from the line of Anupam Gupta from IIFL Capital. Please go ahead. Yeah. Good morning, sir. I have three questions. Firstly, just to clarify, so once you exclude the WTE order, effectively you have zero order book in Europe, right? That's the right way to look at it? Yes. Yes, you're right. Okay. Second question is on the LDs which you have settled and you have received some amount in January and you expect further receipts from the balance sheet project? That is bank guarantee, Anupam, not LD. Sorry, yeah. Bank guarantee. Do you expect to reverse a certain provisioning which you have done for those projects and can help your gross margin in fourth quarter or first quarter next year, or no? That depends. The bank guarantee amount would be completely recovered. If there are any further LDs which have to be provided on those projects, those would, as we have explained, not impact the company because it would be covered under the indemnity agreement. No. What I wanted to understand is, let's say you have a very large impact of gross margin in the nine months. What portion of that can get reversed because your settlement will be done from these four customers? That will depend on the settlement amount, Anupam, which is presently under negotiation, so I cannot say. Okay. We have not provided for any bank guarantees. Mm-hmm. We have provided for LDs. LDs are separate. Since this entire bank guarantee is also in a way covered under the indemnity agreement, because it has been recovered against liquidated damages, there will be no further provisioning. It'll only be a reversal of, in terms of cash. Understood. Lastly, your indemnity agreement, does it only cover the related party transactions of the SP Group, or does it cover every contract which you have entered in the past, when SP and Mr. Khurshed Daruvala were driving the operations? It is not every contract which was done in the past. There were certain existing contracts on the day these agreements were drawn up, which were identified, and it is for that. As well as old receivables, identified old receivables, more than one-year old. Okay. Also, the IL&FS case. In fact, that is. Okay. A reason why there'll be no further impact on the company in terms of IL&FS, and that's why the auditors also dropped the qualification which they had put erstwhile in IL&FS. All of those items will get covered. Nothing beyond INR 300 crore will hit the company. In this quarter, the provisioning has reached INR 300 crore, and therefore we believe no further impact. Okay. Basically the amount which you have provided in this quarter, it includes LD for those contracts also which are indemnified. Yes. Anything beyond INR 300 covers all the four items which you mentioned, which will not impact you and it will be met by SP, just to understand it better. Yeah, it'll be met by the SP and KYD Group. Understood. Okay. Just lastly, actually you mentioned slightly on the order book, but you have only about INR 400 crore, and given the execution timeline, so do we expect, let's say at least for the next few quarters, you will definitely see a sort of weakness in the revenue? That depends on order inflow. As Mr. Amit has explained, we are looking at order inflows coming in the next financial year. Domestically, we have signed about INR 600 crores worth of orders. In the domestic market, we continue to maintain about a 25% strike rate. On the basis of order inflows, yes, there would be a gross margin which we are getting right now, and, minus the running rate of overheads, but it depends on when it will come. Maybe the next quarter or two could be weak, considering the gross margins of the existing projects and the overheads. Revenue will be weak at least in the first half of the next year, post which, on the basis of order inflows, we will see it rise. Understood. The new orders which you are winning, will those be similar to what, in terms of gross margins of 10% which you were doing earlier, or significantly lower than that? No. As of right now, what we have booked is in our median of margins. Okay. Understand. That's all from my side. Thank you. Thank you, Anupam. Thank you. The next question is from the line of Danesh Mistry from Investor First Advisors. Please go ahead. Hello. Hi. Good morning. I had a couple of questions. The first one is that these liquidated damages that are there, you know, are they from any one particular geography? And what is the reason behind these liquidated damages? I will start off and Mr. Amit will just join in. Liquidated damages can be for a variety of reasons, including majorly for delay in completion of the project. Mm-hmm. What we have provided is not in any single geography. Mm-hmm. in various geographies across the world, where we felt a provision is necessary. Amit, you may add further, please. As Mr. Bahadur has stated, that these are reasons for the delay in projects and not limited to any particular geography. Got it. Are these linked to essentially the solar panel issue or are they linked to the same problem, where basically the solar panel prices went up and supply was short and that's why there were delays, or was there some other reason behind it? No, there were multiple reasons because in the last couple of years, because of COVID hit us. There were severe border restrictions. The workforces could not be deployed. The whole industry faced a severe logistical challenge. The module manufacturing workforce, that's true for everybody. There were a host of other factors besides that which led to these situations. Okay. In Australia, I remember last quarter we had a situation where one of the vendors went bankrupt and we had to, you know, quickly handle the situation. Do we expect anything? I mean, it's a different case of bankruptcy, but are things now settled in Australia, which is one of our major geography? Yeah. We are settled in Australia and the project execution is happening despite the challenges which were there and the impact created by them. We are trying to minimize the impact. The operations are streamlined, and we are on course to complete our all the projects. Got it. You know, while we talk, you know, on the solar pipeline, but we've also identified other business avenues for our company. You know, when do we see any pipeline in those avenues fructifying for us? The other area which we have addressed is battery energy storage system and energy storage system. Right. which we see as a core growth area for us. Mm-hmm. Mm-hmm. There is going to be a robust pipeline around that also. Mm-hmm. In the next quarter, pipeline and targets we want that particular sector as well. Fair enough. Look forward to it next quarter. Just one last thing. You know, now that Reliance has come in, you know, generally they're quite a good operator. Do you see some improvements or some changes in the cost structure of the company? When you say cost structure, are you meaning? Right now the transaction has just completed and various discussions are. Essentially, you know, generally cost structure can be mainly on the fixed cost side, right? You know, but do you see anything that can change that dynamic? That is something we are doing on our own anyway, to try and minimize and optimize the overhead as much as possible. Mm-hmm. That I'm talking about as far as the fixed structure is concerned. As far as procurement is concerned, we are very sure their scale of procurement will only help us in our project procurements. Sorry I interrupted you, Amit, but there seems to be a lag, so maybe I missed what you were saying. It's fine. I think you have answered the question, Bahadur. Thanks for that. Got it. Okay. Thank you, Bahadur. Thank you, Amit, and I wish you the very best of luck. Thank you very much. Thanks. Thank you. Thank you. The next question is from the line of Mohit from DAM Capital. Please go ahead. Hi. Good morning, sir. Sir, my first question, sir. You see, when you say EPC for solar battery storage system, does it include hydrogen also, or it is not under our, you know, consideration? I think that's not the area as of now, but we'll be definitely working with the green energy project. What I'm saying, the green hydrogen, as we have stated, that battery energy storage and solar is going to be our core area. We're definitely working with the solar project associated with green hydrogen. As of now, we have not decided anything to move on the green hydrogen space. Are you participating in hydrogen tender of IOCL? Green hydrogen tender? No, we are not participating in that. We'll be working only on the solar projects or renewable parts associated with the green hydrogen, but per se will not be associated with the hardcore green hydrogen implementation. Understood, sir. Is it possible to enter into domestic contracts without module passthrough? I understand that most of the PSUs who give out the contract, those are based on your fixed price contract. Is the nature of contract changing because of industry pressure or can you throw some light? As we have stated, that we are not taking the module risk, and wherever the module risk is there, either we pass on to our suppliers or otherwise we'll not address that particular segment of the market. But definitely with the discussion with, not only in India and international markets, we see a trend, a flexibility, and an approach of risk sharing is coming in, whether the government or the private player, as far as the modules are concerned. Discussions are happening, you know, on various forums, how to mitigate that risk and various risk sharing mechanisms can be developed. The domestic market as of now for us is mainly BOS. Module is a passthrough, and we are not taking any module risk in the Indian market. Given that the new change in strategy, can we expect some, you know, a different profile in terms of order book, in the sense your India order book will grow significantly over time and the other geography will diminish? Is that a fair assumption? No. No. Definitely India order book, because the kind of growth ramp-up which we foresee in India, definitely we are seeing an uptick in the order book in India. India ramp-up would be significant, but that will not come at the cost of other geographies. Our strategy and approach is going to be the same. As we've stated, our pipeline in various geographies remain robust. Next year we see a significant movement in the project contract closures and order booking. There is no compromise or we are not cross-cannibalizing market. We are growing one market at the cost of the other. India will grow, but at the same time, other international markets will continue to grow. Our focus will remain the same. How is the Middle East behaving at this point of time? Are you seeing more orders from domestic Middle East pipeline? Middle East, as we have already informed, like Middle East continues to be a market as far as the pipeline is there. Middle East pipeline is strong. In last couple of years, we had witnessed a very strong competition from Chinese players, in Middle East market. Mm-hmm. What we have seen during the price volatility and module price challenges, a lot of smaller players are suffering huge losses. People, those who are like, and the companies who have booked projects, have suffered massive losses. We see lot of players getting out of that space. Mm-hmm. Chinese also taking rational decisions. We see an opportunity for us in that market. Going forward, the strong players who have delivered on projects like Sterling and Wilson and have demonstrated their commitment to their clients will also getting a major opportunity and boost for their operations even in Middle East and Africa market. What is your new expected EBITDA margin in the new orders which you're booking? Let's talk about gross margin. Mm-hmm. In our new orders, the blended gross margin, we intend to keep it the same as what we have given in the past. That is between 10%-11%, which is what we are seeing so far. Understood, sir. Thanks and all the best, sir. Thank you. Thank you. The next question is from the line of Sushil Joshi from Indus Equity Advisors. Please go ahead. I would like to know what kind of Reliance brings to Sterling and Wilson with growth outlook for next 2-3 years. Besides procurement, which you highlighted. I think first of all, I would like to state that deal has just got completed. Applications are happening on various aspects, so it will be too early to give any specific details on that count. Definitely having Reliance as a promoter will bring us its significant advantages, as we say that economies of scale and procurement bargaining powers, which we already have, will come in. Economies of scale will come in, but it is too early to give any specific details on this aspect. Sir, the synergy on procurement is a small part of the business. We'll update you next quarter with specific details. Yeah. Can you give an outlook, what kind of size of EPC on a global basis and India basis you see that India would implement 25, 30, 50 thousand MW per year next five, six years? And globally? Globally there will be significant addition, but as we told you that our international pipeline is going to continue to be robust 19-20 gigawatts even for FY 2023. That is there. The long-term view, we see the market growing at the rate of 15% CAGR. We see a robust growth in all the markets including India. India we see the 6-8 gigawatts in the next two to three years. Then we see an addition of 10 gigawatts because the latest targets which has been announced by Government of India that call for 40 gigawatts of addition per year. We see materialize even in the short term from 8-10 gigawatts capacity addition in India. Are we being conservative on the domestic front or it's being practical? Conservative in what sense? The estimates of manufacturing. If you hear Waaree Renewable or any other manufacturer. We are being conservative, so there Okay. Okay. And- Whom would you qualify as your nearest competitor in domestic and global basis, the top two, three globally and domestic? I'm sorry to interrupt, Mr. Amit Jain. Your voice is breaking, sir. Globally and domestic. There are multiple players. There is no specific player, and various markets have various challenges. Like Middle East, Africa, there are Chinese. In Europe, there are Spanish companies. As a company, we cannot qualify that there is one single company which is a significant challenger to us. It varies from market to market and pretty diverse. Thanks a lot. I'll await your answer in the next quarter conference call. Thank you. The next question is from the line of Sanjay Kumar from iThought PMS. Please go ahead. Hi, sir. Thank you for the opportunity. All my questions have been answered. Just one confirmation. Given this jump in capacity addition in India, will BCD, the Basic Customs Duty, have any effect on us? Where have we been procuring for our Indian EPC orders? Will that change going forward? Any thoughts on the BCD? That's it. I think for us it is BOS market. This, the impact of BCD on module prices, BOS market. Customs duty will not impact us as far as our contracts are concerned. There are various arrangements with various developers we're working, so I think project pipeline will also remain strong in India and there'll be no impact on us for that. Okay, sir. Thank you. Thank you. The next question is from the line of Kaushal Dedhia from Axis Bank. Please go ahead. Sir, thank you for the opportunity. Most of my questions have been answered. I just wanted to ask on this indemnity agreement that has been signed for this INR 300 crore amount. As I understand, this will be settled in September 2022 and then every year going forward. Is that right? Yes. The first settlement will be in September 2022. It will be settled on the basis of a settlement with the customer, or authority concerned and not on the basis of provision. The company has finished making provision, so there'll be no further impact. Understood. Sir, how long will this continue? Is there an end date to this? Well, this will continue for the next, maybe 5-6 years. Okay. Thank you so much. Thank you. The next question is from the line of Danesh Mistry from Investor First Advisors. Please go ahead. Yeah. Thank you for taking my question again. Just wanted an update. Anything any changes on the Argentina receivables issue? I believe you were talking to the client there for quite some time. Argentina, the matter is under arbitration. It is also an item that is covered in the indemnity agreement. Mm. The matter is still at the initial stages of arbitration. Okay. The global settlement which we were attempting to do has not worked out. Mm. We are right now proceeding with the arbitration. Oh, got it. All right. Thank you, Babu. Thank you. The next question is from the line of Shashwat Tandon from Shaswat Textiles Private Limited. Please go ahead. Yes, hello. Okay, actually my question was being asked earlier, but I will ask another question to the gentleman. Can we expect any local procurement of modules from Waaree Renewables or from Reliance New Energy instead of Chinese modules? See, are we talking of the domestic market or the international market? For Sterling and Wilson as a procurement model, because I believe we also suffered from the logistics cost of supplying modules from China to Australia when logistics costs went through the roof. Right. As a strategy, can we think about getting those procured from Jamnagar if Reliance New Energy sets up a plant for those or Waaree Renewables and supplying them globally from here? Procurement from Reliance would be a natural progression of what has happened with the organization, right? I don't really think I need to answer that question. This is a given. Now, that will obviously give us a much more dependable supplier who's also our investor. The point about the domestic market, we do not procure modules domestically. As far as international markets are concerned, we need economies of scale. Someone like a Reliance, of course, is a totally different thing. Erstwhile Indian suppliers are not able to compete with the Chinese in terms of scale, forcing us to buy from Chinese. As procurement from India will increase on the basis of supply in India, yes, then that's a completely different question. Mm. Amit, if you would like to add anything I may have missed. That's correct, Bahadur Dastoor, because that totally depends upon the capacity addition in coming years in India. We are witnessing a movement towards that. That will take some time. Until that time, we have to, like, work on the international procurement model, which is already in place with us. Okay. Thank you. Thank you. The next question is from the line of Neeraj Dewan, an individual investor. Please go ahead. Good morning, and thank you for this opportunity. My question is with respect to slide number 4, strategy. Point number 2, you mentioned that, you know, you will diversify into project development. Does it mean that you will be bidding for projects in the future in those geographies? What's exactly the thinking behind this? Thank you. No. Yeah, actually, what we have seen, the trend in the EPC market to improve upon the margins, all the EPC players are opting to develop. This can be with or without option. Some of the markets like U.S., Australia, you can develop the projects without going for bidding for it. Some of the markets in Europe, you have to go for capacity allocation, okay? After the allocation of capacities only, you can develop the projects. It will be both the models will be there, with bidding and without bidding. As of now, which we have indicated and we are starting that model in Europe, and it will be started with capacity allocation bidding. There's no tariffs fixed or that. It is just the bids for getting the capacities. Having said that, would like to clarify that we continue to operate on our asset-light model. This is just to secure exclusive EPC rights and improving our margins. This development rights will be flipped to the ultimate owner before start of the construction. Okay. We are not looking at becoming investor at any stage in the asset. Okay. You said before start of construction, you'll be flipping it to the eventual investor. Yeah, yeah. We'll be flipping it because our job is to get the capacities, develop the project, bring it to ready-to-bid stage, and ultimately, yes, we'll be flipping it to ultimate investor. This won't entail large amount of capital commitment in that case? No. It will not entail that kind of a capital commit. It will entail commitment, but not capital cost. Okay. Thank you very much. Thank you. Ladies and gentlemen, this was the last question for today. Thank you. I would now like to hand the conference over to Mr. Amit Jain for closing comments. Thank you, everyone, for being on call today with us. The robust backing of Reliance Group and Shapoorji Pallonji Group, we endeavor to accelerate our growth trajectory by aggressively pursuing large projects, that is in U.S. and Europe, where we foresee a huge potential of growth. We are to have reached an inflection point from where we anticipate the growth of solar industry to garner further pace and momentum. With our deep-rooted client relationship, global presence, ability to provide customized solution, strong track record of executing complex and large scale projects supported by strong, robust balance sheets and strong parentage of Reliance Group and Shapoorji Pallonji Group, we are confident of regaining our leadership position. I would like to thank everybody for joining the call. I hope we have been able to address all your queries. For any further information, kindly get in touch with Mr. Vishal Jain, our Strategic Growth Advisor, our Investor Relations advisor. Thank you once again, and have a great day. Thank you. Thank you. On behalf of Sterling and Wilson Renewable Energy Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.