Ladies and gentlemen, good day and welcome to Sterling and Wilson Renewable Energy Limited Q2 FY23 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. Sandeep Thomas Mathew, Head, Investor Relations, for his opening remarks. Thank you, and over to you, sir. Everyone, I welcome you all to the Q2 FY23 earnings call. Along with me, I have Mr. Amit Jain, our Global CEO, Mr. Bahadur Dastoor, our CFO, and SGA, our IR advisors. We will start the call with an update on the solar power industry and operational highlights for the quarter by Mr. Amit, followed by the financial highlights by Mr. Bahadur. Post which, we will open the floor for Q&A. Thank you, and over to you, Amit. Thanks, Sandeep, and a warm welcome to all the participants on this call. I would like to give a quick update on the solar power industry, other allied renewable businesses, and status on our business operations. Now, coming to solar EPC industry and opportunities. The global solar market is growing exponentially. It took around a decade for worldwide solar capacity to reach one terawatt from 100 gigawatts in 2012. In just three years, SolarPower Europe predicts global power to more than double to 2.3 terawatts in 2025. Solar remains the fastest growing renewable energy, representing over half of the 302 gigawatts of renewable capacity installed internationally in 2021. With 168 gigawatts of addition, solar installed over 70 gigawatts, more than the next greatest installer, wind, and more than all non-solar renewable combined. The role of solar in the global energy transition is getting more and more prominent, considering that in 2021, solar alone installed more capacity than all other renewable technologies combined. In 2022, global solar is expected to continue the decade-long record-breaking streak, installing more than 200 GW of solar for the first time. Solar's success story over other technologies has many reasons, but a key factor is its steep cost reduction curve over the last decade, which has made solar the global cost leader. While the cost of solar has been lower than fossil fuel generation and nuclear for several years, it is also now lower than wind in many regions around the world. BloombergNEF estimates for the global LCOE for utility scale PV to land $45 per MWh in the H1 of 2022. Despite losing some ground, this still marks an 86% reduction since 2010 in nominal terms. Now, wind solar projects are now around 40% lower than BloombergNEF's global benchmark for new coal and gas-fired power, which are at $74 and $81 per megawatt hour, respectively. The spread with conventional generation technology is widening, considering that the cost of coal, gas and nuclear went up. Despite the record increase in modules, commodities and freight over the last 24 months, the LCOE for solar plants is still cheaper than the traditional source of energy as well as renewable source of energy. There are strong levers which will drive robust growth globally over the 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 new records worldwide. Solar industry is well poised to grow in long term as IPPs have huge plans for global capacity addition. The global tariffs have already corrected upwards with the revision in prices and a lot of projects are expected to get finalized in FY23, especially H2 FY23. Indian solar power capacity has surged over 17-fold to 59 GW since Honorable Prime Minister Narendra Modi came to power in 2014. The Indian government has accelerated its plans for clean energy transition, with Prime Minister Narendra Modi pledging to build 500 GW of renewable energy, with 60% of it coming from solar. This is to ensure that half of our energy requirements will come from renewable resources by 2030. Thus, we expect outstanding growth in Indian solar power industry in the years ahead. The public sector has been called upon to join the cause too, with state-run giants such as NTPC, NHPC, SJVN, NLC India Limited, Coal India Limited, et cetera, crafting solar plans and indicating a strong pipeline. The government is also persuading and incentivizing the private sector to shape India's clean energy future and make it a sunrise sector, just like IT services after 1991 economic reforms. Major Indian conglomerates have announced investments and commitments toward renewable energy targets, with about 150 gigawatts of renewable energy expected to be added by private clean energy companies alone. India has also announced a roadmap to become a hub for the production and export of clean hydrogen made from water and renewable electricity. India has set a 5 million ton green hydrogen production target by 2030 to help bolster its geopolitical heft and be a game changer for the country's energy security. With the government promoting the new age emission-free fuel, the mining industry has also shown significant interest in the space. With this development, we expect huge increase in the scale of average project size in the Indian solar industry. Utility-scale solar market performance was mixed in the Q2. A total of 2.7 gigawatts were installed in Q2, just 500 megawatts more than Q1, constituting a 25% decrease from Q2 2021 and a 17% increase from Q1 2022. In the H1 of the year, deployments are at their lowest level since 2019, supply chain constraints and trade policy issues continue to suppress utility-scale solar installations. The U.S. utility-scale segment experienced a volatile period over the last several months. First, the administrative order delaying new tariffs was a relief, which allowed developers to resume activities as Southeast Asian manufacturers could restart module shipments to the U.S. UFLPA, the Uyghur Forced Labor Prevention Act implementation led to detention of several module shipments, further constraining supply and hindering project construction. Hopes that the historic passage of the Inflation Reduction Act, IRA, in August will prove to be a massive growth catalyst for the solar industry. However, due to the near-term supply chain constraints, according to Wood Mackenzie report, more than 77% of the effect of IRA will be materialized in utility-scale segment after 2024. The lack of equipment availability has led to continued project delays, thereby decreasing the 2022 forecast of 600 MW to 8.1 GW, the lowest annual total since 2018. The industry will continue to navigate the UFLPA requirements during the rest of the year, and supply is expected to return to a steady state at some point in 2023. More than 30 GW of renewable power projects are expected to be permitted on BLM lands between fiscal year 2022 and 2025. The vast majority of the capacity will be solar powered. In Australia, the torrential rains adversely impacted the solar EPC activity. It is also facing resource shortage of white and blue-collar manpower. However, the recent election has been a game changer in terms of the policy support for renewable energy. The new Labor government has plans to unlock renewable investment, upgrade the grid, and bring certain policies more in line with states and territories, many of which have more ambitious climate goals. Labor's main energy policy, Rewiring the Nation, includes plan to funnel AUD 20 billion into new transmission links to accelerate the uptake of more clean energy. The plan is part of Labor's pledge to cut Australia's 2005 level greenhouse emission 43% by 2030, projecting renewable reach an 82% share, which was earlier 59% in the national electricity market by then. The government also raised the migration cap in September 2022 to address the issue of skill and labor shortages. GlobalData says in a new report that solar installation in Australia could grow by a factor of four by 2030. It estimates that the country will reach a solar capacity of 80.22 gigawatts in 2030 from 17.99 gigawatts in 2020. In June 2022, the EU energy ministers agreed to increase the share of European energy consumption coming from renewables such as solar or wind power to 40% by 2030. The impact of the Russian war on Ukraine and the accompanying energy security challenges alongside EU climate goals are driving the continent's renewable transition, with 25 of 27 EU member states set to install more solar in 2022 than 2021. As the continent reels from the Russian war on Ukraine, the EU has refocused its attention on the role of renewables in energy security, with EU expected to install 39 GW of solar power this year. The real acceleration will happen in the medium term, with upward of 100 GW of annual installations by 2025, paving the way to 1 terawatt of solar by 2023. 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 GW, equivalent to the current global total global power capacity of fossil fuel and nuclear combined. Renewables are set to account for almost 90% of the increase in global power capacity through 2026, with solar PV alone providing more than half. Our focus is to grab large share of EPC capacity additions in FY 23, like 23 gigawatts in U.S., 16 gigawatts in Europe, 3 gigawatts in Australia, and 16 gigawatts in India. It is estimated that solar PV utility scale market, excluding China, is expected to grow at 15% CAGR over the next few years, with growth led by developed markets like U.S., Europe, Australia, as well as the India market. During the recent 45th AGM, Reliance Industries announced plans for starting production of solar cell, battery packs and green hydrogen from the Dhirubhai Ambani Green Energy Giga Complex. Reliance plans to commence manufacturing of solar photovoltaic cells and modules by 2024, with an annual capacity of 10 gigawatts that will be scaled up to 20 gigawatts in a phased manner by 2026. Reliance is already one of the largest producer of gray hydrogen globally and aims to progressively start the transition from gray hydrogen to green hydrogen by 2025. Importantly, Reliance plans to have 25 gigawatts of solar energy generation by 2025 for its own captive use. We expect to get a meaningful piece of work from Reliance's new energy goals. I would like to state that with our global reach, strong relationships with customers and lenders, as well as the induction of Reliance Group as an additional promoter of the company, we are well positioned to capitalize on these growth opportunities. Reliance Group investment in company has led to strengthening of company's balance sheet and increased confidence to customers, suppliers, bankers and other stakeholders. Now I'll give you the overview of our solar O&M business. Our solar O&M portfolio as of date is 7.2 gigawatts, with third party O&M constituting approximately one-third of the portfolio. While our portfolio has increased as of March 2022, we anticipate about 1.8 gigawatt of the portfolio, which is currently under construction commissioning phase to start contributing to the top line by Q4 FY 2023. O&M constituted 5.4% of revenue in FY 2023 and stood at INR 82 crores. We are focusing on increasing international O&M portfolio through organic and inorganic route. With more and more processes and procedures digitized in O&M, we are unlocking the value of predictive maintenance and making increased use of it, which results in improvement in efficiency and general reduction of our levelized cost of electricity. We aim to further increase our market share in O&M segment by identifying profitable opportunities through global customer mapping. We are also leveraging our strong partnership with global IPPs. I will present you with the best opportunity. With the increase in clean energy capacity in the grid and its subsequent decarbonization, ramping up energy storage has become critical and extreme necessity. Moving forward, on a global scale, a 20 times growth is estimated in energy storage by 2030, and till 2040, a 60 times growth has been projected compared to 34 gigawatt of energy storage currently available. According to Vision 2030 report of India Energy Storage Alliance, at least 160 gigawatt hour of energy storage will be needed by India by 2030 to integrate a targeted 500 gigawatt of non-fossil fuel energy based on its analysis of India's energy sector and outlining the requirement of energy storage in the country. We recently entered into a MoU for an EPC project, which includes battery energy storage system for total installed capacity of 455 MWh in Nigeria. We have added team of battery experts, sales and execution team to capture this market opportunity, and we have built pipeline of 1.4 GWh across US, Australia, US and LATAM. We see pretty robust growth in this market and with RTC tenders due from Government of India in coming years, we see a robust growth in Indian market as well with respect to battery energy and storage space. With this, I will ask Mr. Bahadur, our CFO, to take you through the order book and consolidated financial highlights. Thank you very much. Thank you, Amit, and good morning, friends. Speaking about the order book, in August 2022, the company emerged as the L1 bidder for the BOS package comprising four blocks of the solar PV plant of NTPC Renewable Energy Limited at Khavda RE Power Park, Rann of Kutch, Gujarat, with an aggregate capacity of 1,570 MW DC. The total bid value, including O&M for three years, aggregated to INR 2,212 crores inclusive of taxes. The contract agreement for the project has been signed between the company and NTPC Renewable Energy in October 2022. In September 2022, the U.S. step-down subsidiary of the company signed a memorandum of understanding with the government of the Federal Republic of Nigeria, along with its consortium partner, Sun Africa, for the development, design, construction and commissioning of solar PV power plants aggregating to 961 MW at 5 different locations in Nigeria, along with battery energy storage system, with total installed capacity of 455 MWh. Financing for these projects is under negotiation between US EXIM, ING and the government of Nigeria. The transaction is expected to consummate by Q4 FY 2023. Here, I would like to add that Sterling and Wilson Group has a strong presence in Africa and has an excellent reputation in Nigeria for successfully executing projects in the power sector. Our unexecuted order book as on September 30th stands at INR 2,654 crore, with nearly 78% domestic EPC, which is executable over the next 12 months. Our order bid pipeline remains robust and we are still awaiting results of approximately 19 gigawatt of bids that are likely to be announced in H2 FY 2023. We are on track to achieve and may exceed our earlier given FY 2022 guidance of $1 billion in new orders other than those of group companies. The prices of modules, commodities and logistic costs, which had hardened due to geopolitical tension in the H1 of the year, have begun to moderate. A lower cost curve is likely to help tendering activity gather momentum, which should help result in more order finalizations in the H2 of FY 2023. I will now take you through the consolidated financials for the half year ended September 30, 2022. Revenue for H1 has been at INR 1,520 crores as compared to INR 2,630 crores in H1 FY 2022. Revenue and margin trajectory in the EPC business is anticipated to normalize from Q1 of FY 2024. O&M constituted 5.4% of total revenue in H1 FY 2023. New site additions to O&M portfolio is likely to start contributing to top line from Q4 FY 2023. Company level, the gross margin remains suppressed primarily on account of international EPC projects. In the U.S., labor costs increased due to shortage of labor supply, and in Australia, labor costs, site and site overheads increased due to loss of productivity on account of extreme weather conditions. Further, there was a translation loss due to adverse movement in exchange rate between the USD and the INR and the AUD-INR compared to March 2022. O&M margins were impacted by projects where O&M costs were incurred. However, revenue recognition has not commenced due to clients delaying final handover. O&M margins were also impacted by non-recurring costs of about INR 10 crore during the quarter. While we anticipate revenue to be recognized on a retrospective basis, we have provided for the costs incurred upfront. Coming to the balance sheet. As on September 30, 2022, the net worth stood at INR 338 crore on a consolidated basis, and cash and cash equivalents stood at approximately INR 428 crore. Our net debt stood at INR 885 crore. We expect net debt to decrease with new order inflows and completion of US and Australia projects. Advance and performance bank guarantees encashed by four customers amounting to INR 588 crore. With one customer, we have signed a final settlement agreement, and the encashed amounts for two projects totaling to INR 350 crore have been refunded by the customer. With respect to the balance two customers whose projects are completed, the company is in discussions with them. As on September 30th, we had negative working capital of INR 272 crore as compared to negative working capital of INR 302 crore as on March 2022. Receivables due for more than one year as at September 30th stood at INR 362 crore compared to INR 261 crore as on June 30th. They comprised related party receivable of INR 30 crore, which is net of INR 175 crore that the company needs to pay back to the related party against advance received for the waste to energy project. 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 their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Abhineet Anand from Emkay Global. Please go ahead. Yeah, thanks for the opportunity. I just wanted to understand on the Nigeria MoU. Can you give some details in terms of the size, in terms of value and our share, given that we have probably bid it with Sun Africa as a partner? Good morning, Abhineet. To start with the Nigeria opportunity, Sun Africa is a very reputed developer. It is developing projects across multiple geographies, including Africa. They are developing projects in Europe. They are developing projects in Africa. In Africa particularly, they're very active in Angola and Nigeria. They have developed a portfolio of five projects in Nigeria in which we are cooperating with them, and has entered into an alliance to develop and carry out EPC activity on those projects. We have signed the MoU with the Ministry of Government of Nigeria for construction of these projects. We are in negotiation to conclude the EPC agreement with them. Any color on the, you know, value, order value, sir? We have given the values to the tune of like we are expecting but still negotiating, but we expect it to be close to $1.5 billion. That itself takes, as Bahadur did mention that, you know, for the current year, we are expected to exceed our earlier guidance of $1 billion of inflows, right? Yeah. That itself you are saying. This $1.5 billion that you are saying is our share? Yeah. INR 1.5 billion is share for both the partners. What's our share in that, sir? Our share, Abhineetv, would be in excess of about 95% of the total value. Rest being on account of development. As Mr. Amit has mentioned, this is still under various stages of negotiation. The range, though, is what is the number that he has mentioned. It takes to the point that really our, you know, guidance looks to be significantly below what we truly might achieve. Obviously, it's in negotiation stage. If I have to just, you know, add here that if we look into a two-year perspective rather than just one year that what guidance we have seen, what could be a realistic number in terms of inflows that one can have? Two-year or three-year, whatever, you know, is suitable to you guys. Yeah. As we are stating in our various conference calls that, you know, domestic market is significantly moving up. We have recently bagged 1.5 gigawatt order from NTPC. The value of that order net of tax will be approximately INR 1,800 crore plus. We have stated that Reliance would be carrying out works of 20 gigawatts, and we expect to get a meaningful pie of that work. That values can be extrapolated from that, expect what kind of inflows can be expected. We are negotiating deal in Nigeria and international and both domestic markets other than these particular projects continue to be robust. We expect that the value, the guidance of $1 billion which was provided earlier, we could be significantly expect to move up and the revenues inflow will grow significantly in next two years. I will need to add further, that would be the kind of target that we are aspiring to work on towards the next 2-3 years. Of course, trying to exceed that as well. Okay, sure. Bahadur, just on the balance sheet side, if you see your last H1, basically, you know, almost our net worth has come down from INR 600 to INR 300 odd because it was a loss that we have incurred. Though we have a bit of cash, do you think there will be a need of some either debt raising or equity infusion that will be needed this year, given that, you know, inflows will probably happen in H2, so revenues will probably start kicking in Q1 2024? There would be some amount of funding that would be required to complete the existing projects. The company is also internally having discussions in terms of the network. We will be able to provide guidance on what exactly needs to be done by the time we have the call for the next quarter. There will be a certain increase which will happen right now in the funding requirement, which the company has more or less tied up with to close the existing projects. Okay, last one from me. You know, Amit did talk about the battery storage part, right? India is still in the nascent stage, and there is a lot of growth opportunity that people feel are there. If you can highlight from your international experience, as to the pricing, what's in the other parts of the world and what pricing that India is currently having and what can. So per unit, how will the battery, you know, power look like if we use battery storage today in India? And globally, what's happening right in the pricing front? As far as the battery pricing is concerned, the major battery supply still will continuously be from international markets. As far as that, the major part of the cost comes from the battery supply part. But the EPC portion or the construction portion constitutes only 15%-20% of that part. The cost of that continues to be $250 per kWh. For the battery supply portion and total EPC part is around $300 per kWh. The per unit rate depends upon the usage, what kind of usage and what kind of RTC requirements client have or what kind of grid requirement it would be used for. It's extremely variable, and various multiple business models are evolving in the West, and same will be emulated in India. The per unit cost of stored electricity or from the best models. Will be varied as per the use and the customer requirements. Okay, sir. Thanks, for the answer, and I will get back in the queue. Thank you. Thank you. Thank you. Next question is from the line of Faisal Hawa from H.G. Hawa and Company. Please go ahead. Sir, this Nigeria order, as well as the new NTPC order, what are the kind of, you know, estimations you have made for the gross margin in these two projects? If at all you could also mention what the ultimate EBITDA will be from these projects. My second question is that, you know, we are now going for a multi-country, you know, execution. Just also in the case of Nigeria, there are almost like three counterparties involved, the government of Nigeria, then Sun Africa and also US EXIM. You know, we have these various countries that we operate in, and so that there are various vagaries like, you know, you just said that U.S., the entire coastal region, Australia, there are some problems of rain. Mathematically, how will we see to it that, you know, Sterling & Wilson is not affected due to this? Because, you know, one project failing and our EBITDA margins don't really, you know, allow for any kind of deviation. You know, there are so many factors which are just beyond our control. How will we do it? You know, because this is like, you know, multi-country, and then there are multi-risks. I'll start out, Mr. Hawa, and then maybe Amit can pitch in a little later. I'll try and answer all your questions one by one. See, I wouldn't want to go down to project-level margins and say what kind of margins we are obtaining in Nigeria or what kind of margins are there in NTPC. Suffice to say, it would be close to what we have been historically doing in a range, and that's what we are aspiring to do. That is to answer your first question. Second, as far as, you know, the unseasonalities of rain that have happened, as well as, in Australia, as well as labor costs, which have gone up, the company has now strengthened its risk matrices. We earlier used to also take this into account. In the case of Nigeria, as well as in the case of NTPC, most of it is subcontracting. It is not something that is going to be self-performed. Therefore, all those risks we would, as an organization, also pass on to the subcontractors. As far as pricing is concerned, yes, while there would be pricing which is there even for modules in the case of the Nigeria job, the NTPC job is without modules. There are firm commitments which are being taken from vendors, having learned from all our experiences in the past to ensure that there is no slippage of margins. When we talk of margins, Mr. Hawa, we always talk of gross margin because for us, the overheads are basically a total cost across the various entities of this organization. We don't look at EBITDA-level margins for projects. That would be at an organizational level. That number is in the range of INR 400-450 crores. As your turnover increases, which you can see from the order book, your operating leverage is obviously going to kick in, which gives you a greater EBITDA margin. We will, of course, need to be more careful in Australia and U.S. We will be more selective and risk-averse in these geographies, though historically in India and Africa, we have always made good margins, even in the toughest of times. As far as the Nigeria job is concerned, it is funded through US EXIM, or it is proposed to be funded through US EXIM, and most of the suppliers would be US suppliers. Contracts there are extremely strong. US EXIM has already done funding of a similar project in Angola of a very large size. If I have missed anything, Mr. Hawa, please just remind me, and Amit can pitch in if I have missed anything. Bahadur, you have summarized it wonderfully. You have captured practically all the things. Mr. Hawa, as you say, in multi-geography now, as Bahadur alluded to, the risk matrices are being reviewed, and we are changing our risk profile. Revisiting the contracts and building contingencies around the inclement weather or labor shortages. We are bidding selectively, and we are like taking care of the risk profile we are taking so that the margins remain intact whichever geography we are working in. All the geographies, wherever we are working, we have put in very, very strong teams so that the execution risk is minimum, and we pass on the risk through subcontracting model to other subcontractors. In any of these two contracts, will we have to give some kind of bank guarantees also to, you know, to the counterparties? Yes, of course, Mr. Hawa. Bank guarantees are always part of every contract. At least can you tell me what are the gross margins we have targeted in these two projects? Because that gains very much importance, you know, because we have to, as investors also, you know, get into our calculations various vagaries that will come through in the future, you know. You know, whatever steps we might take, but, you know, these vagaries are such that, you know, many a times even the management cannot budget for them. We have seen in the past that it is not only the solar modules. Many a times, you know, one or two projects have, you know, affected our entire year's performance. I would just like to say this much, Mr. Hawa, that the mix for gross margins for all new jobs would be low double digits%, combining all contracts together. I would not want to go into, you know, discussing project-level margins. At least my project. I mean, what is our realistic target for orders now? You know, because we have already achieved the target for the year. How many more orders will we take so that, you know, we don't go too far into the future where, you know, prediction of raw materials and all may become much more difficult? Or will we just, you know, take all the orders and then just make the counter bookings with the suppliers? I'll start off by saying that most of the orders that we generally take are having a closure period of between 15 months to 2 years. It is not something that we would take and then sit on the order for the next 2-3 years. That's not how the solar business operates. We have presently. While it is an MOU, you can say that we are looking at exceeding our targets. However, that does not mean that we are shutting shop. We are right now involved in bids, as has been mentioned by Amit as well as me, for a very large portfolio across the world. Plus, there are a lot of bids coming in India. India has always been our strength. Our domestic margins continue to be protected. They were shown in March, they are shown in June quarter, as well as in September quarter as part of our investor presentation. It is something that we are aggressively pursuing, so long as our blended margins that we internally have are taken care of. What is our hiring program for engineers for the next 2-3 years? For the next 1 year at least? We have mentioned that, Mr. Hawa that we are looking at increasing our total team size to take care of all of these new jobs. We are already looking at increasing our domestic headcount to about 1,500 from the present headcount that we had in March, about 467. At the same time, there have been some reductions in places like Australia, where jobs are coming to an end. That is to of course be very efficient and lean in terms of our operations. But right now also, we are looking at increasing our headcount for design and engineering by about 195 people, construction 615, project management about 120. You will see that the corporate headcount, the back end is just about 40 people. Because as a back end, we already have enough strength to take care of the projects that we are looking at. Okay. Thank you. The next question is from the line of Siddharth Shah from MK Ventures Capital. Please go ahead. Yeah, thank you for the opportunity. My first question is on the gross margins again. You guided for low double-digit margins. Just wanted to understand the difference between the projects where you have taken with solar modules and the projects where you're not taking with solar modules. If you could just give some bifurcations that we know further whenever we win projects, what kind of gross margins we'll make on those projects. We always get margins even on the modules, though module prices being known to everyone, the profit margin on modules is a little lower as compared to if you were to take a BOS margin. When we are giving you this number of low double-digit, it is considering a blend. Though if you were to look at it purely from a BOS perspective, it would be maybe a slight higher number as compared to the one-bit modules. Sure. The captive projects, I mean the Reliance projects, wherever, whenever you win, those projects will be also a similar margins? A low volume. We hope and expect that they will be, because both parties have to come to a conclusion on what the margins will be. Yes, that's our aspiration. Great. Also, second question is on the order book now. As of now, 12th October, we have order book. Just to add that both NTPC as well as Reliance will be all BOS. There are no modules in that. Sorry, I missed saying that before. Yeah. That will be a little bit higher margins from just percentage terms. Yeah. We will try to upgrade our margins. Okay. The current order book as of now, which is booked as INR 2,600 crores. Out of this, how much is the legacy orders where there will be still some losses there? What can be the extent of these losses which will prove or close to all in the next two quarters? Let me put it in a little bit of perspective. Out of the order book that we have, we have roughly INR 550-600 crores of the legacy orders, where there is no loss, but there is no profit either. They are at more or less a break-even because we always account for all the losses up to a point in time. To give you a perspective of this INR 500-600 crores, it is only about 6%-7% of the total order values of all of these legacy orders. Today we are at the fag end of all of this. We are hopeful of closing. At the time of closure, we don't expect any major liabilities to arise at the end of these projects. Participants, please stay connected. Line for the management dropped. Participants, please stay connected while we return the management back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, please go ahead. Yeah, sir, are you suggesting that we'll not have any further P&L losses or cash outflow on the legacy orders from now or we are mostly provided for all the losses? Losses we have accounted for whatever we had to, and wherever we had any subjectivity, we have given that in the notes to the financials. As far as cash outflow is concerned, yes, we would require to do a certain incremental borrowing to complete those existing projects. Right now we have done borrowings of about INR 700 crores, of which we have about INR 400 crores lying as a cash and bank balance. Over and above that, there will still be a requirement, because one is accounting for the loss and second is paying for those payables to complete the projects. We will be doing that, part of our borrowing plan, most of it which is already tied up with participating banks. sir, how much is the cash outflow which will happen on these legacy projects going forward? I mean, a broad range if you can, share the estimate. That figure would be in the range of a further INR 300-400 crores over and above the bank balance that we have. This is after the indemnity agreement which we had with the, sorry. It is after the indemnity claim for crystallized items as on thirtieth of September 2022. Okay. Broadly, the last question from my side. Broadly we have, say, INR 885 crore of net debt and the customer advances of say INR 300 crore, negative working capital of INR 300 crore. We are in a way around INR 200 crore of borrowing. Further INR 300 crore is INR 300 crore-INR 400 crore is the maximum liability which can arise. By the end of this year, when we are done with all the legacy projects, we can have INR 1,500 crore of liability, if we exclude the customer advances. Is that broadly correct, sir? Yeah, but it also depends on the advances which we will get from the new jobs that we are working on right now, which will go to reduce that. You are looking at it at a gross level. There will always be customer advances from the jobs which will go to bring it down. Understood, sir. Great. Thank you. Thanks for the clarification. Thank you. Thank you. The next question is from the line of Anupam Goswami from B&K Securities. Please go ahead. Hello, sir. Sir, my first question is on the NTPC order. Anupam, it's in tough hearing mode. Hello? Hello. Yeah. Hello. Sir, my first question is on the NTPC order that we have received. What I was checking, it was about 1.2 per megawatt order. Is it like full EPC contract? Because that's a bit low in my understanding. If you can throw some light on it. Could you just repeat your question one time, please? I missed. Yeah, sure. Yeah. The NTPC order of INR 2,200 crore for 1,600 MW, so it's coming about INR 1.3 per MW. Is it the whole EPC contract that we understand or there is some any clause or conditions in that partially, if it is there anything? INR 2,200 crores for 1.5 gigawatt includes O&M for three years and includes the taxes. If you take that out, the value comes, if you exclude all of this out, the value comes closer to about 1.2 per megawatt, INR 1.2 crores per megawatt, which is the average BoS price. It is not a full EPC contract. If one were to do EPC, it would be upwards of INR 3 crores a megawatt. Right. Okay. This is a BOS. Yes, please. Okay. I understand, sir. Sir, how much margin are we, you know, commanding on BOS supply? I already answered that question a little before, that I don't want to go to project-level margins, but on an average, it is low double-digit that we work towards. Okay. Sir, my last question on the kind of module prices we have. Our EPC contracts domestic, if we say, what kind of margins do we see going forward? Do we see any challenges in that to sustain the margins? Modules does not have for us an impact as far as domestic is concerned because almost all our orders in the domestic front are without modules. The margin profile that I gave you includes what we do in India as well. Okay. Sir, where are we sourcing mostly for our equipment and modules? Modules worldwide would obviously have China as a great factor. As far as the job that we are working on in Nigeria, since it is US EXIM funded, we assume that US EXIM will have a great role to play in determining who are the major vendors for that particular job. Okay, sir. Okay, sir. I understand. I'll join back in the queue. Thank you. Thank you. Thank you. The next question is from the line of Manoj from Geometric Wealth Advisors. Please go ahead. Congratulations, sir, on winning a lot of orders and leading the company on the order front. My first question is, let's assume going forward two, three years when the company balance sheet is more strong. Hypothetically, if you're getting INR 30,000 crore of orders in a particular year. Is there any capacity constraint in terms of labor or in terms of sourcing, how to think of in terms of capacity of taking orders? And similarly, how much, like we are taking orders around $1.5 billion this year, hypothetically. Okay. Yeah, the project schedule is 13-24 months. How much we can execute in a particular year? Can you take an NTPC example in that? It will be very helpful. Thank you. Yeah. As we explained earlier during the call that, we are increasing our capacity, we are increasing our bandwidth to address the increased market size. This year itself, we are adding people in excess of more than 1,000 people. We are expanding our engineering, procurement and project execution team to address the increased market size and the increased order book for which we anticipate. Anytime we are negotiating any particular order book, we have some time in hand, and we have a clear visibility in which quarters we are going to book and what would the execution plan look like. We start working in advance and start adding capacity. Like NTPC, we have time of like execution time is 18 months, and we have sufficient bandwidth to execute that order in that particular time frame. If you see historically, we have achieved a turnover of in excess of INR 8,500 crore in a particular year. If you address that, we can easily handle a turnover of INR 10,000 crore-INR 12,000 crore without much increase in our overhead, and we have that bandwidth. We are very, very well placed to handle any increase in the order book, and we are very well placed for that. Our organization expansion plans based on anticipated order books are well in place. Okay, thank you. Let me take a summary of that. For having more order, we need more employees for that means a major part, you are saying. No. We have a right size, like, we need the employee for execution, but our back end for the management teams are in place. Wherever we need, like, most of the work will be carried out through subcontractors and wherever we need to execute in-house. We are very well positioned for that expansion, and we are expanding our engineering team. We'll be able to cater to that, but it will not lead to any significant increase in overheads. I understand. Now coming back to my question, I mean, looks like we are going through a lot of orders from our Reliance Group also, and we are bidding more areas, and there is a long tailwind also in this sector. If that kind of orders we want, if we are getting INR 25,000- 30,000 crore, we can increase our capacity to for that. Is it possible for organizational scaling? Absolutely, it is possible to expand the capacity to that. It is absolutely possible, and we are working towards that. If we foresee that kind of order booking is happening, so that will be addressed accordingly. Okay, great. My second question is, for the time being, we can take a fixed recurring order at cost as INR 400 crore. Is it my right assumption? Between INR 400- 450 crores over the next 2-3 years, considering inflation or some little addition to back end, is the kind of range that we are working towards. Okay. My last question is, regarding this, raw material. How much still we are fragile or dependent on the China thing? Is this situation improving? What do you see going forward with a lot of capacities being putting in India? Thank you. Yeah. Can you repeat yourself again? Once again, what's the question? Okay. My question is, in terms of procuring raw material, how much dependency does still solar industry have on China? How much it is do you think going forward in two, three years it can be reduced as lot of people are putting capacity, in India and outside also? As far as the module sourcing is concerned, at this point of time, there is a major dependence on China because China has controlled most of the capacity of solar modules. But as you yourself has said, there's lot of capacity addition is happening not only in India but most of the other parts of the world. I see lot of capacities coming online in next couple of years in India and other parts of the world which would significantly reduce dependency on China. We'll be able to source the modules and all other materials from either India or multiple other markets. Okay. Thank you. I will join back in the queue for questions. Thank you. Next question is on line of Shantanu Mantri from Think Investments. Please go ahead. Yeah. Hi. Thanks for the opportunity. I have two questions. First is you know with a broader perspective. Shantanu, sorry to interrupt you. Yeah. Your voice is breaking. May I request you to come in a better reception area, please? Yeah. Is it fine now? Yes. Thank you. My first question is that, you know, last couple of years, our projects in Australia, U.S., you know, we faced huge losses, and now we're coming to kind of back end of all those orders. The quantum of these losses, you know, were massive. Like, we've just eroded almost our entire net worth. Having said that, now we stand at a point where, you know, we have these big orders coming in from Nigeria, and we have the whole Indian domestic story. My coming on to my question is that, you know, what are the few big risks you see, you know, in this Nigerian order, you know, that can, you know, affect us? What is the comfort you have that, you know, whatever we've seen in the past will not repeat again? If you can just share like how we've changed on our, you know, risk analysis will be really helpful. As you have started the question with U.S. and Australia, I would like to point out that the last two years were exceptional. Right for the whole world because of the pandemic, the breakdown of the entire supply chain and the re-entry restriction in those two geographies where we could not supplement the teams with expertise and workers. They were very, very different circumstances. We are over that particular part of the order book, which is the second, and we can see projects are about to be over. As you are aware, we have a strong presence in Africa, and we have executed projects successfully in more than ten countries in Africa. We already have a huge presence in Nigeria. Our group companies have carried out projects in Nigeria. Sterling and Wilson Solar has already executed on a smaller scale four projects in Nigeria. As far as the African and Nigerian execution piece is concerned, we are very, very confident and we are one of the most successful contractors in Africa. Now, coming back to the supply part, this job, the Nigeria job, is funded by EXIM Bank of the U.S., and most of the suppliers are going to be from U.S. or the allied countries. The enforceability of the contract in those geographies is very, very high. Like it's not the kind of problem which we faced in Australia, that the suppliers reneged on their contract. That is not going to happen on the Nigerian contract. As far as the further execution with our execution experience in Nigeria, most of the jobs, construction jobs will be subcontracted and risk sharing will be done with the subcontractors. I feel that as far as the Nigerian piece is concerned, we are very well protected and we have ring-fenced our risk to most of the extent on our Nigerian projects. Got it. Okay. That's really helpful. My second question is more on you know, our balance sheet, particularly our debt. I see right now we have around some INR 850-880 odd crores of net debt. I believe that you know, this will increase by another INR 300 crores by end of March. We'll be around somewhere around. This is excluding any advances from the NTPC order. I don't want to you know, get into those advances, but on a pure you know, legacy order whatever we've executed, we'll end up somewhere around INR 1,100 or INR 1,200 odd crores of net debt. Now, just if we take this number, I wanted to understand, based on the indemnity agreement, what would be the total number, that either our, you know, third parties who have to pay us, or in case, it comes up on the promoters, what would be the total number, that, you know, we can expect? Obviously, this will happen when the liability materializes, but I just wanted to know that what would be the inflow to the company that will knock off, you know, against this INR 1,200-odd crore net debt, say, probably in the next 12-15 months. If you can just give some color on that. Yeah. I'll try to answer that question. The total indemnity inflows which would come in either from the promoters or the customers. Right The authorities would be approximately INR 600-650 crores on account of liquidated damages. Right. Perhaps about another INR 300-400 crore on other items, including things like receivables or if you have any of your inputs stuck with the authorities. We're talking of a ballpark number of items covered in the indemnity to be between about INR 1,000-1,200 crore. Okay. The timeline for this could be in the next 12-15 months or much earlier? No, it can't be, because we have to raise indemnity claims only once in a year. Okay. After considering the INR 300 crores, which are to be borne by the company. Uh-huh The company has already raised an indemnity claim for 30th September 2022. The earliest we can raise the next claim, and the number that I'm talking about is not what is included in the present claim, is only going to be September 2023. Okay It will definitely not be all fructified in 15 months. Okay. It can be something fructified in 12 months, 24 months, or if there are legal cases, then it may take longer to fructify as well. Okay. Maybe the timelines would be different, but on a number-to-number basis, we have almost 1,000-odd INR crore that should eventually come into the company. Whatever debt we have generated now- INR 10,000-12,000 crores. Yeah. Okay. A pretty significant portion may come in, not just from the promoters, but even from the customers with whom we will finalize our LD settlement. Right over the next twelve months. Any realistic number you would want to give us for next September 2023, or maybe not a realistic but a conservative number that, you know, this should definitely come in by September 2023. If it was already crystallized, I would have already taken it in my September 2022 claim. Right. Right. Right. I don't want to put out any kind of number, conservative, realistic, pessimistic. I've given you what is the overall number. We are all striving to see that we recover everything as fast as we can, not necessarily from the promoters, but even from the customers or the authorities, wherever it is stuck. Right. Okay. That's it from my end. Thank you so much. Thank you. Thank you. I now hand the conference over to Mr. Amit Jain for closing comments. Thank you. With the robust backing of Reliance Group and Shapoorji Pallonji Group, we endeavor to accelerate our growth trajectory by aggressively pursuing large markets globally, where we foresee a huge potential of growth. India too has reached an inflection point from where we anticipate the growth of solar power industry to garner further pace and momentum. With our deep-rooted client relationships, global presence, ability to provide customized solutions, strong track record of executing complex and large scale projects supported by robust balance sheet and the 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 Sandeep Thomas Mathew, our Strategic Growth Advisor, our Investor Relationship Advisors. Thank you once again and have a great day. Thank you. Thank you very much. Thank you. On behalf of Sterling and Wilson Renewable Energy Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.