Ladies and gentlemen, good day, and welcome to the Tata Power Q1 FY23 earnings conference call. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Praveer Sinha, CEO and MD from Tata Power. Thank you, and over to you, sir. Thanks, Ryan. Good evening to everyone, and thanks for joining the call. I hope all of you are doing fine and taking care of yourselves. I'm joined today, in the call by my colleague, Sanjeev Churiwala, CFO, Mr. Junesh Patel, Financial Controller, Kasturi Soundararajan from the investor relations, and a few other members from our finance team. We are meeting you after a quarter that has seen significant development in many ways for the energy industry and as also for Tata Power. We have seen in last few months unprecedented rise in coal prices accompanied with demand, which has led to short-term power prices going up. At the same time, initiatives like Green Open Access and increased trajectory of RPO by 2030 to 47% will further help in the implementation of renewable projects in the country. Tata Power has also completed another remarkable quarter with significant progress on various of its strategic initiatives. Besides a very strong operational performance in all its businesses, we have progressed significantly on the renewable transaction in last two months. The CCI approval for this transaction has been received just today evening, and we expect to receive the first tranche of INR 2,000 crore in next few weeks. On the Mundra front, we have been operating the asset under Section 11, which was passed by Ministry of Power, under which a pass-through mechanism has been provided. At the same time, we have been working with the procurers, especially the Gujarat procurers, to finalize the long-term arrangement with them. The merger of CGPL with Tata Power has been completed last quarter, with effect from April 1, 2020, which provides us significant operational synergies to our group. This quarter we saw steady operational performance from all our assets in generation, transmission, as well as renewable business and very high profit from our coal mines due to higher coal prices. We achieved nearly 90% growth in reported PAT, which stands at INR 884 crores as compared to INR 466 crores in the previous year quarter. This is now the 11th consecutive quarter of delivery year-on-year profit growth and is expected to continue in the future too. We saw a robust year-on-year growth of 48% in revenue, which stood at INR 14,776 crores this quarter. We saw a reported EBITDA for this quarter at a steady INR 2,107 crores compared to 2,365 crores in the previous year, which had a one-off impact of INR 302 crores due to the tariff order that we have received in Mundra. Our renewable business delivered strong execution in the last quarter as Tata Power Solar commissioned 600 MW of AC solar capacity, including India's largest floating solar power project in Kerala backwaters. With the wins of one point seven GW in this quarter, TPSSL has now 1.3 GW of owned projects and 2.3 GW of external orders aggregating 3.6 GW of total large scale EPC contract worth nearly INR 15,000 crores, which has to be completed in next twelve to eighteen months. Due to higher commodity prices, including solar cells and modules and foreign exchange movements, we saw a hit in profitability of the EPC business, but expect that the margins will improve in coming quarters with newer orders and also with some contract manufacturing which has been tied up to be done in India. We have also signed an MOU with Tamil Nadu government to invest approximately INR 3,000 crore for setting up a greenfield 4 GW solar cell and 4 GW solar module manufacturing plant. This is coming up in Tirunelveli district of Tamil Nadu, and the work is expected to start in next one month's time. The manufacturing plant will help us in supporting the nation's aspiration to create a comprehensive ecosystem for solar manufacturing and fulfilling the needs of the solar projects as also helping us to improve our margins and having a better control on the cost of solar cells and modules. The first phase of the plant of solar modules is expected to be commissioned by June next year, and the second phase of cells will get commissioned by November next year. Tata Power's New Age business has also delivered promising results in this quarter, as we achieved 4x and 2x growth, respectively, in rooftop solar and solar pumps business in terms of revenue over Q1 of last year. Margins in rooftop solar has tightened because of the commodity prices and the currency fluctuation. With the new strategic initiatives, we foresee improvements in the coming quarters. Similarly, Tata Power EZ Charge is also getting a lot of traction in the market space, where we continue to enter new partnerships to create green mobility infrastructure in India. We now have more than 240 E-bus charging points and around 2,400 public EV charging points across 437 cities, which is the largest EV network in the country. We have also signed MOUs with OEMs to enter into strategic partnerships to facilitate a robust EV charging network and accelerate the adoption of EVs across the country. We have also entered an MOU with MahaIT to set up around 5,000 charging stations across new construction project sites in Maharashtra. This quarter, we operated three units of Mundra under Section 11 dispensation since 6th May, which allows us a full pass-through of the coal costs. This modification is valid till October 2022, with an opportunity for extension and with no under-recovery in Mundra. In parallel, our discussions with Gujarat on the supplementary PPAs to implement the compensatory tariff is also underway, and that will pave the way for a permanent resolution of the Mundra issue. With the recent phenomena of power shortages and restart of thermal capacity, we are confident that this arrangement will be converted into a long-term arrangement which will provide stable power to the five beneficiary states. The continuous effort to bring focused operations leveraging on our experiences from Mumbai and Delhi and investment across the four Odisha discoms is leading to continuous improvement in their operational and financial performance. The technical losses have reduced by nearly 1%-3% across these discoms, while AT&C losses have reduced by 4%-9% compared to Q1 of last year, which is a significant achievement in just last one year. Moving to the balance sheet, the net debt level inched up a little in line with our earlier guidance on growth CapEx. Net debt at the end of Q1 is around INR 42,000 crore, with CapEx of more than INR 2,000 crore incurred during the quarter, mainly in our renewables business and Odisha discoms. However, the healthy growth in the operational profit from the businesses have helped us to improve our debt to underlying EBITDA further from 3.9 in the last quarter, Q4 of FY 2022, to 3.6 in this quarter. Due to increase in debt, our net debt to equity stands little higher at 1.55 times compared to 1.53 times in the previous quarters. We believe with the type of aspirations that we have to grow businesses, we'll be able to maintain a very healthy debt-to-equity ratio. The beginning of FY 2023 has also been very promising for our transmission business, with our Resurgent Power platform securing the NCLT approval for takeover of South East UP Power Transmission Company Limited, which is developing an intrastate transmission line in UP of approximately 1,500 kilometers, along with five 400 KV substations. This is after we recently took over another transmission asset, which is the NRSS XXXVI Transmission, again, through the Resurgent Power platform. These two asset acquisitions together have a combined EV of around INR 6,500 crores and an annual revenue of around INR 900 crores once they are fully implemented. We are actively participating in competitive bidding for transmission projects, which is an important part of our growth in the future. Lastly, we thank all our analysts and investors for their support in the Institutional Investor All-Asia (ex-Japan) Executive Team 2022 poll. With your support, we have been able to once again secure top rankings in several categories, including the best IR program and ESG disclosure outside mainland China. Tata Power continues to steadily move towards its long-term aspiration built on businesses of the future while maintaining a healthy balance sheet. Quarter-on-quarter improvements can be seen in all our operational and financial metrics, and the trend will be visible in future too. We look forward to your continued support in this journey. With this, I'll hand over the call back to Ryan for the question and answer session. Thank you. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to 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. Our first question is from the line of Rahul Modi with ICICI Securities. Please go ahead. Good evening, sir, and congratulations. Good set of numbers. Just a couple of questions that I had. You know, on the two EPC segments that we are seeing actually, we've seen a big loss being booked in Tata Projects. Last year we did a full year loss of around INR 200+ crores, and since then we've actually reported on a quarterly basis. How much do you see the pain coming in, or most is done on the projects part? Secondly, on a similar question on the solar EPC. Do you see in the older order books you know, any provisions that need to be taken further which can impact margins? Though you've mentioned that you know, it should improve going forward. Any thoughts on that, please? Thank you. Rahul, thanks for the question. As far as Tata Projects is concerned, last quarter we had booked a certain amount of loss. The whole process was that we were identifying projects as to what is the cost to completion, and if there is any more provisioning that has to be done. We did in last quarter, and we have done in this quarter, so that going forward we do not have to carry any burden of future write-offs that we need to do. We expect that this is the end of the write-offs that we need to do and provisioning that we have to do. Going forward, they will be making all profits. Similarly in the renewable EPC projects, we have not a very large loss. It's some of the, you know, projects which were in the last stages of implementation where we had procured these in last year, and the prices were on the higher side. We were expecting that we will have a small hit. The only uncertain thing that happened was that we also had a Forex hit in the quarter because of the fluctuation in the dollar rates. We expect that now that we are fully hedged, and we will not have an open position, we will be in a much better position to take care of it in future. sir, now we are hedging, all our exposures back to back, is it 100%? Yeah, we are now doing that. We had earlier left some open space because the fluctuation was not so much. Now we have done 100% hedging. Sure. Sir, in terms of the contract manufacturing which you mentioned that we are doing domestically for the modules, so how much capacity have we tied up? Sir, in terms of the price variations in that, sir, how are we better placed versus, you know, the imports that we do for the pricing that we are getting? What happens is, we tied up with a couple of manufacturers over here. As you know that the customs duty for cell is 25%, while for module it's 30%. We have 15% arbitrage as far as, if we get it manufactured in India in terms of the customs duty. We have a very competitive terms under which we have tied up. We do feel that we will be able to take care of our future requirements, especially where we have domestic component, in terms of manufacturing, to meet our future supplies. Sir, so this contracting would be only for the next, probably 12-15 months till your own capacity comes up? No, it will be little longer than that, because the capacity that we will have will take some time to stabilize. Secondly, it's not that all the capacity that we have going forward we will use 100%. There would still be some spillover which we will take from the contract manufacturers. Right. You expect on a full-year basis and, you know, the year to come, our solar EPC margins will actually make a comeback and will be a little more steady versus what we've seen in the last 12-18 months? Yeah, it will definitely be much better. Once we have our own manufacturing over here, we will definitely be able to improve drastically. Also, lot of these changes have happened very quickly in last one year. The notification for change of customs duty came on March 3, 2021. There were certain projects which were in the pipeline, which we have already bid for. Going forward, we have now bid all projects where we have considered the impact of customs duty. Hopefully, we'll have much better margins as we move forward. Right. Perfect, sir. That's very helpful. Just last question I'll just slip in. Sir, our receivables have gone up almost by 40%-50%. So any cause of worry what's led to this? If you can just elaborate. Thank you very much. Our receivables have gone up because of three reasons. First is that we have been over a period of time not received some old payments which we are supposed to get from Agra and Tamil Nadu and all that. Now that the court order has come and they have been asked to make that payment, we should be able to get that. Secondly, during the month of March, we had imported large quantum of solar modules to avoid buying it from April when the BCD had come in. That is getting liquidated and that benefit will come in this quarter. Lastly, we have also been buying large quantity of coal from Mundra, and because of the higher prices of coal, there has been little stress on our cash flow. Again, this will get addressed in this quarter. Thank you, sir. I'll come back in the queue. Thank you very much. Thank you. Our next question comes from the line of Swarnim M. with Edelweiss. Please go ahead. Yeah. Hi, sir. Good evening, and thanks for the opportunity. Sir, my first question is again on Tata Projects. You did tell us that there were losses, but just wanted to better understand that commodity inflation, of course, is a possible reason, but we have not really seen any other large EPC companies reporting losses at least. What's happening? Is it? Is there some sort of kitchen sink before the possible IPO? No. This is a routine business, and in that, the board and the audit committee always examines that what sort of provisioning we need to do, especially when we know that the cost to completion will be on higher side. That's a standard way of accounting, and that has been done in this quarter. Secondly, the increase in commodity prices have been there for all companies. All of the companies which have been in construction business, infrastructure companies have seen this sort of trend in last one year. Fortunately now the commodity prices are coming down, and we will take the benefit of this going forward. Our ability to now forecast and adjust this is much better, and hopefully we will not have impact in the future quarters. Okay. Got it. Secondly, on this Mundra, if you can just elaborate what exactly is the arrangement that we are continuing under Section 11. You mentioned that the extension is available up to October 2022. Is that right? Under Section 11, the requirement is that the generator will generate and offer the power to the procurers, and they will be fully compensated for the cost of generation. We expect that whatever is the actual costs that will be incurred in producing power will be passed through. This arrangement, of course, is up to 31st October, but it may get extended. We have been told to be ready in case it gets extended to supply power because there has been lot of huge increase in demand in last few months. If the same trend continues, then we might have to continue the operation under Section 11. Okay. That would imply no operating losses per se for whatever you are operating. Yes. Going forward, if it continues under Section 11, there will not be any operating loss. Okay. Sir, at the moment we are operating about three units, whereas the other two units are still not getting operated. Would there be penal consequences over there, for, you know, a lower PLF? We are offering on a daily basis full declared capacity. That means all the five units, 3,800 MW is being offered. Then, the scheduling is being done by the DISCOM. We are ready to operate all five, and we will get paid the fixed costs for operating all five units. Okay. Got it. Thank you so much, sir. I'll get back in queue for more questions. Thanks. Thank you. Our next question comes from the line of Sumit Kishore with Axis Capital. Please go ahead. Good evening, thanks for taking my questions. The first one on CGPL. Could you, because there's no slides this time, because it has been amalgamated in the standalone entity. Would like to understand here what was the under recovery for CGPL in the June quarter. Given Section 11 was implemented early May, you know, since then, what has been the under recovery? Have there been even capacity charge under recovery because a couple of units were not available? Sumit, the Section 11 came from 5th May. Before that, there has been an under-recovery, and the details, our team will share with you. The under-recovery has been from first April to fifth May. Thereafter, there should not be any under-recovery. We are, of course, before the CERC and the order is expected in next few weeks. The details can be shared with you by Rahul and team. Understand. For the full quarter, you have been sharing a figure on fuel cost under-recovery. What has it been for the full quarter, and after Section 11 implementation, has the negotiated tariffs been cost reflective? Can you confirm that there has been zero under-recovery post fifth of May? Fifth of May onwards, the tariff has to be determined by the regulator. An interim tariff was given by Ministry of Power, based on which we have done the billing for last two months. However, the petition is now before CERC, and we still have to hear from them as to what will be the final tariff that they will approve. Once the details, the order comes in next few weeks, we'll be able to share that. Our understanding is that these are cost reflective tariffs that they will fix, because Section 11, it's a compulsory generation that has been done. Hopefully there should not be any under-recovery from sixth onwards. Understood. Was the interim tariff cost reflective? If not, have you accounted for the difference as a receivable in this quarter for post fifth of May? The interim tariff that has been given. It has been given only for four weeks. For the first two weeks it was cost reflective. For the next two, it was not cost reflective. The full details have been furnished to CERC, and they are examining things. Concept-wise, it has to be cost reflective. That's what is important. Okay. After the supplementary PPA arrangement gets implemented, hopefully sometime in future, with that, what more detail too? That is still under discussion, so it's little premature to say. A lot of arrangements are being discussed in under that. Let's wait for some more time before we are able to clearly spell out what will be our arrangement. Sure. You also not published your slide, customary slide on Indonesian coal this time. Could you please speak about the average HBA coal sold, the net revenue after royalty and the net profit per ton? This was a particularly sweet quarter for the stake in Indonesian coal mines. You know, we'd like to understand the dynamics here. Yeah. Sure. After, Rahul will share the details with you. As you know that there has been changes in Indonesia also in terms of the royalty rates and the corporate tax and all. While the license was renewed from January 1, many of these have been notified in later part of May and June. Hence, the details are still under calculation, and the Indonesian government is still working out the arrangement in terms of what sort of taxes, royalty and other sharing of profit has to be done in that. Whatever details we have, we will share with you. It is still little interim, and finality has not come to it. Yeah. Quick follow-up on Tata Projects. We were reading earlier that there was a rights issue that was planned by Tata Projects, to which all stakeholders, including Tata Power, would have to subscribe compulsorily. What is the status of that rights issue? There is no plan immediately like that. Once we take a decision on that, we will share that information. At this stage, there's no decision about anything like that. Sure. My final question on Tata Power solar PPC business. Where you had mentioned in the last quarterly conference call that the Q4 margins factored in provisioning for elevated module and commodity prices for the existing order book. You know, I understand that there has been a FX impact as well. Could you speak about, you know, the margin profile of the order backlog now that all these things are behind us? And what does this business mean for you on a ROE, ROCE perspective? Given your overall goals under Tata Power 2.0, is this eventually going to be supportive of profitability or is it just going to be a drag? Thank you. Absolutely. These have to support and it has to become profitable. All these businesses that we are doing have to stand on its own and on the merit of it being profitable. The details can be shared again by Rahul. I think he's already shared some of the details. He can provide you any specific information you require on Tata Power Solar. All these projects have an arrangement on a back-to-back basis in terms of procurement of the cells and modules. Similarly, we have now done 100% hedging of the currency. Going forward, we don't expect too much of swing in terms of the profitability of the power house. Thank you so much for answering my questions and wish you all the best. Thank you. Thank you. Our next question comes from the line of Mohit Kumar with DAM Capital. Please go ahead. Yeah. Good evening, sir. Congratulations on good set of numbers. My first question is on the Mundra. As I understand, the Government of Gujarat has passed a resolution under cabinet which allows the complete pass-through, and one of the competitors has got the PPA approved from CERC. Are we working on a similar kind of resolution? Is my understanding correct? How long do you think, you know, the long-term resolution will take? The arrangement with us is a little different than with the other suppliers of power in Gujarat. Ours is being arranged on a very different basis. However, the fundamental thing that is being agreed is that the coal cost has to be a pass-through because the way the coal costs have gone up in last one year. The pass-through arrangement has to be agreed. There are certain other aspects which are there, which needs to be negotiated and finalized between both the parties, and we are still in that discussion with them. It's little premature, but conceptually, the coal cost, whatever is there, it will not get restricted to a certain HBA level, but it will be a full cost. Sir, as far as the interim tariff is concerned, are we to expect the fixed charges which you had bid to get recovered under Section 11? Beg your pardon. Fixed charges under Section 11. Yeah. The concept of Section 11 is that all costs have to be given. Whether it is fixed cost or variable cost, there cannot be any deduction. In fact, there has to be a certain profit margin also which has to be given. That is agreed legal position based on the earlier order. We are expecting that when CERC decides on it will consider this aspect while determining the tariff. Lastly, sir, has there been any write-off in the coal mine in this quarter for the Q4 FY 2022, given the changes in Indonesian regulation? No, there is no write-off in the coal mines. There has been no write-off in the coal mines. Mm-hmm. No, I'm just asking, has the last quarter profits of the coal mines been restated or something? No. No. Nothing has changed. Understood, sir. Thank you and all the best, sir. Thank you. Thank you. Our next question is from the line of Puneet with HSBC. Please go ahead. Yes. Thank you so much. Then congrats on. My first question was again, you know, clarification on the Mundra side. Is the understanding correct that under the Section 11 you would also be making sort of profits out of Mundra and not just be EBITDA neutral? Concept-wise, that is what is the principle on which the Section 11 tariff is determined. Now, the matter is before CERC, so let us wait to hear from them as to what they will apply under the present context. Is CERC also considering the profits from your Indonesian mine while calculating this, or is that separate from the discussion? That is separate. That has nothing to do with the operations of Mundra. Okay. Understood. My second question is, you know, on your Odisha DISCOMs, so while year-on-year we've seen, you know, AT&C losses go down, but on quarter-on-quarter they are up. Is there some seasonality that one needs to read into this? The losses, if you compare it to last year's Q1, has gone down. Yeah. That is the trend that we are seeing over there. 1Q. 4Q is up. that we have taken. We expect that this trend will continue in future. No. No, but 1Q over 4Q is up. For example, Yeah. is 35.7% versus 29% the fourth quarter. That happens because of the seasonality. What happens in the summer months, because your supply is more, the demand is more. Yeah. By the time you get the benefit of it. That's why in distribution business they always do a 12-month cycles rather than doing a three-month cycles. Understood. That's helpful. On your EPC contract on the solar side, what are you now doing to protect your margins? Are the nature of contracts different from what they were before? Basically what you need to do is you need to consider what is the forecasted price of cell and modules, and consider now that the customs duty is there, you need to add that. In case you are getting it manufactured locally through the contract manufacturing, then you need to consider the custom duty for cell and not for the module. You need to do a much better projection based on whatever data is available of the future source of cells module and then take contracts on those lines. Also now that we have taken care of the currency fluctuation and the other balance of plant is where again the commodity prices have come back to it. You need to protect yourself by tying up on a long-term basis. wasn't customs duty a part of the, you know, change in law as well? Should we expect some benefit coming later? In some cases it was there. Yeah. Projects were bid before the customs duty was announced. They were there. In some cases where it was done subsequently, because of the delay in supply from China and the transportation delays and all that, one will not get any customs duty waiver or customs duty is not passed through. It’s a basket of projects under which we need to operate. Understood. That's helpful. That's all from my side. Thank you so much and all the best. Thank you. Our next question is from the line of Atul Tiwari with Citi. Please go ahead. Thank you. Again, on this Mundra Section 11 arrangement, which discoms are the customers for these three units under Section 11? Right now, we have been supplying it to Gujarat and Maharashtra. Under section 11, mandatorily you need to supply, and it is mandatory responsibility of all the buyers to take that power, or if they are not taking, they will still have to pay the fixed cost of that. That's the arrangement under section 11. Okay. These two months bills that you have raised, I mean, have you received any payments from the DISCOMs or it is all still pending and leading to some receivable data? Yeah. They have been paying, both Gujarat and Maharashtra have been paying. The other states have not paid, but they are waiting for the order from CERC, and thereafter they will take a call. Okay. Sir, what will be the current fuel cost of the power that is being generated? I don't have the numbers, but we can share that number with you. It depends on how the procurement of coal has been done. Not that everything comes on HBA tariff. Some of them are spot market or distressed sales. There is a blend of coal that comes, and based on that the tariff is determined. About INR 7-8, is that rough ballpark right? I mean, fuel, at fuel cost, right? Yeah. In that range, I would say. 650-700. Okay. Thank you. Thank you. Thank you. Our next question is from the line of Deepika Mundra with JP Morgan. Please go ahead. Thanks for taking my questions. On the receivables part, could you quantify as to what is the additional receivable from Mundra? Similarly, we see that the regulatory assets across the discoms, some of them have been going up. Can you talk a little bit about that? What's driving the increase over there? Regulatory asset is basically in the discoms only, whereby there is an arrangement where if the tariff goes up or the cost of generation goes up or the cost of power procurement goes up, then you are allowed to take it up with the regulator who subsequently gives it by an additional tariff or additional surcharge that has to be charged. In some cases it is the additional power purchase adjustment cost. In case of Mumbai operations, it has gone up. The details of the regulatory assets have been also shared with you in slide 31, and you can see over there what sort of cost increases have happened. Are you likely to receive, you know, a revised tariff order soon, or do you think that this continues to build up through the year? What happens is the regulator allows certain amount to be adjusted as a part of power purchase adjustment. They've already allowed that in Mumbai, certain quantum, not the full quantum. Similarly, in Delhi also there is a power purchase adjustment and a special power purchase adjustment which is there and a surcharge. The whole objective is that over a period of time it can be amortized. If it gets delayed then, they continue to pay interest for the outstanding regulatory assets. Got it, sir. On the transmission part, you mentioned once again about significant opportunities. Could you talk us through whether these are interstate or intrastate projects? What is the bid environment currently like for transmission? These are mixed. Some of them are interstate, some of them are intrastate, some of them are green corridors. There are large number of projects which are coming up in next 10 years. The numbers were something like INR 42,000 crores. INR 42,000 crore of projects are coming up. These are basically to meet the requirement of renewable power to be transmitted within the state as well as interstate. We are participating. Of course, it's a tough market in terms of large number of people who are there, large number of competitors. With better technology and we use Tata Projects as an in-house partner for implementing, we feel we have a much better chances of winning many of these projects. Got it. Sir, would it be possible to get the Mundra power plant profit loss for the quarter? Similarly you mentioned about you know the coal profit not being offset. Does that get offset once the supplementary PPA or the revised PPA with states gets effective? It depends what sort of an arrangement we come out with. At this stage there is nothing like that, and it's a little premature to say anything about this. As and when it gets decided, we'll share it. The other details, Rahul will share with you on Mundra. Now that Mundra is part of Tata Power, they will have to turn that around and share the details. Sure. Thank you so much. Thank you. Our next question is from the line of Rajesh Majumdar with B&K Securities. Please go ahead. Yeah. Thank you for taking my question, sir. I had a question on the DISCOM model, because we have been at this DISCOM business for some time now. At one stage, we were talking about meaningful profits from the DISCOM business, say in four-five years. Now, if you look at CESU, it's been around for some time and still it's not generating any kind of meaningful profits. The profits are seemingly also very erratic as someone pointed out. When is it that this DISCOM model is going to be generating or throwing up a reasonable number of profitability that we can you know see in our business? That was the first question. Look, Rajesh, the Odisha DISCOM was the first one. The Central DISCOM was taken on June 1, 2020, and this was the COVID period. In the last two years it has made profit. Last year was the first full year of operation and it has made profit. I don't have the number, but I can tell you that it has made substantial profit last financial year. In this quarter also it has made profit. The type of changes that it has brought in central Odisha, the same type of changes are happening in the other three DISCOMs also. All the DISCOMs last year made profit. I think we have... When we had bid, our prediction was that first three years we'll not make profit and the fourth year onwards we will make profit. We've actually done very well in the distribution in Odisha. Secondly, there are basically three profit drivers in a distribution business. First is on the CapEx that you incur, you get a return of 15%. Second is on the reduction of AT&C loss and the billing efficiency, you get an incentive if it is better than whatever is the benchmark that has been set by the regulator or the trajectory that has been set. The third is if you do any old collections before takeover, you get a certain incentive on that. In all three, we have been getting on the old payments and on AT&C. The CapEx has been incurred in last few months. The benefit of that will start coming in the subsequent months, in the subsequent quarters, because the capitalization has not happened as yet. Now once that also happens, then the profit will become much more robust. I'm sure in next one year you will see a huge amount of bump up in the profit in all these DISCOMs. Say FY 2024/2025 will be a reasonable year to assume some kind of meaningful profits from these? More than meaningful, yes. Okay. Sir, my second question was probably I missed out the first part of your conversation. On the Tata Projects, is this a one-off kind of loss we take? Because the revenues are not down, revenues are also up. It's not that the revenues are down, but still the loss is quite substantial. Is it like to be taken as a one-off thing? That's what Tata Projects, we have projected what will be the cost to completion, and we are booking losses based on that. It's not that they have incurred loss already, but on cost to completion basis, we are taking the loss and that is being considered. You need to consider it from that aspect. It's not that the revenue has come down, but we expect that when it gets completed, it will incur a loss and we are considering that value. It is not a percentage of completion accounting method, is it? Yeah. Hello, Rajesh. Our next question is from the line of Girish Acharya with Morgan Stanley. Please go ahead. Sir, thanks for the opportunity. I just wanted to understand what is being discussed with the regulator or under the supplementary PPA more importantly. Is this about the profit sharing under Indonesia which is being ironed out because the HPC spoke about a certain formula? Or is there something else? I mean, under Section 11, has the regulator you know completely allowed all profits that you had in Indonesia? One clarification on Mundra. The second thing was on bill discounting. As of March 31, I think you had INR 11.5 billion of bill discounting done. Over and above that, the receivables have now gone up. Has the bill discounting come down, or what is the level of bill discounting now at the quarter end? The third one was on CapEx. We're spending about INR 10,000 crore on renewable. If you could just break it out for us, does this include the INR 3,000 crore of module manufacturing? How much commissioning are we expecting out of that balance if INR 3,000 crore is against the INR 10,000 crore? Thanks. Girish Acharya, on your first question, I've already replied it four, five times, that under Section 11, it's a full pass-through. There is no adjustment. The regulatory order is expected. We have to wait for the regulatory order to really know what exactly. The concept is that, and the law is that if under Section 11, if you incur any cost, it has to be fully paid for, both the fixed and the variable costs. Secondly, now on the bill discounting, the details we will furnish you what has been done in terms of bill discounting. We'll give you the details. What's the third one? Breakdown of the CapEx. That also we'll share with you. You are 100% right that the INR 3,000 crore that we will incur in the manufacturing is part of the INR 10,000 crore and the projects which are ongoing projects, utility scale projects that we are doing, those will be the balance. We've already implemented, I think, 275 MW in the first quarter. There's another 225 which we have commissioned in this month. All that will be part of the CapEx that we incur in this financial year. Supplementary PPA, is there a discussion around Indonesian coal profit or there is no discussion, and they will also treat it similar to the regulator? I mean, how Let's see. We are waiting for a final decision from CERC on the Section 11, and then we will be discussing the supplementary PPA and what sort of arrangement it should have. Sure. Thank you. Thank you. Our next question comes from the line of Anuj Upadhyay with HDFC Securities. Please go ahead. Yeah, hi. Thanks for the opportunity. Just a follow-up, sir, on the supplementary PPA arrangement you mentioned. This is only with Gujarat which we would be discussing or we have other states as well on board? At this stage we are discussing with Gujarat. Once we agree with them, the understanding is that the similar arrangement can be agreed with the others. Okay. The one which we are having with Gujarat is for the same quantum we had with them earlier, so close to around. Yeah. Okay. Yeah. The quantum will be the same with all the five states. Okay. Fair thing, sir. Sir, coming to the EPC side, on the last call, sir, you had mentioned that the new orders which we have booked in the division are now benchmarked with the new module prices and hence, you know, the margin should improve from the Q1 onwards, but it couldn't happen as on date. Could you just, you know, quantify that of the current order book of around roughly INR 14,000 or so in the EPC, what quantum is now benchmarked with the new module prices so that at least we have some kind of clarity on the margin perspective going forward? What happens is the projects which have been committed in Q1, now the projects which are taking more than a year now. The third project which are from last six to nine months, and the projects. Those are on a much higher margin. The earlier ones we had projected that the prices would come down. That did not happen and of course it's been the case. Those are the ones which got impacted. Okay. Lastly, sir, if you could just, you know, as you had mentioned earlier, if you can share the details of Mundra Indonesian coal, with us, that would be helpful. Sure. Yeah. That's it, sir. Thanks a lot. Thank you. Our next question is from the line of Murtuza Arsiwalla with Kotak Securities. Please go ahead. Yeah. Hi, sir. A couple of questions again revolving around coal and CGPL. One, you know, there is this INR 2,000 crore working capital increase that we see at a consolidated level. Could you highlight if any part of it is to do with CGPL because you may be recording the revenues but not received any of the cash? That's the first one. Second is, you know, when I'm looking at some of the numbers that are there in the presentation, you're talking about coal cluster profits of about INR 968 crore and combined profits of around INR 460 crore of losses around Mundra, right? The implicit math. Again, the request to please provide all of the details on CGPL and coal so that we are better able to appreciate the financials. Yeah, we'll share the details with you. Sure. On the working capital and the computation of loss? Yeah, that also, we'll share the details. Sure. Thank you. Our next question comes from the line of Ankit Patel with L&T Mutual Fund. Please go ahead. Yeah, good evening, sir. I had a question around the, again, on the Mundra side only. If I see the PLF levels that you have reported at Tata Power levels, they remain similar to the Q4. The revenues have gone up at the Tata Power standalone level, yet the profitability is down at EBITDA level. Wanted to understand whether this current Section 11, the way in which, you know, the plant is running, is it even profitable? I think when we look at the standalone of Tata Power, it's a combination of various things, including you know CGPL, the Mundra plant, right? I think it will be difficult to strip down separately on what the impact on the standalone on the Mundra plant. As we have discussed, we will separately try and work it out and share. Of course as Praveer Sinha has said that at the moment we're looking at the CERC rates and that is supposed to be in principle a pass-through. We have taken up the matter further with CERC to kind of get a revised tariff. Till the time that is implemented, it will be very difficult to decode as to what is the exact impact of that. I think you'll have to just wait for some more time and maybe in the next quarter we'll have a better clarity. Okay. Thank you. The second question was around Tata Projects again. In the Q4, you know, also there was a significant amount of, you know, negative booking from Tata Projects. Our understanding, and I think the discourse at the time was that, probably just some kind of cleanup as well as the amount of commodity price impact. Now again, in this Q1, there is a booking and you're mentioning that it is on account of some cost accounting. Want to understand if this is a trend that would continue throughout this fiscal, or this is something that would stop at some point in time. No, I think, again, Dr. Sinha, in reply to the previous question, have mentioned that there are certain projects which were taken up earlier, and there's a true up on the cost to completion of that. To that extent, we have, the Tata Projects have booked those losses. We don't expect, you know, further big losses to come in the subsequent quarters. I guess what you see right now is basically that cost to completion of work on the projects that was taken up earlier, which had of course had the impact in the previous quarter as well and now. I think we are almost close to now getting back to normal there. Okay. Thank you. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one. Our next question comes from the line of Gopal Nawandhar with SBI Life. Please go ahead. Hello, sir. Thank you for the opportunity. I think my question was also on this, you know, the write-off of order provisioning for the EPC businesses, both for Tata Projects and solar. We have been like in the last few quarters been, you know, giving this comfort in terms of, like, the existing order book, you already taken some bit of provisioning, but still it is continuing for, you know, for some more quarters. We just wanted to, you know, get some comfort on that. The second question was on this INR 3,000 crore increase in receivables. If you can just, you know, highlight from which area it is coming, how much is from- Mundra, how much is on renewables and, solar EPC? As far as the renewables are concerned, Rahul will share the details with you. As far as the EPC for solar is concerned, last quarter it made a very good profit. It's only in this quarter that they have been stressed. As we mentioned that this is because of some of the older projects which were getting implemented. We had a huge hit also of the exchange rate. Now that we are fully hedged, it should not happen in future. Secondly, now on the Tata Power project, we took a stand last quarter and this quarter also, that we need to clean up all the projects where we have a probability of having losses. Based on our assessment, we have taken a hit last quarter also and this quarter. Hopefully now that all those projects have been identified and the provisions have been made going forward, this will not happen in fact in future. Sir, are we still running all three units in the Mundra? Yes, we are running all three units. Okay. Sure. Thank you very much, sir. Thank you. Our next question comes from the line of Apoorva Bahadur with Investec. Please go ahead. Hi sir. Thank you for the opportunity, and congratulations on strong results. Sir, wanted to understand, one of the notes to accounts, you mentioned that an additional revenue of INR 277 crore has been recognized for Mundra. This was under the supplemental PPA, is this correct? Also is the INR 277 crore only for the current period, or does it pertain to the additional revenue which for power supply during the previous quarter under supplementary PPA? This is the revenue accounting because we are running three units. To that extent the revenue has been accounted for. There's nothing exceptional about it. We can, you know, give you the breakup of that. That's not an issue. Okay. This is only for the period between first April to fifth May? Correct. Correct. Right. Fair enough. Sir, we are recording the full fixed charge for the plant, and billing it to all the states as of now? Yeah. We're kind of accounting as per the CERC order. Right. Fair enough. Sir, also in the distribution business, we are seeing a lot of your private competitors are entering into the smart metering business. Any plans for us given that we have a fairly large clientele? In the distribution business we are the largest in the country with 12 million customers. That's the sum total of all the other private sector players in the country. The type of understanding and the knowledge and experience that our team has, we are looking at taking it up in other states also. Once the private opportunities come, private sector opportunities, or there are also the licensing when it happens. We are definitely looking at being the biggest player in the distribution in the country. On smart metering? Smart metering also, we have done the maximum smart metering for our customers in Delhi and Mumbai as well as in Odisha. We are now implementing in all the four DISCOMs. We will become not only a big player of smart meters for ourselves, but we will also do it for various other state DISCOMs under the government scheme of RDSS. Okay. Sir, last question from my side, and this is on the coal business. Are we meeting the DMO obligation in Indonesia? Like, so basically wanting to understand if is this a case that this quarter we also had the mixed benefit as in higher share of exports resulting in higher profits? That's a given thing that you have to meet the DMO obligation. The DMO obligation is not right through the year, but in certain months, depending upon the quality of coal that you produce, the local power company, PLN, seeks that much quantity. In the month of January, February, we had supplied a huge quantity of coal under our DMO obligation, and that is 35% of the total capacity of the coal that is mined by us. We will meet that requirement and it's done through the year, not equally but spread out in different months. Okay, sir. Sir, in this quarter, were we below 25% or above 25%? Since we did a lot of supply in Indonesian works from January to December calendar. We've already done a large quantity in this year, and hopefully whatever the rebalancing will be done in a few months. Great, sir. Thanks a lot. Thank you. Ladies and gentlemen, due to time constraint, we will take our last question for the day. It's from the line of Rahul Modi with ICICI Securities. Please go ahead. Thank you. I'll just slip in a quick last question. Maybe repetitive just to understand, sir. As you mentioned that, you know, the interim tariff which was given that was, you know, I think the benchmark indices were different or it was behaving differently. In the two weeks that you said that obviously there was certain amount of difference, so are we billing as per the actual costs or are we billing as per the interim tariff which you were given? We are billing as per the interim tariffs. Once the actual cost details are given to CERC and they determine it and notify it, then whatever is the difference, we bill it. Whatever, if I'm not understanding it incorrectly, if this is coming in, then we'll have a, you know, prior period pull up on that front. Whatever, for the couple of weeks where we've not been able to charge the full amount. Yeah. Whatever is the actual amount that will happen. Whether it is up or down, that once let the tariff orders come then we'll know. Sure. Right, sir. Thank you very much. All the best. Thank you. I would now like to turn the conference over to Dr. Sinha for closing comments. Thank you to everyone for joining in the call and whatever details we could not furnish today, my colleague Rahul will share that with you. In case you have any other queries, please connect with Rahul and our investor relations team. We'll be more than happy to furnish you the details. Once again, take care and look forward to catching up again with you. Thank you, and thank you, Ryan, for conducting the calls. Thank you, sir. On behalf of the Tata Power Company, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you. Bye.