Azure Power Global Limited · OTC:AZREF

Azure Power Global — Q2 FY2021 Earnings Presentation

35 slides from Azure Power Global's earnings presentation, Nov 11, 2020

  1. Slide 1: Fiscal Second Quarter 2021 Earnings Presentation

    7 GW+ Pan India Portfolio of Solar Assets India’s First Private Grid Connected MW Solar Plant Issued India’s First Solar Green Bond Fiscal Second Quarter 2021 Ended September 30, 2020 Earnings Presentation November 11, 2020 1|Copyright © 2020 Azure Power |www.azurepower.com

  2. Slide 2: Disclaimer

    Disclaimer Forward-Looking Statements This information contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding our future financial and operating guidance, op

  3. Slide 3: Q2 FY 2021 Key Developments and Market Overview

    Q2 FY 2021 Key Developments 3|Copyright © 2020 Azure Power |www.azurepower.com and Market Overview

  4. Slide 4: Key Highlights of Recent Developments

    Key Highlights of Recent Developments One of the Largest Solar Operational Under Construction Committed(2) Portfolios in India (1) 1,834 MWs 1,281 MWs 4,000 MWs 7,115 MWs Key Developments • Cash Flow to Equity (CFe) from Operating Assets(3) was $14.7 million for 2Q FY’21, up 50% from 2Q FY’21. EBITD

  5. Slide 5: Market Opportunity

    Market Opportunity India’s 450GW Renewable Energy Capacity Electricity Usage per Capita (MWh) (2) Solar is the Lowest Cost Source of Power (3) Addition Roadmap (1) 450 13.0 US: ~11x > India Tariff (INR/kWh) China: ~4x > India CAGR: 28% INR/kWh 4.9 100 2.36 2.56 2.99 38 1.2 4 2015 May'2020 2022E 2030

  6. Slide 6: Projects Under Construction Update

    Projects Under Construction Update Rajasthan Rajasthan 6 - 600 MWs Rajasthan 8 - 300 MWs PPA Revised Q1 CY’21 (300 MWs COD expected • Q2 CY’21 by Dec) Q3 CY’21 COD Financing 100% Near complete Under Construction Operating Land 100% 100% Transmission ~90% complete; Work on transmission in process Con

  7. Slide 7: Projects Under Construction Update

    Projects Under Construction Update Assam Rajasthan Rajasthan 9 - 300 MWs Assam - 90 MWs Revised 25 MWs Commissioned • Q2 CY’21 August 2020; Q3 CY’21 PPA COD 40 MWs Q1 CY’21, 25 MWs 3Q’ CY21(1) Financing Nearly complete Completed Under Construction Land ~85% Operating Land in place for ~85 MWs Constr

  8. Slide 8: Industry and Regulatory Update

    Industry and Regulatory Update Industry Update Regulatory Update • India’s power supply remains in a deficit at 0.3% for the first half of • Basic Custom Duty (BCD) – The current expectation is that a 10 - FY’21. 20% BCD will be imposed, which will be in addition to the SGD, although there has not b

  9. Slide 9: Q2 FY 2021 Overview

    Q2 FY 2021 Overview 9|Copyright © 2020 Azure Power |www.azurepower.com

  10. Slide 10: 2Q FY'21 Key Performance Metrics

    2Q FY’21 Key Performance Metrics 1,834 MW Operating 7,115 MW Operating & US$ 0.45m Project US$ 14.5m Q2 CFe from 2% increase Committed (1) Cost/MW (DC) Operating Assets 111% increase 2% increase(2)(3) 50% increase(2) • 36 MW (116 MW DC) commissioned • 1,281 MWs are under construction • DC cost per M

  11. Slide 11: Review of Q2 FY'21 Results

    Review of Q2 FY’21 Results Reported Reported Reported 2Q FY’21 After % Change Adjustments* (in million) 2Q FY’20 2Q FY’21 2Q FY’21 Adjustments Adjusted Q2FY’21 vs Comments US$ INR INR US$ US$ Q2FY’20 2,847 3,504 47.6 - 47.6 23% 5% increase in operational DC MWs. Additional revenue of Revenue $2.2 mi

  12. Slide 12: Economies of Scale and Cost Reductions

    Economies of Scale and Cost Reductions G&A as a Percent of Revenues G&A Excluding Stock Compensation & O&M per MW-Year Management Transition $14 40% 25 $12 35% 20 US$ Thousand/MW/Year 30% $10 % of Revenue 25% USD (Mn) 15 $8 20% $6 15% 10 $4 10% 5 5% $2 0% 0 $- FY'15 IPO FY'17 FY'18 FY'19 FY20 LTM 1Q

  13. Slide 13: Operating Assets Review: EBITDA, CFe, & Leverage

    Operating Assets Review: EBITDA, CFe, & Leverage 50% growth in CFe from Operating Assets YoY EBITDA from Operating CFe from Operating Assets Assets (in US$ Mn) (in US$ Mn) Positive Drivers: $40.7 $14.5 • Revenues: +$8.9 million +50% • Lower Debt Amortization: +$2.2 million $9.7 +20% Partly offset by

  14. Slide 14: Balance Sheet Highlights

    Balance Sheet Highlights As at March 31, As at September 30, 2020 2020 (in million) (in million) INR INR US$## Cash, Cash Equivalents and Current Investments* 9,792 7,828 106.4 Property, Plant & Equipment, Net 95,993 103,712 1,410.3 Net Debt# 73,806 79,721 1,084.0 Hedging Asset (net) 6,266 5,290 71.

  15. Slide 15: DSO by Counterparty

    DSO by Counterparty Amounts in US$ million On time/ Past due Project Net Within Past due up DSO Customer Name Capacity (MWs) more than 365 Name Receivables grace to one year days (2) days period(1) _ _ SECI , NTPC, NVVN 689 11.4 11.4 54 AP-1 Southern Power Distribution Com of AP Ltd 50 10.6 1.0 5.1

  16. Slide 16: Updated FY'21 Guidance

    Updated FY’21 Guidance 2,300 – 2,500 MWs INR 15,300 – 15,800 million(1) Operating by March 31, of Revenue for FY’21 2021 3Q FY’21 Revenue: INR 3,600 – 3,800 million Q3 FY’21 PLF 19.5%- 20.5% _________________________ 1) US$ 208- 212 Mn (at September 30, 2020 exchange rate- INR73.54 to US$1) 16|Copyr

  17. Slide 17: Long Term Outlook

    Long Term Outlook MWs Operational Guidance MWs Gross Margin(2), Cash Flow to Equity for 8,000 7,000 Operating Assets(3) and Debt Forecast 6,000 USD Millions Gross Margin: CAGR $700 5,000 $575 - $675 30% 4,000 CAGR $600 3,000 40% 2,000 $500 1,000 - Gross Margin: $400 FY'17(a) FY'18(a) FY'19(a) FY'21(

  18. Slide 18: Appendix

    Appendix 18|Copyright © 2020 Azure Power |www.azurepower.com

  19. Slide 19: Historical Plant Load Factor (PLF); Annual, Quarterly and 3Q FY'21 Forecast

    Historical Plant Load Factor (PLF); Annual, Quarterly and 3Q FY’21 Forecast 24.0% 23.0% 22.7% 22.3% 22.0% 21.5% 21.0% Annual PLF 20.5% FY'20 19.5% 20.0% 19.5% – 20.5% PLF FY'19 18.6% 19.4% 3Q FY’21 forecast FY'18 18.2% 19.0% 18.8% 17.9% 18.0% 17.0% 17.7% 16.4% 16.0% 16.8% 15.0% 1Q 2Q 3Q 4Q FY'19a FY

  20. Slide 20: Historical Plant Load Factor (PLF); Green Bonds Performance

    Historical Plant Load Factor (PLF); Green Bonds Performance PLF: Azure Power Energy Limited PLF: Azure Power Solar Energy Private Limited 22.0% 27.0% 26.3% 21.0% 21.0% 25.5% 25.0% 20.0% 20.1% 20.0% 23.0% 22.7% 19.0% 21.0% 21.0% 18.0% 17.3% 20.1% 19.0% 17.0% 17.0% 17.0% 16.0% 15.9% 16.6% 15.0% 15.0%

  21. Slide 21: Use of Non-GAAP Financial Measures: EBITDA

    Use of Non-GAAP Financial Measures: EBITDA Adjusted EBITDA is a non-GAAP financial measure. We present Adjusted EBITDA as a supplemental measure of its performance. This measurement is not recognized in accordance with USGAAP GAAP and should not be viewed as an alternative to USGAAP GAAP measures of

  22. Slide 22: Reconciliation of Non-GAAP Measures to Comparable GAAP measures

    Reconciliation of Non-GAAP Measures to Comparable GAAP measures Quarter Ended September 30, Six Month Ended September 30, (in million) (in million) 2019 2020 2020 2019 2020 2020 INR INR US$ INR INR US$ Net loss (756) (368) (5.0) (585) (322) (4.5) Income tax expense/ (benefit) 27 (97) (1.3) 171 220 3

  23. Slide 23: Use of Non-GAAP Financial Measures

    Use of Non-GAAP Financial Measures Adjusted EBITDA is a non-GAAP financial measure. The Company presents Adjusted EBITDA as a supplemental measure of its performance. This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance

  24. Slide 24: Cash Flow to Equity (CFe)

    Cash Flow to Equity (CFe) For the quarter ended For the quarter ended September 30, 2019 September 30, 2020 (US $ million) Operating Others Total Operating Others Total Sale of power 38.7 - 38.7 47.6 - 47.6 Cost of operations 3.4 - 3.4 4.2 - 4.2 General and administrative 1.3 5.7 7.0 2.7 9.2 11.9 Ad

  25. Slide 25: Cash Flow to Equity (CFe) – Contd.

    Cash Flow to Equity (CFe) – Contd. (1) Items from the Statement of Cash Flows. Other items include: loss on disposal of property plant and equipment of Nil, share based compensation of US$ 0.3 million and US$ 7.2 million, realized gain on investment of Nil, non-cash rent expense of US$ 0.6 million a

  26. Slide 26: Cash Flow to Equity (CFe)

    Cash Flow to Equity (CFe) Six Months ended Six Months ended September 30, 2019 September 30, 2020 (US $ million) Operating Others Total Operating Others Total Sale of power 84.8 - 84.8 101.2 - 101.2 Cost of operations 7.5 - 7.5 7.8 - 7.8 General and administrative 5.9 8.5 14.4 4.4 12.7 17.1 Adjusted

  27. Slide 27: Cash Flow to Equity (CFe) – Contd.

    Cash Flow to Equity (CFe) – Contd. (1) Items from the Statement of Cash Flows. Other items include: loss on disposal of property plant and equipment of Nil and US$ 0.1 million, share based compensation of US$ 0.5 million and US$ 8.1 million, realized gain on investment of 0.1 million and Nil, non-ca

  28. Slide 28: Projects Commissioned - Utility

    Projects Commissioned - Utility As on September 30, 2020 Commercial Duration PPA Capacity DC Capacity Tariff Project Names Operation Off taker of PPA in Credit Ratings (MW) (MW) (INR/kWh) Date(1) Years Operational – Utility Punjab 1 (3) Q4 2009 2 2 17.91 NTPC Vidyut Vyapar Nigam Limited 25 AAA Punja

  29. Slide 29: Projects Commissioned – Utility and C&I

    Projects Commissioned– Utility and C&I As on September 30, 2020 Commercial PPA Duration DC Capacity Tariff Project Names Operation Capacity Off taker of PPA in Credit Ratings (MW) (INR/kWh) Date(1) (MW) Years Operational – Utility North & South Bihar Power Distribution Company Bihar 1 (3) Q3 2016 10

  30. Slide 30: Under Construction Projects – Utility and C&I

    Under Construction Projects –Utility and C&I As on September 30, 2020 Duration Expected Commercial PPA Capacity Tariff Credit Project Names Off taker of PPA in Operation Date(1) (MW) (INR/kWh) Ratings Years Under Construction Assam 1 Q1– Q3 2021 65 3.34 Assam Power Distribution Company 25 B+ Rajasth

  31. Slide 31: Debt Overview

    Debt Overview As of September 30, 2020 Maturity Profile (1,2,3) $500 $467.5 $465.1 $400 $300 $200 $83.1 $88.7 $100 $62.7 $23.5 $0 FY'21 FY'22 FY'23 FY'24 FY'25 - 29 FY'30 & Beyond Debt Split by Currency LT vs ST Debt Split INR Debt Foreign Debt Short Term Debt Long Term Debt 271.0 , Consolidated Deb

  32. Slide 32: Project Debt Schedule

    Project Debt Schedule As of September 30, 2020 Outstanding Principal Amount (In millions) Type of Interest Currency Maturity Date(1) Commissioned/ Name of Project INR US$ (2) Under construction Rajasthan 6 2,659 36.2 Fixed US$ 2021 Under construction Andhra Pradesh 1 2,508 34.1 Fixed INR 2022 Commis

  33. Slide 33: Project Debt Schedule

    Project Debt Schedule As of September 30, 2020 Outstanding Principal Amount (In thousands) Type of Interest Currency Maturity Date(1) Commissioned/ Name of Project Under construction INR US$ (5) Punjab 3.1 and 3.2 1,219 16.6 Fixed INR 2024 Commissioned Chhattisgarh 1.1,1.2 & 1.3 1,256 17.1 Floating

  34. Slide 34: Glossary of Select Terms

    Glossary of Select Terms Accelerated Depreciation – Accelerated depreciation can be elected at the project level, such that projects that reach COD in the first half of the fiscal year can expense 100% of eligible project costs in year 1, and otherwise can expense 50% of project costs in year 1 and

  35. Slide 35: Affordable Solar Power for Generations

    Affordable Solar Power for Generations Excellence | Honesty | Social Responsibility | Entrepreneurship 35|Copyright © 2020 Azure Power |www.azurepower.com

Azure Power Global — Q2 FY2021 Earnings Presentation on 6ix