Transcript of conference call held on Friday, February 14, 2025 with Investors and Analysts to discuss the financial results for the third quarter ended 31st December, 2024 (Q3 FY 2024-25)

government buildings with 18 ministries allocated to us. The process of empanelment of vendors

for government buildings completed and signing of MOU with respective states and ministries

is in process.

You may also be aware that SJVN has been listed as one of the Renewable Energy Implementing

Agency, REIA, by the Ministry of New and Renewable Energy, MNRE, to help meet the 500

gigawatt mission by 2030. In financial year '24-'25, we have floated tenders for 7.5 gigawatt

against a target of 10.8 gigawatt.

And overall, SJVN has achieved an awarded capacity of 2.4 gigawatt during this financial year.

I am also pleased to share that SJVN was recognized as the first runner up in the SHRM Award

for Excellence in managing workforce in the public sector enterprises category during the 13th

SHRM India Annual Conference 2024 held in New Delhi on 18th October 2024.

I am also pleased to inform you that SJVN is assigned the task of BIA to 3 companies. NTPC,

NHPC and SJVN have assigned the target of implementation of battery energy storage system.

So SJVN has been given the target of installation of 1,500 megawatt hour and SJVN is working

on this.

We will install 1,500 megawatt hour as the target is given by the MNRE and Ministry of Power.

I would like to reiterate that SJVN is progressing towards achieving our mission of installing a

25,000-megawatt portfolio in operation by 2030 and 50,000 megawatts by 2040. Thank you very

much. Thanks a lot. Over to you.

Moderator:

Thank you very much. The first question is from the line of Mohit Kumar from ICICI Securities.

Please go ahead.

Mohit Kumar:

First question, is the total renewables portfolio, which you had won, I think where you

participated and one is around 7 gigawatt, right? While you just mentioned that the under

construction portfolio is 2.2 gigawatt. So where is the gap? Is it there's a gap in signing the PPA?

Is the PPA signing getting delayed?

R.K. Chaudhary:

Thanks for your question. Yes, we have already received the tenders and the gap is because of

the PSA, power sale agreement and signing of PPA. So once we tender for as REIA, then we

approach various DISCOMs.

And once the power sale agreement is signed with the interested DISCOM, then we sign the

PPA, power purchase agreement with the developer. So as the PSA is not realized, so therefore,

we have not signed the PPA and has not given go ahead to the developer for installation of the

plant. Thank you.

Mohit Kumar:

Sir, in your opinion, of course, it's a large gap. Do you think that most of the PPA will get signed

in the next coming months? Or do you think there could be further delay?

R.K. Chaudhary:

Yes, we have approached to various DISCOMs. And recently, there is a meeting conducted by

Ministry of Power and MNRE also. And now MNRE is also going to conduct a meeting with

the various state utilities. And so that MNRE will embrace the state utilities to sign the PSA.

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February 14, 2025

And once the PSAs are signed, then certainly we'll immediately sign the PPA with the

developers. So we are expecting that the things will improve within the next -- within 2 months.

Mohit Kumar:

My second question is when do you sign -- when do you expect this Buxar to get commissioned?

And the related question is when do you expect the Nepal power plant to get commissioned?

R.K. Chaudhary:

Which power plant?

Mohit Kumar:

Nepal hydropower plant.

R.K. Chaudhary:

Yes, Arun 3, 900 megawatts, it is under construction. And powerhouse and the water conductor

system are moving very nicely, and we are on time at these structures. But unfortunately, at dam

site, we are facing certain geological challenges. And because of that geological challenges, the

commissioning is expected to be -- to get delayed. And during the last quarter of the financial

year '27, we will commission the Arun 3.

Mohit Kumar:

And sir, on the Buxar, what is the time line?

R.K. Chaudhary:

Time line as of now, December 2027, we are targeting...

Mohit Kumar:

Buxar sir.

R.K. Chaudhary:

Sorry, Buxar is -- Arun 3, I was telling. Buxar just May month, next -- within 2, 3 months, we

are going to commission first unit. 660megawatt first unit, we are going to commission during

the month of May. COD during the month of May.

Mohit Kumar:

And the second one, sir?

R.K. Chaudhary:

Second one, it will take another 4 months.

Mohit Kumar:

The last question from my side...

R.K. Chaudhary:

During this year only, the entire capacity of 1,320 megawatts, we are going to...

Mohit Kumar:

Understood. Last question from my side, sir, on the PSP portfolio, are we looking to award some

tender in this next fiscal? Are you looking award some start construction on the PSPs?

R.K. Chaudhary:

On PSP, the first activity is preparation of pre-feasibility report. So -- and thereafter, DPR. So

we are in the process of preparation of PFR for 1,200 megawatts and 1,000 megawatts -- 2,200

megawatts and 1,000 megawatts. So 2 projects. And thereafter, we will start preparation of DPR.

DPR is under preparation for 2,400 megawatts, okay? So once DPR is prepared and cleared, it

will take another 4 years for the construction of pump storage plants.

Moderator:

The next question is from the line of Paras Chheda from Purpleone Vertex Ventures LLP.

Paras Chheda:

Yes. Sir, first of all, congratulations for a good set of results. I just wanted to know, sir, what

kind of capacity is likely to be added? I mean, in terms of total capacity for FY '25-'26? And

how much capacity was added in last financial year broadly? That's my first question.

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February 14, 2025

R.K. Chaudhary:

Yes. So I have our Director of Projects, Mr. Sushil Sharma. So I hand over the mic to Mr. Sushil

Sharma to answer this question.

Sushil Sharma:

Our CMD sir has already told you that Buxar 2 units of 1,320 megawatts will be commissioned

during this FY '25-'26, then again, this solar capacity will be able to add another 200 or 250

megawatts.

Paras Chheda:

Okay. So about 1,500-odd megawatts will be added this year?

R.K. Chaudhary:

Yes.

Sushil Sharma:

Yes, yes.

Paras Chheda:

And this 200-odd capacity, when will that be added, sir?

Sushil Sharma:

The work is going on. Maybe in the third quarter, we'll be able to add this much capacity.

Paras Chheda:

Third quarter of FY '26.

R.K. Chaudhary:

Apart from Bikaner -- Bikaner also.

Sushil Sharma:

Bikaner also 1,000 megawatts. We are extremely hopeful that once the panels are supplied, then

we will also commission in the third quarter of this '25-'26.

Paras Chheda:

Sir, even if not third quarter, fourth quarter also, you are talking about 2,500-odd capacity that

can be added this year?

Sushil Sharma:

Yes.

Paras Chheda:

So nearly the capacity can double in FY '26.

R.K. Chaudhary:

'26, yes, the overall.

Paras Chheda:

Okay. That is good to hear, sir, because I mean, the interest cost is already reflecting now

additionally. So in terms of project execution, I think that's a critical one. And secondly, sir, my

other question was there were talks about SJVN Green Energy being listed and demerged. So is

there a status on that, sir?

Sushil Sharma:

Yes. This listing, we are planning and we are just taking this -- we are weighing all the options.

Maybe in the third quarter, we will be able to -- this issue -- we'll try to listing in the third or

fourth quarter.

Paras Chheda:

Of FY '26?

Sushil Sharma:

Yes, '25-'26, yes.

Paras Chheda:

Okay. So about a year down the line. And for valuation, it is still time?

Sushil Sharma:

Yes. There's still time.

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February 14, 2025

Moderator:

The next question is from the line of Ragini Pande from Elara Capital.

Ragini Pande:

Sir, what is the reason of increase in interest expenses? It has gone up significantly.

Sushil Sharma:

So as you see in that we are in a growth phase and for that, we are borrowing capital for our

capex. And as you might have heard just now that we are in the process of commissioning

roughly 2 to 2.5 gigawatt of capacity in FY '26. So most of the capital is being infused in -- under

construction projects. So that's why the -- interest rate is going up temporarily till FY '26. So

once the plant will be commissioned, again, the situation will improve.

Ragini Pande:

And sir, the same question for the depreciation expense as well. What was the reason for that?

R.P. Goyal:

I'm R.P. Goyal, Director of Finance. Since we have commissioned our Naitwar Mori during the

third quarter of last FY, so full year depreciation -- 9 months depreciation has been charged in

this financial year. That's why depreciation has increased. And the similar reasons are for the

finance cost also.

Due to commissioning of Naitwar Mori, there is an increase in finance cost. Furthermore, we

have done monetization of -- securitization of our return on equity as per the Government of

India instructions. That's why finance cost has increased in the current financial year. And this

money, we have deployed in our renewable energy projects.

Ragini Pande:

And can you give the breakup for the incentive income this quarter and the last [

inaudible

0:24:30

]

R.P. Goyal:

For current quarter is INR68.49 crores. So you are asking about incentive?

Ragini Pande:

Yes, incentive income?

R.P. Goyal:

Incentive. For Q3 incentive is INR68.49 crores. And during last year, similar quarter, it was

INR51.18 crores.

Ragini Pande:

Okay. And I don't know whether I missed this, but what is the capacity addition target for FY

'26 and '27? And it would be great if you could give a breakup between the renewable and the

hydro capacity.

R.P. Goyal:

So we would be able to add roughly around 1.5 gigawatt of solar in FY '26. And thermal side,

we would be adding this 1.3 gigawatt of thermal. These are -- so if you put together, it is around,

say, roughly 3 gigawatt of capacity, which company is going to add in FY '26.

Ragini Pande:

Okay. And any guidance for '27?

R.P. Goyal:

So '27, definitely, as you know, we have a large portfolio where, again, in '27, we would be

adding Arun 3, so '27-'28 that is. So '27, we will be adding another 1.5 gigawatt of project from

our renewable portfolio.

Moderator:

The next question is from the line of Mohit Surana from Monarch Networth Capital Limited.

Mohit Surana:

Sir, my question is our target for FY '26.

Moderator:

Sorry to interrupt. I would request you to please use your handset.

Mohit Surana:

Am I audible now?

R.K. Chaudhary:

Yes.

Moderator:

Yes, sir.

Mohit Surana:

Perfect. Sir, my question is for FY '26, SJVN initially had a target of achieving around 12

gigawatt and by FY '30, we are aiming for 25 gigawatt. Currently, we have under construction

of around 5 gigawatt ballpark number of -- ballpark capacity that is under construction. And I

just want to understand, I mean, how practical should we be in terms of estimating what will be

the likely capacity by, say, FY '27-'28 and FY '30? Because I think 25 gigawatt looks farfetched

and will not be achievable considering the kind of pipeline we have.

R.P. Goyal:

So you have to understand one thing here that as on date, we stand at 2.5 gigawatt and another

roughly 3 gigawatt we are adding in FY '26. Our total portfolio on the renewable side, where

you understand we can add capacity in a short span of time from 18 months to 24 months, and

we have a portfolio of roughly 7.2 gigawatts. So if we take our renewable portfolio, hydro side,

you have heard about numbers.

And a lot of work is in progress. Sir has just shared that we have signed MOUs and survey

investigation and DPR preparation of solar as well as the pump storage and the hydro projects

are in process. So as of now, we are doubling our capacity in FY '26. And every year, we are

going to -- by FY '26, we are going to add, say, roughly around 3 gigawatt of capacity every

year.

R.K. Chaudhary:

Arunachal.

R.P. Goyal:

And Arunachal, we have roughly 5 gigawatt of a portfolio where we are in advanced stage, we'll

commence construction in the Italian, and this is the largest hydro project of India, and that will

come somewhere around by FY '30 or '31. So we are still quite optimistic to achieve our target

of this 25 gigawatt by 2030.

Mohit Surana:

Understood. Sir, when you said 3 gigawatt per year, that is inclusive of both hydro and solar or

is it...

R.P. Goyal:

Yes. It is inclusive of hydro and solar. And maximum capacity like 25 gigawatt mix, wherein

we'll be adding roughly 16 gigawatts from the renewable side, solar and wind. And the rest of it

around 8 gigawatts will come from the hydro side and balance would be thermal.

Mohit Surana:

Understood, sir. Understood. Sir, can you help me with the regulated equity for the company

currently and projected for next year?

R.P. Goyal:

So you just send a mail, we'll share through mail exact numbers of regulated equity.

SJVN Limited

February 14, 2025

Moderator:

The next question is from the line of Vipul Kumar from Sumangal Investments.

Vipul Kumar:

So 3 gigawatt will be added next year. So what should be the depreciation run rate annually for

those projects we should consider?

R.P. Goyal:

Exact numbers, we don't have as of now. What would be the depreciation for the upcoming

commission projects. So we'll revert back through mail.

Vipul Kumar:

So why don't you put a detailed presentation, you are implementing so many projects. So likely

completion and all those shares, your peers are putting detailed presentation in one of the con

calls last year also, I had suggested this. This has become -- I mean, very confusing for investors

how to.

R.P. Goyal:

We understand. And definitely, we are going to do the investor conference. There we'll share

the detailed numbers, as you said.

Vipul Kumar:

No, no. But before you do investor conference, at least you could put up a presentation where

you can share the detailed status of each project which you are implementing as of today and

which are the projects likely to be commissioned year-wise, that is not a very big deal, sir. So

please don't take it as criticism. This is our suggestion, sir.

R.P. Goyal:

Most welcome your suggestion. Most of the information is available on our website. However,

as you said in the presentation form, we will share with the investors. Thank you for your

valuable suggestion.

Vipul Kumar:

And sir, lastly, in opening remarks, CMD sir said that we have signed a memorandum with Bihar

government with tariff of INR9 some paisa. Have I heard it correctly?

R.P. Goyal:

No, that tariff number. Tariff number was not discussed. It is a pump storage project. So tariff

for pump stage project, you understand is roughly in the range of INR8.5 or INR9.

R.K. Chaudhary:

INR9. Yes.

Moderator:

The next question is from the line of Rupesh Sankhe from Elara Securities Private Limited.

Rupesh Sankhe:

Sir, this quarter, we have seen very good incentive income. Even surcharge income has also

gone up, coupled with the higher PLF. So the PBT growth was not that high. So is it because of

higher financing cost kind of under recovery?

R.P. Goyal:

Yes. It is due to -- you are right, it was due to higher finance cost only.

Rupesh Sankhe:

Okay. Sir, how we are placed in terms of foreign currency exposure, sir?

R.P. Goyal:

Can you repeat your question?

Rupesh Sankhe:

Foreign currency exposure, sir?