Adani Power Limited (ADANIPOWER) Earnings Call Transcript & Summary

Gentlemen, good day, and welcome to the post Results Q3 FY '25 Earnings Conference Call of Adani Power Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pranav Furia from Antique Stock Broking. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. We are pleased to welcome you all to the Q3 FY '25 Earnings Call of Adani Power Limited. Today, we have with us the management team represented by Mr. S B Khyalia, CEO; Mr. Dilip Jha, CFO; and Mr. Nishit Dave, Head, Investor Relations. We'll start with the brief opening remarks which will be followed by Q&A. Over to you, sir.

Good afternoon, everyone. Thank you for joining us today to discuss our financial results for the third quarter of financial year '25. I have with me our CFO, Dilip Jha and Investor Relations Head, Nishit Dave. I'm sure you must have downloaded and gone through our results announcement and presentation. Adani Power has continued its strong operational and financial performance in quarter 3 with higher operating capacity after the recent acquisition of Moxie Power that was [indiscernible] by Coastal Energen, Korba Power and Dhamra power plant. As you all know, India's power demand has been growing strongly. Barring some impact of seasonability and weather in recent months, our fleet is well positioned to address this demand, both under PPAs and in the merchant market. As a result of this, we have continued with a strong PLF performance in quarter 3, and the 9-month period till December 2024. While our power supply under PPAs continue to enjoy a good merit order position, we have dispatched higher volumes in the market, short term as well as merchant. On a 9-month basis, APL achieved a PLF of 69% and dispatch of 69.5 billion units till December '24, which is a growth of 22% over the corresponding period of '24. Our revenues also registered a growth of 13% on a recurring basis for this period to reach INR 41,951 crores. The revenue under PPA incorporates an element of lower import fuel prices. In the case of merchant sales, while tariffs have come down in the recent year, we were able to increase our volumes by more than 50% by leveraging our competitive advantages and earn substantial contribution. As a result, we have achieved a growth of 22% in recurring EBITDA for the 9-month period ended December '24, to INR 16,478 crores. We have been able to resolve all our major regulatory matters successfully in the previous 2 fiscal years, due to which our recognition of prior period revenues has gone down. We recognized INR 2,420 crores of onetime revenue only in the 9-month period December '24, as compared to INR 9,227 crores in the corresponding period of 2024. Our profit after tax for the 9-month period is at a strong level of INR 10,150 crores, as against 2,940 crores for quarter 3, 2025. This robust profitability and healthy liquidity are helping us to fuel our expansion plans to achieve more than 30 gigawatts of operating capacity by 2030. We have already given out the main plant equipment orders for 11.2 gigawatt capacity and secured the most critical part of the project supply chain. We are now giving out orders for civil wire correction and commissioning and balance of plant in a phased manner for the upcoming projects. Our ongoing expansion project at Mahan for 1,600 megawatt is well underway and on schedule with more than 40% physically progressed. We have also started work at Raipur site for 1,600-megawatt expansion project, which will supply power to Maharashtra homes for which we have signed a PPA for net capacity of 1,496 megawatts. In addition to this, we are also in discussion with OEMs and other contractors for reviving and completing the 1,320-megawatt expansion project at Korba, which was earlier known as Lanco Amarkantak. More states are expected to come up with bids for long-term PPAs for sourcing baseload power. We are keen to participate in these bids and are confident of leveraging our key competitive strength successfully. We have selected our plant locations and various acquisitions very strategically. Their locational advantage and availability of land will enhance our competitive edge for the upcoming PPAs. Apart from this, we are also focusing on bolstering our fuel security by acquiring commercial mines in coal [indiscernible] that are in the vicinity of our power plants. We have recently acquired Stratatech Mineral Resources from Adani Enterprises Limited and amalgamated it into Mahan Energen. The acquired entity is the licensee for the Dhirauli mine, which is just next door to the Mahan power plant at Singrauli. It will supply 5 million tonnes of coal after 2 years, which will be utilized by the untied capacity of the Mahan power plant. While we focus hardily on business growth and performance, we also pay equal attention to our responsibilities as a good corporate citizen. We make consistent efforts to fulfill our ESG commitments and improve our performance on various parameters. I'm happy to note that our all around efforts have earned recognition in the form of improved ESG ratings, awarded by various Indian and international ESG rating agencies. Recently, we have improved our score from 48 out of 100 to 68 out of 100 in corporate sustainability assessment by S&P Global. This puts us among the top 15% in the peer set, which has an average rating of only 42 out of 100. We have received other similar high ratings and continue to improve our performance year-on-year. Going forward, we are fully committed to enhancing the value created for our all stakeholders through a relentless focus on quality and efficiency in all aspects of our operations. Thank you for your continued support. I look forward to your questions. I'll now hand the call over to our CFO. Over to you, Mr. Dilip.

Thank you, Khyalia sir, and good afternoon, everyone. As Khyaliaji has put in, our performance for 9 months and quarter 3 of financial year '25 continues to reflect our strategic initiatives and operational excellence. On the operational side, APL generating capacity during quarter 3 FY '25 was 17,550 megawatts, as compared to 15,250 megawatts in quarter 3 FY '24, and this is mainly due to acquisitions. It achieved a consolidated PLF of 63.9% in the recently concluded quarter, in comparison to 68.6% in the corresponding period of last year. The main reason for the lower PLF was demand variability due to weather conditions apart from a strong base effect. However, we have maintained excellent availability of our plants on the strength of our O&M excellence and fuel management expertise. Power sales volume grew by 8% for quarter 3 FY '25 as compared to FY '24, supported by higher operating capacity and a strong growth in merchant volumes. In the third quarter of FY '24, '25, our continuing revenue stood at INR 13,434 crores, showing a stable performance compared to previous year. Our continuing EBITDA for the quarter was INR 4,786 crores, reflecting our ability to maintain profitability despite market challenges, like seasonability and variability of demand. The continuing profit before tax for the quarter was INR 2,659 crores, while onetime prior period income was INR 1,400 crores in quarter 3, FY '25 as compared to a derecognition of compared to a very lower amount of INR 50 crores in the same period of last year. On the base of this strong operating profitability and recovery of past dues, we posted a strong profit after tax of INR 2,940 crores for the quarter. For the first 9 months of FY '24,'25, our continuing revenue grew by 13% year-on-year to INR 41,951 crores. This growth was primarily driven by higher sales volumes, supported by improved power demand, as compared to the previous year and larger operating capacity. Our continuing EBITDA for the same period increased by 22% year-on-year basis to INR 16,478 crores. This robust growth was mainly due to higher recurring revenues and lower fuel prices. Our focus on cost control and operational efficiency has enabled us to achieve this significant improvement in EBITDA. Furthermore, our continuing profit before tax for the first 9 months of FY '24, '25 also grew by an impressive 33% year-on-year basis to INR 10,679 crores. This increase was driven by the improved EBITDA and effective management of finance costs also. Onetime prior period recognition was comparatively lower, that is at INR 2,420 crores in the 9 months ended December '24, as compared to INR 9,227 crores for the corresponding period of the previous year. And this is primarily due to our having received a majority of our regulatory claims in the previous couple of years. As you may be able to appreciate, the recurring financial performance we are reporting regularly now as simple demonstration of the core earning potential of our portfolio. We are also adding value-accretive capacity by organic means. Our recent acquisitions have been made at attractive valuations. They present us with an opportunity to turn them around quickly utilizing our sector-leading capabilities. These results underscore our commitment to delivering consistent and sustainable growth. We remain focused on enhancing our operational capability, optimizing our cost structure and capitalizing on the opportunities in the Indian power sector. Thank you for your continued support and confidence in Adani Power. We look forward to discussing our performance in more detail and addressing any questions you may have, please. Over to moderator.

[Operator Instructions] We have our first question from the line of Mohit Kumar from ICICI Securities.

My first question is, sir, can you please help us with the time lines for 1.4 gigawatt PPA, which is signed at MSEDCL, when it is going to kick up?

Can you repeat your question, please?

My question was, what is the time lines for 1.4 gigawatt PPA is signed with MSEDCL? What is the time line which you have to start supplying?

You are talking about Maharashtra?

Maharashtra, yes.

Okay. As per the PPA, there is a time period of 42 months for the commissioning of the unit. And before that, there is a period of 18 months available for financial closure. So let us say, total 60 months are available. But we are planning to commission this within a period of 4 years. So as per PPA, 5 years is available, but our internal plan is to commission within a period of 4 years.

Understood, sir. And on the Lanco, I think you acquired in this quarter. Is that right understanding? And secondly, what is the -- when do you expect this 1.3 gigawatt be operational in your opinion? And how much is the CapEx which we need to incur?

Commissioning of the balance work will be around 30 months. It will take around 30 months from, let say, today. And as regards to CapEx is concerned, I think it should be around INR 6,000 crores. So that is what the estimated cost.

Understood, sir. And have you acquired the Lanco completely in this quarter? Are you -- is that right understanding?

Yes. So we have acquired Amarkantak Lanco on 6 September, so partially 1 month falls in the quarter 2 and then 3 months in quarter 3.

Yes. And we have acquired 100% of that in case that is what you are asking.

Understood. And sir, can you please explain the onetime booking of this INR 14 billion and the nature of it? In the accounts, we see only 5C, which talks about INR 880 crores of INR 821.2 crores of recognition towards tariff compensation claims.

Yes. So this is pertaining to onetime income we have booked related to coal shortfalls in our Haryana Discoms. This is more than INR 750 crores. [indiscernible] DSM more than -- so this is around INR 420 crores. And the LPS charges in the rest of the Discoms. So in total, you can say Haryana Discoms, coal shortfall, INR 750, [indiscernible] DSM, INR 442 and another LPS for rest of the Discoms and mainly pertaining to Bangladesh.

And this is note #7, sir, which talks about the company has claimed compensation of alternate costs for 1.2 gigawatt of supplementary PPA Haryana Discoms. It speaks about INR 782 crores of recognized revenues. Is this included INR [ 300 crores ]?

Yes. So that is what -- so this is part of that. And Haryana Discoms has accepted our 50% claim. So this is what [indiscernible]

This is only 50%. The 50% claim is still there?

This is 50%, yes. We have raised a bill of up to December, INR 1,908 crores. Out of that, we have received INR 956 crores. This is almost 50% of that. And so with minor adjustment related to taxes and duties, net amount of INR 752 crores -- INR 782 crores we have recognized during the quarter. And we have received full payment against INR 782 crores from Haryana Discoms.

We have our next question from the line of Puneet Gulati from HSBC Mutual Funds.

My question is, again, just on this Haryana government recognition of INR 782 crores. So INR 916 crores was not accounted as income earlier in our P&L at all. Is that understanding correct?

Yes, this understanding is correct because what we do, we first ensure there was consistency of this income. In quarter 1, we had received, then waited to make it consistency in quarter 2 also we received. And finally, we saw that we are continuously receiving 50% payment. That is why in this quarter, we recognized. And it will be continued.

Understood. So how much more should we expect from this going into next few quarters?

We have received bill of INR 1,908 crores, and we have received half of the amount, and let's see.

Okay. My second question is in your presentation, you talked about the PPA for MSEDCL signs for 1,500 megawatts. My understanding was the 2,000 megawatt thing. So is 500 still to go or is it scrapped?

Which PPA you are talking about?

The MSEDCL PPA.

No. MSEDCL, the bid itself was for growth 1,600 megawatts, that is 2 units of 800 megawatts. And our plant is also -- the expansion is also for 2 into 800 units. And this is net capacity at the Maharashtra boundary after all the [indiscernible] consumption. So there is neither surplus in that expansion and nor there is any further availability under that project.

Understood. And if you can also talk about which states are you expecting to get bids from for your future tie-ups?

Many of the states has got the coal allocation under SHAKTI B(iv), which is the scheme under which the state is getting the coal for doing the competitive bidding for procurement of long-term power, under which Uttar Pradesh has got the coal, Madhya Pradesh has got the coal. Andhra Pradesh is in the process. Then Assam has got the coal, Karnataka has got the coal. So many of the states have either got the coal or have applied to Ministry of Power. So those are the target states where we expect that the bids will come and we will tie up.

Understood. That's -- and lastly, the status of your Bangladesh power plant? What's happening there?

Bangladesh power plant is running as per the PPA. There is absolutely no issue, and we have not received any communication from other side, which has any issue related to PPA. The payment position is concerned. We are getting from last 3, 4 months, slightly more than the regular bill. So in the process, some part of old outstanding is also getting liquidated.

Okay. Understood. That's helpful. And lastly, on the merchant power side, are you seeing lower tariffs, especially during the solar hours? And if you would -- and do you shut down your plants during solar hours? Or are you able to run it during that time also?

During solar hours, it is obvious that the tariff has to be lower and will go down lower because the solar power is available, let say, with reference to cost at INR 2.50 or so. So obviously, tariff has to be lower. But this is a trend from last 2, 3 years and going to be more or less same. But average rate of supply, particularly during third quarter was lower on account of lower demand in this year third quarter. It is a bit abnormal situation because of the temperature was not as high as it used to be. The demand from agriculture side was also lower. So this may be an aberration. Otherwise, the average tariff is going to be good because during solar hours, the rate may be lower. But other than solar hours, because the thermal capacity has not been added and therefore during peak hours, the country will continue to have shortages. And during those hours, the rate of power has to be almost INR 10. And overall, the average should be good.

So my question is how easy is it to shut down during solar hours and restart in the evening? Or do you continue to run during solar as well?

No, there is no need of shutting down, only the rate will go down. And secondly, we are not operating on a day-to-day basis. Even the merchant power plants, we are tying up in, let's say, weekly, monthly, 6 monthly, short term, medium term. So to a large extent -- to the extent of, let us say, technical minimum, it is always ensured that the capacity is tied up so that the plant will always run at technical minimum at least. And so during solar hours, the plant may be running at technical minimum so many times if the rate is not available, high rates are not available. But during peak hours, then you can immediately ramp up and operate at full capacity. So plants are not shut down during solar hours. They are operated at lower capacity.

We have our next question from the line of Bharat Shah from ASK Investment Managers.

I'm a little confused about your initial comments about third quarter numbers being strong and robust. But barring the volumes having gone up 8% in the third quarter compared to the last year third quarter, our operating revenues have declined 3%, continuing EBITDA has declined 5% and profit before tax from the continuing activity has declined 18%. So I couldn't correlate what that robustness we were referring to. Or did I hear wrong? I don't know, but I'm a bit confused on this.

After initial remark, I would give and then in detail, Dilip will explain. The robustness is with reference to the total supply, which we have done. And therefore, our PLF has been good. However, with reference to the EBITDA. EBITDA is a function of the quantity and the price. Obviously, the price has been lower during this third quarter because of -- as I explained that because of various reasons, the demand in the country was not that good as it used to be during this quarter. Last year quarter -- last year, the same quarter, the demand was quite high, and therefore, the market prices were at least INR 1 and INR 1.5 higher than this year. So the prices in the market has gone down this year because of various reasons, which I explained to the -- another participant. So right now Dilip can explain.

For quarter 3, my reported EBITDA was INR 6,185 crores as against that last time, the quarter 3 same period, this was INR 5,009 crores. So there is an increase of INR 1,100 crores. Yes, you are right, sir. In terms of continuing EBITDA we reported INR 4,786 crores as against INR 5,059 crores. So there is slightly INR 200 crores in the lower comparison to the last quarter continuing EBITDA. And this is mainly due to the merchant realization. Last time, quarter 3 FY '24, the average realization was INR 6.86 per unit. As against that, we reported INR 4.54. So this INR 200 crores, the lower -- this is mainly contributed by the comparatively lower tariff pertaining to merchant realization. And accordingly, its impact reflecting in terms of continuing profit before tax. Slightly in terms of depreciation cost and financing cost, this is due to new acquisitions, and we are very much confident that the period is coming in future, so new acquisitions will add significantly to our number.

So Dilip, broadly, volumes have grown up, but realizations have dropped. Finance and depreciation costs have gone up because of the acquired assets. But core performance broadly is similar to the last quarter -- to the similar quarter last year. It is not higher, but it's similar. It's higher in terms of the volumes, slightly lower in terms of the profits.

Correct, sir. So you will appreciate the merchant volume, merchant rate was INR 6.86 per unit against that INR 4.54. So more than INR 2 per unit. So this is an impact.

I understand. This was not there in the presentation. So which now makes it very clear. Bangladesh, what are the outstanding dues as of the moment?

It is around INR 800 million, Bharat, as of now is outstanding and overdue is something around INR 700 million. And something around INR 100 million, there is a difference between they and us because of reconciliation because of they are not -- they have not accounted for the LPS, et cetera, so far. So you can take INR 700 million as outstanding as on date broadly.

Right. And that 100 pending reconciliation, obviously, is hopefully not forgotten, right?

We have done the reconciliation up to the month of May. And up to that, they have also recognized INR 53 million of LPS. So we are, in a way, quite good considering a foreign country and they have done the reconciliation up to May. So it's not even, let's say, more than 12 months pending. So things are seemingly okay now.

Got it. But that INR 100 million pending reconciliation also will get reconciled and duly recovered, right?

Yes. As far as, obviously, we are not saying it is not replicable because there are issues of interpretation because we have started last year only this project. So there are issues of interpretation related to -- in the formula, there is the HBA concept, so which HBA will apply HBA, HBA1, HBA2, HBA3. So there are technical issues. So those things will get settled. And as per us, obviously, we are confident that we will get realization of that.

Right. And I suppose the next year should be a pretty strong year because I think volumes will be much higher in '26 compared to the current year, which is going by. And overall other fixed costs and compared to that realization, I think overall performance of the business should be even a lot stronger in the '26. Like in the 9 months of the current year, the core performance is very strong. I suppose next year with the increased volume, overall performance should be much, much better?

Yes, sure, Bharat, we also feel the same because from, let me say, January onwards, the demand has started picking up. The rates has also started picking up. And up to, let's say, June, we see a very high demand period. And July, August, September, obviously, there is a natural rainy season. October, November, December, also, we don't foresee at this stage that there will be any issue in demand because of various initiatives of Government of India, the consumption of the electricity in the country is increasing day by day. And we hope that this robust economic growth will continue. So we have a very strong direct relationship with the growth of the economy and the growth of the demand of power. So if the growth of economy will continue to be robust, obviously, it will help us, and we will also grow accordingly.

We have our next question from the line of Vinod from Phillip Capital.

Sir, just wanted to understand your view that there is a thought of bringing down the coal-fired technical minimum from 55% to 40%. So what do you think will happen in such a scenario? Because I think the government is thinking that solar will overtake coal in the dispatch.

So government has already given a trajectory whereby the various units of the power stations of entire country are divided, and they have to reach, let us say, those targets by '25, '26, '27, '28, '29. So our 2 units are there in the next year to achieve the 40%, and we are working on that. So obviously, when more and more solar power will be available, the unit should be capable of going down up to 40%. But as regards to thermal capacity is concerned, thermal capacity is not having much of issue because our revenue is dependent on availability. So we have to ensure that we are available. And thereafter, it is up to the customer to decide at what level they want to operate. Nevertheless, they cannot ask to operate less than 40%, which is going to be the technical minimum even after implementation of this flexible scheme.

Okay. So basically, I think the cutoff point will be the solar cost plus the fixed charge recovery that is going to the thermal plant should be lower than the cost of thermal. Otherwise, there's no sense in backing down thermal, right?

Not necessarily because solar is not going to have any variable cost and the solar will always have a must run status. So when the solar will come, you are not supposed to stop it, even if it is costing INR 2.5 to the end buyer. But as a country as a whole, it is not consuming any resources. So at that time, you cannot consume a consumable of, let us say, INR 2 coal and avoid the solar. So that is not going to work that way because all the green resources will have must run status. So they will inject the power. So we have to think of in that way.

Okay. So basically, the basic cost will be built into the system, it will be the solar cost plus the fixed cost recovery of the thermal plant broadly?

That is also not going to -- may not be true because the solar heating may be being generated for somebody else. The thermal is being generated for somebody else. So overall country level, the things will not be considered this way. On overall country level, what is the generation available during the day, let me say, against a demand of 4 lakh megawatt, 3 lakh megawatt is available from solar. So all the thermal base stations has to come down to 1 lakh megawatt, irrespective of who is the buyer of that thermal project.

Okay. Okay, sir. Sir, second question I had was on BTG. I think the recent ordering that has happened for Kawai, Mahan, Raipur. Was BHEL the sole bidder in those orders? Or were there other players also bidding for those BTG orders? When you negotiated the package 18 to 800 megawatt with BHEL?

It's not a question of bidding because it was not strictly doing the bidding. We have taken the costs and discussed with various parties. And finally, based on the lowest cost basis and considering the capability to deliver. So it's not only the cost also considering the capability to deliver. The BHEL was found the most, let us say, eligible supplier within our requirement. So that is where we have selected BHEL. And obviously, BHEL is the most reliable equipment supplier in the country. Being a PSU, obviously, the reliability is higher, the economic strength is higher, and we can get a surety that we will get our equipments on time.

Sure. But who are the other players in the freight, sir, other than BHEL?

I don't think we should be discussing who are our other competitors because these are short of confidential, let us say, discussions from whom I am sourcing, what I am sourcing, I don't think on a public platform, we should discuss.

We have our next question from the line of Nikhil Nigania from Bernstein.

My question is on the 12.5 gigawatt pipeline. So am I correct to understand the BTG orders have been placed for the entire quantum? And then accordingly, but do we have PPA visibility? I understand only for the Maharashtra contract and with Reliance Industries. Other than that, then what is the plan in terms of split between merchant and PPA in terms of capacity? And B, have we achieved financial closure for this entire quantum?

For entire 11.2 gigawatts, we have obviously placed the orders of BTG. And for the balance of plant also, we are in the process of putting up the orders. Obviously, we have signed for 2 units with the Maharashtra. And as I explained that many, many other states are going to come for bidding because the country has planned to add another 80 to 90 gigawatts by 2030, '31. And except, let me say, for the time being, NTPC and few states, there is no capacity addition. So there is a big gap in the capacity addition. So we hope that the states will come out with the bids, and we should be in a position. We are very confident that we should be in a position to tie up this entire capacity under the long-term PPA. So we are not envisaging these new capacities under the captive. And as regards to the financial closure is concerned, you must have seen our performance and results where we don't foresee much of requirement of strictly financial closure. Most of the funding will be through our internal accruals, except if there would be some mismatches during a few years for that only, we may require the interim funding.

Yes. So we are not going for any project to project financial closure. As you know, Khyalia sir has already explained that we have sufficient our internal accruals. And if there will be any shortage in between for interim period, definitely, we will go for. Otherwise, our internal accruals are more than enough to meet the requirement.

Appreciate your response. My second related question is, I understand the need for states to sign baseload PPAs with coal plants. But given this incremental trend of solar plus 4-hour battery, solar plus 2-hour battery, which is coming at INR 3, INR 3.5, do you see any risk to the ordering so many plants without PPAs?

See, solar or 2-hour battery or 4-hour battery is not going to address the requirement of baseload because if you strictly want to provide round-the-clock power based on solar and battery, then you need to have 16 hours of battery storage. And even that would be insufficient. Let us say, a situation where you will have 7 days of complete cloudy environment, then no solar power is available for charging the battery. So thermal will not have any substitute. So ultimately, you need the thermal power irrespective of whether you -- whatever hours of battery you establish. So we don't therefore see that in near future, solar plus battery is going to provide you the baseload requirement. So for baseload requirement, thermal will continue to have its importance, except that if you get a large-scale nuclear power generation, which is unlikely to happen considering the present circumstances.

Understood. I'm guessing you see the same challenge with solar plus pump storage as well that when cloud cover is there, you could have lower generation. That's why you think thermal/nuclear is the answer for baseload. Am I correct to understand that?

Okay. That's correct. And otherwise also, even PSP will have a limited capacity, maybe, let's say, 50,000, 60,000 megawatts. So it is not that we can have a 4 lakh megawatt of PSP in this country.

Fair point. One last question, if I may add, that's a bit more near term. Section 11, do you see it continuing further now that demand has softened or as you highlighted earlier, do you expect demand to revive and shortages again to come back in the summer months. Hence, you see that continuing going forward?

See, we are indifferent to the Section 11, whether it is imposed or it is not imposed because our power stations are being operated, not strictly under Section 11. So our PPAs are viable. So we are not much of concern about Section 11. But nevertheless, going forward, if the capacity available in the country is sufficient, then the plants other than those who are under Section 11 can meet the power requirement, then Section 11 is not required. Otherwise, it is up to government of India to decide. But as far as we are concerned, we are not affected by whether it is there or whether it is not there.

[Operator Instructions] we have our next question from the line of Bharani from Avendus Spark Institutional Equities.

So like my question is on the power demand growth in the long term. Now even in your presentation, the power demand growth for the country by 2032, is 390 gigawatts, assumes a high growth rate of 7%. But in the last few quarters, it has come down. And what is the confidence we have that if the existing demand growth of 5% continues that the requirement for baseload thermal capacity will still be there and hence, there will be incremental demand or PPAs that is required on the thermal side? If the growth is subdued, then wouldn't the incremental capacity requirement on the thermal side not be there? Your views on that?

This is sort of a sensitivity analysis which you are asking. But since you have asked this question, we can go back 1 year or 2 years back when the projections were made based on 5% growth. And at that time, also the requirement of thermal was projected to be 60,000 megawatt. And even at 60,000 megawatts, we are perfectly okay because in that 60,000 bucket also, our capacity expansion of 11,000 is not going to, let us say, make more power available -- thermal power available than the requirement of 60,000 additional capacity.

Okay. And I mean, the situation will get worse if there are many battery and pump storage projects, which are also right now under construction, are under construction. So my worry is whether the existing pipeline of projects that have been announced by both Adani, NTPC and others, wouldn't that be sufficient for the next, say, 7, 8 years?

[ NTPC ] has already prepared resource adequacy plan for all of the states considering very aggressive PSP targets, very aggressive storage -- battery storage targets. And even that -- with that, the CEA has suggested to tie up the power by all those states who are seeking the coal from Government of India, or who have sought from Coal of India and got the allocation. So all these things are already factored into in the resource adequacy plan prepared by CEA. Both type of scenarios are provided in that resource adequacy plan. If you go through that, the most aggressive, the conservative, the delayed scenarios, all type of scenarios are provided. And the states which are planning to buy long-term power are planning based on the most conservative scenario. So even with the most conservative scenario, if that type of capacity is required, in fact, we see the much higher opportunity that if that -- even the middle scenario or the if the most robust scenario is actually going to happen, in that case, the requirement of power will go much, much higher than what we are discussing. So even in the most conservative scenario prepared by CEA, our capacity or the capacity being planned by all the thermal generators is very much required.

[Operator Instructions] we have our next question from the line of Bharat Shah from ASK Investment Managers.

Dilip, you mentioned earlier to some question that you will not need to tie up any funds for closure of any projects or it doesn't have to be tied down to a particular project because of adequate cash availability. But I thought issue is on the other way around. We will have a lot of surplus cash over the period of time. Our current EBITDA run rate is almost about $3 billion per annum and pretax profit is almost $2 billion. And if -- is our capacity target to reach 30 gigawatt there over 5-year time frame, I think we'll have a lot of actually additional cash flow available over a period of time. So the question actually to my mind is how do you propose to utilize the cash, which will be excess, rather than whether you will have cash flow need to be funded through borrowing?

Thank you, Bharat. This is -- I think this is one of the most important and interesting questions so far we are interacting with in this session. And you rightly said that -- and I also communicated that we are not going for any project-wise funding. And if there is an interim requirement, that we will look into it. The next interesting part, as you rightly said, sir, there is -- there will be a significant amount of the surplus cash flow over the period of time. And you know the DNA of Adani, and he was the best person, sir, even better than me -- far, far better than me on record that keeping with our track record and DNA, I can assure you that this surplus cash flow will be utilized in a manner that it will give the best of the industry return across we can have in future.

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management of Adani Power Limited. Over to you, sir.

Thank you. Thanks a lot, friends. Really, it was a very interactive session and looking forward to interact with you in the subsequent quarters. And then we will continue our journey of success and growth. Thank you. Thanks a lot for your time and patience. Thank you.

Thank you. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.