Adani Power Limited (ADANIPOWER) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Adani Power Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities Limited. Thank you, and over to you, sir.

Thanks, [ Sagar]. On behalf of ICICI Securities, I would like to welcome you all on Q2 FY '26 Earnings Call of Adani Power Limited. Today, we have with us from the management, Mr. S B Khyalia, CEO; Mr. Dilip Jha, CFO; Mr. Nishit Dave, Head, Investor Relations. We'll start with the opening remarks followed by Q&A. Over to you, sir.

I extend a warm welcome to everyone who has joined us today for our second quarter '25-'26 Earnings Call. I appreciate that you have time -- taken time out of your busy schedule to connect with us. Before we begin, I encourage you to download and review our quarterly results and the analyst presentation, which have been made available on the stock exchanges. With me on the call, I have our CFO, Mr. Dilip Jha; and Nishit Dave, our Investor Relations Head. The Adani portfolio company has consistently demonstrated their strength and resilience over the past several years. The portfolio scale in terms of investment, revenues, EBITDA and cash flows has grown by multiples. Focusing on Adani Power, I am proud to share that our company has made a significant contribution to the group's earnings growth during this period. We have navigated a range of challenges in the market, and we have emerged stronger each time. Our team has turned these challenges into opportunities, leveraging our experience and agility to drive sustainable growth. Now we are set firmly on our path to raise our generation capacity from 18 gigawatt to 42 gigawatt by 2032 with an even faster growth in earnings and cash flows. We are set to increase our market share in the thermal power sector significantly. We have won new long-term PPA bids for more than 9 gigawatts out of the 14.5 gigawatt of bids awarded by a state so far. In the recently concluded quarter, we have announced the award of a 2,400-megawatt PPA in Bihar and 1,600 megawatt in Madhya Pradesh. In addition to this, we have also won a 570-megawatt (sic) [570.5] long-term PPA for 25 years recently from Karnataka, which would be supplied from our existing capacity at Raipur. There are another 17 gigawatt of bids, which are at various stages of submission currently. Proactive steps are being taken by states and the central government to meet the project long-term requirement power from all sources. We are highly confident that we will tie up our upcoming capacities under these emerging opportunities. These PPAs will be value accretive for the company. They will enable us to generate higher returns on investment along with steady cash flows. Our capacity expansion drive is progressing rapidly. There are 4 projects currently under construction with a total capacity of [6,120 megawatts]. They will be completed in stages between 2026, '27 and financial year '28, '29. We have fully derisked our project execution pipeline with 100% advanced ordering for boilers, turbines and generators. This is largely brownfield development, and we have 100% land availability. Similarly, most of the environmental clearances have also been granted or are in advanced stage of approval. Our in-house project management capabilities, coupled with our financial strength and proactive strategy will enable us to stay well ahead of the competition and deliver projects on time while maintaining a capital cost leadership. We have revived the operations of 600-megawatt Butibori plant of Vidarbha Industries Limited, which was acquired in July 2025 within just 2 months. This plant has been shut down for almost 10 years. We have also signed a 500-megawatt PPA for this plant with Maharashtra DISCOMs for 5 years recently. Now let's talk about our performance during the second quarter of '25-'26. We have registered more than 7% growth in power sales volumes in the quarter at 23.7 Billion Units as compared to 22 Billion Units in quarter 2 of '25. The year 2025 has seen an unprecedented early ons and much delayed retreat of monsoon in recent memory. This has affected overall power demand and peak demand adversely. Merchant power tariffs have also been subdued because of the prolonged rainy season. As a result, we have achieved PLF of 62.8% for quarter 2 '26, as compared to 66.9% of quarter 2 of '25. In the first half of '26, we have achieved PLF of 64.8% versus 72.3% in first half of '25. Despite this, we were still able to post a growth in volumes with the help of our competitive PPAs, low-cost merchant plants and increased generation capacity. Our long-term demand growth drivers are intact as they are tied to India's strong economic growth. We expect our PLF to improve as the lingering impacts of weather abate and demand picks up. Adani Power posted total continuing revenue, excluding any onetime prior period items of INR 13,707 crores in quarter 2 of '26, which is a slight growth over quarter 2 of '25. Our EBITDA performance for quarter 2 of '26 is also quite stable despite lower tariff realization due to our cost-efficient operations and remunerative PPAs. The continuing EBITDA of INR 5,325 crores for quarter 2 of '26 is close to the continuing EBITDA of quarter 2 of 2025. Profit after tax for quarter 2 2026 is also quite healthy at INR 2,949 crores and similar to the PAT for quarter 2 of '25, demonstrating our tight control on debt and finance costs despite the growing scale of operations and ongoing expansion. Looking forward, we expect our power demand growths to pick up again, resulting in improved offtake under long-term contracts as well as greater traction in the short-term market. We intend to tie up more of the open capacity under the PPAs, similar to the recent 1 gigawatt of awards. I look forward to the upcoming commissioning of new capacities from the next financial year onwards, which will lead to the next cycle of rapid earnings growth. Adani Power is excited to play a key role in meeting India's growing energy demand reliably and enhancing its energy security. I would now like to hand over the call to our CFO, Mr. Dilip, to elaborate further on the quarter 2 results. Thank you, and over to you, Dilip.

Thank you, Khyalia, and good afternoon, everyone. It is my privilege to present Adani Power's strong and resilient financial performance for the second quarter and first half of the financial year '25-'26. Despite unprecedented weather conditions and slower pace of power demand growth, Adani Power has delivered a remarkably strong and stable performance this quarter 2. The subdued power demand and weakness in the tariff acted as a constraint on revenue growth despite the higher power sales volume. Total continuing revenue for quarter 2 FY '26 was INR 13,639 crores, slightly higher than the revenue of INR 13,465 crores of quarter 2 last year, a testament to our resilient business model. Total onetime prior period income recognition for quarter 2 was INR 669 crores, mainly pertaining to old matter and late payment surcharge. For quarter 2 FY '25, this item was broadly similar at INR 598 crores. For the first half of FY '26, total continuing revenue was INR 27,807 crores compared to INR 28,517 crores in FY '25. For H1 '26, prior period revenue was INR 1,075 crores, again, similar to the H1 '25 figure of INR 1,020 crores. Now coming to the cost. Fuel expenses in Q2 FY '26 grew modestly by 2.4% to INR 7, 205 crores from INR 7,032 crores in quarter 2 last year due to higher volume and newly acquired plants. For H1 '23, the fuel cost declined by 2.8% to INR 14,514 crores from INR 14,930 crores in H1 of last year. Other expenses increased by 24% to INR 814 crores in quarter 2 '26 from INR 655 crores in quarter 2 of last year, primarily due to the full period operation of recently acquired plants and additional maintenance expenditure due to scheduled overhaulings. Subsequently and consequently, continuing EBITDA for quarter 2 FY '26 it stood at solid and stable compared to last year. For the first half, continuing EBITDA was broadly similar at INR 11,076 crores compared to INR 11,692 crores in H1 of last year. Depreciation charges had increased in line with the acquisition of power plants over the last 1 year. We have maintained control of our finance cost even as we expanded our operations. As a result of the flattish EBITDA, continuing profit before tax for quarter 2 FY '26 was INR 3,298 crores against broadly similar to the continuing PBT of INR 3,537 crores of the quarter 2 of same than last year. Continuing PBT for H1 '26 was INR 7, 096 crores as compared to INR 8,020 crores for H1 of last year, in line with the continuing EBITDA and depreciation trade. There has been an increase in deferred tax, leading to a higher tax charge for quarter 2 and H1 '26 as compared to the corresponding period of last year. Consequently, profit after tax for quarter 2 FY '26 was slightly lower but very healthy at INR 2,906 crores compared to INR 3,298 crores in quarter 2 of last year. Similarly, for the first half, profit after tax was commendable at INR 6,212 crores as compared to INR 7,210 crores in H1 of last year. Our total debt as of 30th September 2025 stands at INR 47,254 crores compared to INR 38,335 crores at the end of March '25. The increase is mainly due to bridge financing for capital expenditure and working capital needs supporting our [MDCS] growth plan. Our net debt position remains steady and healthy at INR 36,776 crores. We are investing our strong and steady cash accruals into capacity expansion. We are following an efficient capital structure policy without a high reliance on debt. Thank you for your continued support. Let us now open the floor for question and answer. Moderator, over to you. Thank you.

[Operator Instructions] Our first question comes from the line of Manish Somaiya from Cantor Fitzgerald & Company.

Congratulations. A couple of questions. One, if you can just talk about the expectations on the merchant and PPA tariff realizations in the second half given softness in merchant pricing that we have seen so far.

So I'm repeating your question. So you are trying to understand the expectation of PPA and merchant price movement in the next half of this year?

Yes. If you can just give us the big picture perspective on how we should think about the second half versus the first half?

As regards to PPA rates are concerned, there will not be any change in the PPA rates because the rates are obviously the long-term rates. And if the demand is less, it is only impacting the offtake. So there is no different expectation as regard to rates of the PPA are concerned. We have an average realization of INR 5.70 per unit during this quarter. And we expect the same rate will continue to be realized because under the PPA rates are not getting much of change. As regards to merchant realization is concerned, we have achieved INR 5.37 as the rate during this quarter 2. And for the balance period, we are expecting an average realization of around, let us say, INR 6 or so, which used to be the rate in the last few years. So that is what our expectation is. Thank you.

On the merchant portion itself, I think right now, it's at 88%. [SPK] are there any plans to try to increase that so hence to avoid the volatility in pricing? And how do you think about that?

As I explained in my presentation or the speech that we have recently signed the PPA with Maharashtra for a medium term of 5 years at the rate of INR 5.55. And we have now recently received LOI from the State of Karnataka at INR 5.79 or so. So we have already tied up beyond what we said earlier around 1,100 megawatts. So if I consider in the overall portfolio, I think now it must be working out 92%, 93%, so we are taking the steps to tie up more and more under the long-term or the medium-term PPAs so that we can reduce the volatility impact. Thank you.

Okay. No, that's super helpful. I was trying to get to that 92%, 93%. And hopefully, with more PPAs, it will be higher. So I appreciate that answer. The other question I have is on the CapEx. Obviously, you have a significant pipeline, locked-in pipeline. How should we think about CapEx in '26, but beyond '26? And how should we also think about the funding mix between internal and external?

So our CapEx program we are generating a significant portion of cash flow from our operating assets. So the significant portion, we will fund from our internal accruals. In next 2, 3 years, there will be an interim -- the bridge requirement of the CapEx that we will take from market either in the mix of short term or the domestic capital market or domestic bank. So the significant portion we will fund from our internal accruals only. The interim gap, we will fund from the market. And that is in the mix of maybe a domestic capital market and domestic bank.

Our next question comes from the line of Abhinav from ICICI Securities.

My first question is on the Assam bid. Has the bid for 3.2 gigawatts been floated? What is the status over there?

You are talking about Assam?

Yes.

Okay.

So the bids have been concluded, and we are the L1 party there. The approval of the commission is also received. So we hope that we should get the positive communication shortly. So for the time being, whatever is in the public domain is that the commission has passed the orders.

Understood. The second question is, can you share the revenue EBITDA PAT numbers for the 2 acquired plants, Coastal and Amarkantak in H1?

Yes. Just give me a moment. So my revenue for quarter 2 Mahan, it was INR 1,049 crores, Tuticorin, this is INR 677 crores and Korba INR 339 crores. If you will talk about EBITDA or Tuticorin, this quarter EBITDA was INR 54 crores and then for Korba, it was INR 84 crores. And for Mahan, it was INR 521 crores. So let me repeat it again. For Mahan revenue for the quarter was INR 1,049 crores as against EBITDA INR 521 crores. Tuticorin revenue, INR 677 crores against that EBITDA INR 54 crores. Korba revenue, INR 339 crores and then EBITDA INR 84 crores. This is I'm talking about operating revenue from the plant. Thank you.

Our next question comes from the line of Shirom Kapur with Jefferies.

Yes. So as I was saying, you mentioned about 17 gigawatts of bids at various stages. Could you maybe break that up into which states are offering these bids? And what is -- if you could just quantify that state-wise?

The bids are in the public domain, which Rajasthan is 3,200 megawatts, Uttarakhand, it is 1,320 megawatts; Maharashtra 1,600 megawatts; Uttar Pradesh 4,000 megawatts and West Bengal 2,260 megawatts. So it is 12,000 megawatts. And apart from that, there are bids which are an advanced stage of finalization. Karnataka 1,600 megawatts, Gujarat 4,000 megawatt and Assam 3,200 megawatts. So if we take the latest figures, the total is working out around 22,000 megawatts instead of 17,000 megawatts because recently, Gujarat has floated EBITDA of 4,000 megawatts, which was, I think, not included in the earlier figures. So the approximate figure working out is 22,000 megawatts. Thank you.

That's very helpful. Just want to clarify. So in your presentation, you mentioned that about 91% of your operational capacity is tied up under PPAs. And if we see in the later pages, about 8.5 gigawatts of the upcoming capacities also tied up. So would it be -- is it a correct figure that totally out of your 42 gigawatts target, about 25 gigawatts is tied up under PPAs currently?

So the new capacity, which we have planned is 23.5 megawatts. And out of that 8.5 gigawatts out of 23.5 gigawatts, 8.5 gigawatts is already tied up under the PPAs. So that is a correct figure. And as I said that over and above this 3.2 gigawatts Assam with [DRL 1] and recently, we have also tied up around 1,100 megawatts from the existing capacity. That is, as I said, 500 megawatts Maharashtra and 570 megawatts Karnataka.

Sure, sir. That's helpful. Just to clarify, from the operating capacity is 18.15, how much of that in gigawatts is currently tied up under PPA, including the 1.1 that you have recently signed? If you could just give a gigawatt number to that because there's 91% written on one of your page and 88% on the others. Just want to get a clarification on that.

Give us one minute. Broadly, the figure is around 16,700 megawatts because sometimes the agreement is at the [busbar], sometimes it is at the state periphery. So there are some minor changes here and there. But broadly, it is 16,700 megawatts out of 18, 150.

Great. Got it, sir. And just last question on -- so you had a target of -- you've obviously recently up your target to 42 gigawatts by FY '32 from 30 gigawatts earlier by FY '30. So just want to understand in terms of planning, are we still on track for 30 gigawatts by FY '30, which will then ramp up to 42 gigawatts by FY '32? Just want to get a clarification on that. And of that 30 gigawatts of your original plan that was there by FY '30, how much of that portion is PPA tied up and excluding what's going to come after FY '30? Just want to get a sense on that.

So when we are saying 30 gigawatts, that means it is addition of 12 gigawatts. So I think that should be -- that must repeat it to you. So we are talking addition of 12 gigawatts and then another addition of 12 gigawatts, so roughly 23.5 gigawatts in total. And the first 12 gigawatt is very much on track. We are going to -- let us say, commission in next year around 3 gigawatt. Thereafter, we are going to commission 2.4 gigawatt and next to that year, 3.2 gigawatt and '29, '30 7.2 gigawatts. So we are going to commission more than the capacity of 12 gigawatts, which was planned earlier. In fact, from the second stage of 12 gigawatts also to some extent, the capacity will get commissioned before '29, '30. So there is no issues as regards to commissioning of first 12 gigawatt is concerned.

Got it. And of that...

Yes, this PPAs, which we have already signed are part of this up to '29, '30.

Okay. Understood. And sir, if I could just squeeze in one last question. Just on -- you've already ordered out your entire 100% equipment for the upcoming 23.7 gigawatts capacity. Just want to understand how much of -- would you able to share how much of this has gone to BHEL and how much to L&T, a rough split would be helpful.

I can give the broader number, not exactly. We have given 8 machines to L&T, 8 machines of 800 megawatts and balance to BHEL.

Our next question comes from the line of Aniket Mittal from SBI Mutual Fund.

A couple of questions on Godda. So first is -- I think, got the approval to connect Godda Power Plant to the Indian grid. Just wanted to understand by when can we get connected to the Indian grid, what's the process going forward? And also corollary to that, once we do get connected, would we be allowed to sell power from Godda to the Indian market despite being in a PPA with Bangladesh?

We are expecting that it will get connected by December 25. And as regards to your second question is concerned, it is allowed under second conditions and the second conditions are already mentioned under the regulations that when you can sell. So the conditions are either there is persistent no scheduling from the Bangladesh because of they don't have demand or there is a payment default under the PPA. So in these 2 conditions, we will be allowed to sell the power in the Indian grid. And these are the precisely 2 conditions in which we would also like to sell. Otherwise, why should we be interested to selling in the Indian grid. So perfectly, it is basically going to address the issue -- so because of any reason, if the power is not being scheduled or because we are not getting the payment, so both the conditions will get addressed. Thank you.

Got that. That is helpful. On Godda again, if you could tell me what was the PLF for the second quarter? And at the end of 2Q, what's the total receivables now for Godda?

So PLF was 72% at the end of the quarter 2, which was 73% last year. So the PLF is more or less same and PLF for Godda is much better than the Indian grid, because in Indian grid, the PLF of most of the thermal power project is between 60% to 65%. And as regards to outstanding payment is concerned, it is outstanding of only now 1.5 months. In any case, 1 month is not due. So out of the overdue, it is only half months overdue. Thank you.

I understood. Understood. Just on the bids part, I mean 2 bids that I remember were in fairly advanced stages was the Rajasthan and the Uttarakhand. If you could just provide your estimate of time lines on where the bids are for these 2 states? When do we expect finalization to happen?

I don't think we can estimate anything on behalf of states. We can only give what is the present state. So in case of Rajasthan, I think the bid submission date is in the next month. And in case of Uttarakhand, the documents are under approval of the regulator. So that is the present status. Thank you.

Just one last question. You mentioned earlier in your comments that the merchant tariff this quarter was about INR 5.37. Just to get a comparison, what was the same for the same quarter last year?

Last year, our average realization for same quarter was INR 5.88. And this year, it was INR 5.37. So roughly INR 0.50 lower realization has been in this quarter.

Understood...

This is approximately 10% of the [indiscernible] tariff.

[Operator Instructions] Our next question comes from the line of Vipul Agarwal, an investor.

Congratulations for a stellar performance in Q2 and H1. I just wanted to -- sir, 2 questions from my side. What is the total estimated CapEx for the 23 gigawatts expansion that we are planning now?

You are asking for the total the 23.5 gigawatts capacity?

Yes, sir.

So it is approximately INR 2 lakh crores.

Right, sir. And you already answered the [GRE] question. Second is out of the additional 23 gigawatts capacity with regards to fuel linkages, have we been providing fuel linkages along with the PPA or we will be applying for the fuel linkages?

No. Since we have already stated that we will be tying up through the PPA, then nowadays, every bid is coming with an attached fuel linkage to the state utility. So for all this capacity, fuel will be provided by the utility under the bid.

Okay. And third question would be, sir, these -- the new PPAs that we would be signing will be capacity charge for the fuel -- fuel charge will be passed through. It's not like a single levelized tariff that was -- I mean, because of it we had issues with Mundra, et cetera, earlier.

No, this -- under the new standard bidding documents, you have to quote for only first year. You are not allowed to quote for 25 years, any fixed number. So therefore, on the first year, the number you have quote. And in case of fuel, it is completely passed through based on a formula, which includes the station heat rate, et cetera, which are the operating parameters. And capacity charge, there are slight variation in different states. So in some of the states, the capacity charge will go up by 30% of WPI and 2% every year reduction, whereas in a few states, it is up by 30% of WPI and 1% reduction. So more or less, the capacity charge will remain stagnant and fuel charge is passed through.

Okay. Last question, sir, there was a news report dated 11 September. where the management has given a guidance of reaching INR 70,000 crores EBITDA in 6 years. So this is accounting for the entire 42 gigawatts capacity or this is just for the 30 gigawatts?

Yes. Mr. Agarwal, actually, this was a media report. The management has not given any such guidance. So it was the media's own analysis on the basis of which it was given. But I think we would hope to actually achieve a better EBITDA than what they had projected.

Actually, I think that report was based on 30,000.

Our next follow-up question comes from the line of Manish Somaiya with Cantor Fitzgerald & Company.

SPK, I think you mentioned that you have preordered critical components for the expansion pipeline. Can you give us a sense of pricing on the equipment vis-a-vis what you have paid before? I assume it's going to be higher, but just trying to understand if it changes the return dynamics because of the inflationary nature of what's transpired on equipment costs. So maybe if you can just help us with that.

I think it will not be -- it will not be appropriate to discuss about the pricing of the equipments on a public platform. So I would not be in a position to give exactly pricing of the equipments because that will be, let's say, not appropriate giving that type of numbers. So these are obviously confidential information and in the competitive market, it is not appropriate to disclose these numbers.

So let me ask you a different question. In terms of the delivery of the equipment, I assume that, that's going to be meeting your time lines based on the conversations you have had with your partners, that is something that we can feel comfortable with, right?

Yes. The deliveries, which we have agreed is ranging from 38 months to 75 months in total, and these are staggered deliveries, and we are confident that we will get the deliveries as per this time schedule because 4 projects, as we mentioned, are under construction and all the 4 projects are ahead of the time in terms of delivery as well as execution. So we are very confident that we will get the deliveries as per the agreed time schedule. And therefore, there is no likely hood of any cost overrun.

[Operator Instructions] Our next question comes from the line of Nirav Shah from Geecee Holdings.

Most questions are answered. Just last one question. Sir, we have commissioned the Dhirauli mine, and there was an incentive of waiver of the Cess. But now in this -- the Cess has been already completely waived. So now in what form will be incentivized on the mining?

So Dhirauli mines, the Compensation Cess is one of the activity. Apart from that, Dhirauli mine is actually -- it is very nearer to our -- the plant, Mahan. So there, we have already one operating unit, 2 more phases are coming over there as an extend by arrangement. So Compensation Cess is one aspect. Apart from that, there will be huge logistics advantages in terms of Dhirauli mine. And for Dhirauli mine, we are expecting that by end of this year only, the box cutting will be there. And from next year, we will have coal from that mine.

So the incentive of -- if we consume the coal within the state, the INR 400 incentive that was there, I mean, now it will no longer be there. Is that fair to say?

No, there is no incentive so far Compensation Cess is concerned. Compensation Cess is driven by the GST Act, not by any state incentive.

Okay. So the incentive...

It was a comparative, let us say, incentive, not in real terms incentive. And as per the new structure, there is no negative impact.

But no positive, that's why it's neutral.

In most of the domestic market, the impact is positive. But since the positive or negative, the change in law is to be passed on to the customer as change in law. So to the company, it is hardly anything.

[Operator Instructions] Our next question comes from the line of Nikhil Nigania with Bernstein.

I just had a couple of questions. Number one, it's interesting to see so many tenders coming for thermal, even from renewable grid states like Gujarat who are also out of battery tenders and battery prices are going low. So wanted management's view on what do you think is driving it? I mean we understand the need for baseload power, but it's still surprising given states like Gujarat, as you said, have also started reaching out for thermal PPAs. So I appreciate your view on that.

What is the question?

So given how cheap the renewals...

Please continue.

I was just saying, given how cheap batteries have become and renewable as well together with batteries, so I was finding it surprising that so many more thermal tenders are coming even from renewable rate states like Gujarat, which you mentioned, is also looking to do a thermal PPA. So wanted your view on what is driving this strong demand for thermal contracting of late?

So I think yourself has commented that it is for the base load. So obviously, the thermal is for base load. And the tenders for battery, whatever has come so far are of, let us say, for the token quantum, it is not really going to meet the base load requirement. Even the Government of India's projection of installing batteries up to 2030 is a fraction of the total demand. So it is expected that the thermal will only be supplying the baseload power. And therefore, every state is coming out with a tender for the thermal projects supply. And if you will see the resource adequacy report of Government of India, they have provided all these resources, whether it is solar, whether it is wind, whether it is battery and thereafter have worked out the requirement of thermal installation. So the tenders which the states are coming out, they have already considered the possibility of installation of battery and the tenders are coming after considering the battery plant under these studies.

Understood, sir. A related question on that, most of these tenders, are you seeing a need to set up the thermal plant within the state? Or are they fine being it somewhere else and you get the coal resource allocated to the state?

Every state is taking its own coal because there are many negatives and positives having the power station in the state or at pithead. If you install a power station at pithead, you save in the transportation cost, but then you pay the transmission charges and losses. Apart from that, states are also evaluating if you put up the power plant in the state, you get a huge amount of GST, not only on capital expenditure, but also during the operations because GST is the consumption-based tax. So in whichever state, the ultimate product is consumed. So in case of operations, the coal is consumed in the state if the project is installed in the state. So there's a huge benefit of GST revenue on the CapEx as well as OpEx. There is a huge possibility of the employment generation as well as the installation of ancillary industries in and around a thermal power project. So these are the benefits. On the negative side, if you put up a power plant in the coal-bearing states, every state is asking something at variable cost. So like in case of Chhattisgarh, it is 5%. In case of Odisha, it is 12%. So if you supply 5% or 12% power at variable cost. That means the capacity charge of that quantum has to be loaded on the rest of the power. So these are pluses and minuses of putting the power plant at the pithead or within the state. So every state is taking their own calculated decision. Thank you.

Understood. Appreciate the color. The last question I had is related to the point you brought up. So now GST has increased, but Cess has gone away from coal. So net-net, for most plants, we should see a reduction in fuel cost. Has the discussion started from states to reflect that as change in the tariffs or not at present?

So it is different position from state to state. Some of the states has issued the change in law notice and some of may be issuing in due course because it has happened last month only. But in any case, because it has happened, so from the date of notification, in any case, it has to be passed on. So that is only a process part where they have to issue the notice of change in law and then they have to file a petition before the regulatory commissions where they have to get it determined. And CRP, as you may be aware, has already initiated Suo Moto petition to pass an order in this regard.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for the closing remarks.

Thank you very much for the time and presence to listeners, and we hope same level of cooperation in subsequent quarters. Thank you. Thank you very much. Have a great night. Thank you.

Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.