Gujarat Industries Power Company Limited (GIPCL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Gujarat Industries Power Company Limited Q4 and FY '26 Earnings Conference Call. This call is being hosted by Anurag Services LLP on behalf of GIPCL. From the management, we have Mr. K.K. Bhatt, Executive Director of Finance and Chief Financial Officer. Mr. Shalin Patel, Company Secretary and Compliance Officer and other senior members from the management. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. K.K. Bhatt, Executive Director, Finance and Chief Financial Officer, GIPCL. Thank you, and over to you, sir.

Thank you. Good evening, everyone. Good afternoon. Be can can it possible we can go directly to question and answer?

Yes sir. [Operator Instructions] The first question comes from the line of Preet Nagarsheth, with [indiscernible].

So the thing I wanted to understand first is that if you can help us, what is the PLF for the months of April, May and June? Or on the 600-megawatt solar project as well as the lignite plant, if you can give us a sense of that.

This conference call is for the result for the financial year, '25/'26 sales. But however, the PLF you're asking for the the thermal station, they are very good for [indiscernible] is there in case of thermal stations that is FLPP 1 and FLPP 2, both [indiscernible] of nearing to 75% SLC and SLB is also nearing to [indiscernible]. So there is no issue of running the stations at good payload factor. And regarding the...

No, no, I was saying then, sir, regarding the solar one, 600-megawatt or at Sabra, what is the update on that in terms of PLF?

Yes. [ 33.24% ].

Okay, sir. And sir, if you can help me guide me. What is the conversion of this PLF revenue, you can understand. So how do I size this up at the 600-megawatt at 33-odd percentage how much revenue should we expect out of that?

Basically, the revenue is INR 2.73 per unit. This is [indiscernible] You have to calculate separately that in serious multi-life side, 24 multiplied by capacity, you will get the 1 million units and then you have to multiply by the [indiscernible] you will get the revenue.

Okay, sir. So sir, at this through sense, could you give us a sense of how much this will be for the full financial year? What should we expect for the FY '26, '27, just based on your rough sense?

[indiscernible] You are talking?

No, I'm saying the revenue, for the 600 megawatts plant.

Would be around -- Yes, you are talking of [indiscernible] Only?

Yes, I am talking of [indiscernible] only.

The next question comes from the line of Saket Kapur with Kapur&Company.

It's INR 420 crore revenue would be roughly generated from [indiscernible].

Sir, if you could just outline to us or give us some more understanding of currently how our assets are sitting in terms of the entire portfolio. And what are we [indiscernible] in terms for the ensuing year? And also, sir, what we have been reading about is a lot of grid congestion and issue with the evacuation of especially the solar effects have been read about. So how is the company preparing itself for the same? So just if you could just give set a background to us of how are we going to [indiscernible] these solar assets part in particular. And also in terms of the thermal wherein we have also announced, I think, some new capacity additions. So some bit of thought process and some more color on the same.

Thank you, Mr. Saket. Basically, over all the stations are doing real well because we are stopping the merit order for generation life and power action-wise, as there is no issue and have the power evacuation problem may be faced at some locations, but especially thermal, we are not facing any issues as of now. And we will not face also because of the reason power expression in that region is more robust, and it is -- so there is a heavy demand of the power in this South Gujarat. Secondly, regarding the RE, our all stations, power expression capacity. There is no backing down. However, you may be referring about the [indiscernible] region; there is our question issue is there. Since the entire CFP2s still yet not ready, so there is a capacity addition has taken place, but evacuation line is not fully operational. So that issue is there and it is being allowed on [indiscernible]. But as such, we don't have any issue on 600 megawatt. We have been given the full allocation in November 2025. And we are evacuating the full load from the [indiscernible] from 600 megawatt. That is why our [indiscernible] Is 33%. So as such, we don't have any forces from VFC sales force. There is an [indiscernible] is issue at any of the power station.

Okay. Sir, out of our portfolio of 700 megawatts at [indiscernible], have already capitalize and commercialize. And on the basis of the metrics which you gave just to the earlier participants, we are expecting INR 420 crores of revenue from this 600 megawatts or also the 500 megawatt, what is the scale of the 500 megawatt?

It is only 600 megawatt.

So the 600-megawatt will generate revenue of INR 420 crores for the financial year '26/'27, that is what should be...

That is an approximation -- also a 5%, 10% go down, go up also.

Okay. And about the remaining [ 500 megawatt ], what is the status? And how will those come into play?

Basically, we are at a very advanced stage of commissioning in stage [indiscernible] and we are just waiting while the power evacuation facility being getting ready by PGCIL. I think post monsoon, there will be really -- we may be able to commission the first phase of 200 megawatts and followed by another 200, 100 megawatts in the next couple of months.

Okay. So just to give some more color, the 600 megawatts that we have, I think, already capitalized as on March. So what is the depreciation and the interest cost. If you could just give the -- just the EBITDA number for the 600-megawatt edit that would give us some more understanding or what is the EBITDA margin trend for our solar asset, if you could give the color on the same?

Just a minute. EBITDA margin would be [indiscernible] from 600 megawatt [indiscernible].

INR 355 crores, should be the EBITDA?

INR 350 crores to INR 360 crores, you can roughly assume.

Okay. That is on the revenue of INR 420 crores, we are going to exhibit the EBITDA in the vicinity of INR 350 crores to INR 360 crores?

Yes, yes.

Sir, now coming to the current maturity partner, how are we going to repay the loan, what are the current maturities or the monetary period that we have? And if you could just give us some color how is this repayment cycle going to commence?

See basically our thermal stations all [indiscernible] solar existing [indiscernible] wind is also more or less at an -- there is a portion of that is remain in the book only the 600-megawatt that is there. Interest segment payout is there and 1 year moratorium was there up to the July 2026. That is the current quarter the next quarter, we have a repayment will start. But technically, we are making the profit from 600 megawatts, and it is ballooning, first 5 years, it is less than second 5 years likely top up, then another top-up like that following repayment is there. So we don't see any issue on the repayment side also because we have the enough cash surplus being generated from the [indiscernible] 600-megawatt to repay the repayment side of the [indiscernible]

Okay. Sir, we ended the year 31st March '26 on a borrowing of [ 3,250 ] under the noncurrent liability -- so taking into account the monitoring period getting over and our event schedule, what should be our long-term borrowing number post-commissioning also, I think of the [ 500 ] will also get commissioned. But that is factored in the [ 3247 ] number. So what should be the closing debt number on the long-term borrowing?

It would be around INR 4,500 crores roughly, you can say would be the debt portion after commissioning of the 500 megawatt.

And this is after the -- after the loan, which we are going to repay for the 3 years?

Yes.

Sir, just to correct me, that when we look at our capital work in progress, that number is [ 2,000 ]. So that is already there in the borrowing. So why is the debt going up by [ INR 4,500 ] this will get transferred to the debt?

See, basically, it is in the project space right now. And that capitalization will take less and [indiscernible] following has already been the second on the lenders to the project that is also being shown in the books of accounts.

That was my point said. Why is the number going to move up from [ INR 3,200 to INR 3,500 ], when the capital work in progress is only doing capital?

We have not taken the full debt as of now. it is still disbursement is spending or is going on. So there are certain conditions of payment to the contractors based on certain -- fulfillment of certain conditions, PV modules has been supplied post March, then the balance of July work is also going on. So 500-megawatt has not yet completed on 31st March.

Okay. In with regard to the storage facility and how we are seeing that the RE player is coming up with the -- with some form of the other of the storage -- battery storage format. So if you could just explain to us what should we expect from GIPCL going ahead in terms of the battery storage foray? And what are our preface any for the same?

See, first of all, you should understand the PPA parameters, which we have entered into in June wherein uptake is being taken by [indiscernible] fullest capacity. So as such, I don't refer as of now any storage capacity. It is to be governed by [indiscernible] has an offtaker of the power, if there is a requirement of storage capacity in the RE because to maintain the grid, they'll definitely tell us to go with the storage facility in the existing projects. So we will take that to a [indiscernible], we will put the storage capacity as maybe required.

And pertaining to the new thermal power plant announcement that we had earlier. Or if you could just outline to us what is in foray in terms of addition of more capacity in the thermal space? And also, what would be the likelihood future of our gas-based plants, but now it is 6 long years that they have been standard, so what is the thought process currently of the management with respect to the availability and thereby utilization of those assets?

The station looking at the current geopolitical situation, I think it is not going to be revived now. So we are trying to put that gas capacity in the existing gas station locations, and we are using the existing the facility of [indiscernible] and other facility of evacuation towards [indiscernible], and we have already got the approval from GNL to put 20 public 120-megawatt bag and the tender is already in place. So putting the first phase of that, this is the first step. And we are also thinking to put another [indiscernible] into 160 megawatts that's in the coming year in this place. So this is the thought process of the management. regarding the utilization of the existing facility and [indiscernible] location. And regarding the capacity expansion of 750-megawatt thermal [indiscernible] in the power station. Already approval has been given by GONL principle. So going here under Section 62 cost [indiscernible]. So we have already put the tender and it is under a observation by BTL and other parties. So once we tender clear and the other is being placed by end of the current financial year or the last part of the current financial year, the rest project will start on its own for a period of 3, 4 years. Now the line [indiscernible] capacity will be commissioned by [ 31, 32 and 33 ], that is the right now target. We will definitely, we have understood your requirement and we'll definitely come to you on a regular basis. So that you will get the regular updates as may be referred.

The next question comes from the line of Kiran Mehta with Eureka Investments.

I'm very happy with this con call, and I would request management to continue this feature. Sir, just to continuing with Saket's third question. So are we incurring additional INR 1,500 crores kind of investment to commence that 500 megawatts? That's number one. Number two, just my understanding, sir, you said around INR 350 crores EBITDA from 600 megawatt, this 500 megawatt would generate another INR 350 crores and our present INR 300 crores EBITDA. So does it mean that FY '26, '27, we are looking at INR 1,000 crores of EBITDA assuming 500-megawatt is also operational by then? My last question is, sir, we have a [indiscernible], where we are establishing the solar park, and I think we have been [indiscernible] a very huge length. So what is the development of that and where we can start generating EBITDA on those projects as well? And I wish we are in a very big transformative generating INR 1,000 crores kind of EBITDA from FY '27, and I wish we have more discussions on concall.

You are absolutely correct. But this year, you will not see the EBITDA of [ INR 950 crores to INR 1,000 crores. ] Once the 500 megawatts gets commission for the full personal year Hopefully, next year, you will see these figures on the paper. Once the [indiscernible] are commissioned a whole year of operation this EBITDA margin like [indiscernible] will be there, as you rightly mentioned. And regarding Park, we have been allotted 200, 375 megawatts park or in the park, [ 1,100 ], we are putting on our own, and rest we have already given to third party to sell to the GONL and those parties are [indiscernible]. So that pet PPI is directly by the project developer with GONL, we are only the par developer say, for power restoration and infrastructure facility is to be provided by GIPCL, this is already in place, and that is available to other [indiscernible].

The next question comes from the line of Falguni Datta at Mana Financials.

I have a few questions. One is this you mentioned, just to clarify, this 500-megawatt solar plant is coming -- will be commissioned in FY '27, is it?

Not '27. It is going to commission in phase manner, '26/'27and most probably post monsoon once the work will clear up. By third quarter, it will be mostly commission capacity.

So the capacity will be commissioned by end of this financial year, the revenue will start from next year, right?

Revenue revenue will start post commissioning but initially, all the [indiscernible] problems on the issues may be there. So full operational, as you see, 600-megawatt is giving me 33% here. That figure will turn out in the next final year only.

Okay. And this INR 1,000 crores EBITDA that you mentioned is for the solar division?

No, no, it is in the including ...

Including lignite and everything?

Yes.

And the expansion that you mentioned 750 megawatt was for the lignite plant, you said?

Correct Correct.

And sir, I have 1 few questions based on Q4 results also. The other income that was of INR 42 crores versus INR 13 crores in previous quarter. So can you give a breakup of this INR 42 crore other income?

See, tally other some par from the insurance claims, which has been settled in the current financial year, has been crystallized, and we have booked and out of that one income yield from the incoming tax return -- income tax requirements in the amount [indiscernible] towards the income tax [indiscernible]. 3 various insurance claims then promotization of the volume brand. On the liquidated, I maybe to the [indiscernible]

So this user development charge revenue and the subsidy from the government and O&M revenue, none of these has come this year?

The UDC capital segment, upfront development as that is not an income. One, as you rightly said, is income -- but 1 sales will start once the asset, their plant get commission. So current financial year, [indiscernible] will start getting in the [indiscernible]

Okay. And sir, another thing was like, could you give me just the EBITDA for the -- just the solar division of our? The entire solar division, the EBITDA number for FY -- for full year FY '26?

Solar division EBITDA would be around -- you can say [ 600 ] somewhere. [indiscernible]

No, for -- no, I am asking for FY '26 year gone by, the solar EBITDA.

Last year?

Last year.

For '25, '26?

Yes, for '25, '26.

It was only INR 332 crores.

Okay, which will go to INR 600 crores this year?

Yes.

And sir, what was the PBT for the solar division last year?

You see solar division was INR 52 crores.

And another question is, sir how much of the interest depreciation increase do you expect next year?

Next year mean '26-'27?

Yes.

Right now, it is [ INR 107 crores to INR 110 crores ]. It will go double or [ INR 225 crores to INR 250 crores ] because of addition plus INR 600 crores will be there in the group. And since last year, [ 600 ] was commissioned in December. So only 1 quarter interest is being booked in the current financial year. This year, it will be total [ 600 ] plus the existing -- so it will go double form [ 250 ].

Both interest and depreciation?

Depreciation would be from [indiscernible] it will go.

It will go to 3 depreciation?

Yes.

Okay. And sir, at the peak, so the revenue from this Tara area where we have done the infrastructure work, the revenue for us, the additional revenue, which will flow or from the other operators will be only O&M, which will come into P&L?

Because other operators are going to sell or to view as per the PPA, we will be getting only the O&M part as far this comes on the [indiscernible] terms and condition as [indiscernible].

And the subsidy from the government and user development charge will not be a part of the PL, the subsidy portion and the user development charge?

These are all CapEx items. It is being captured in the books of [indiscernible] for the terms of the [indiscernible] and amortization through amortization over ...

So they will not come in P&L?

P&L, it definitely, it will come, but it will [indiscernible]

Okay. Understood. And O&M revenue, how much do you expect at the peak?

O&M revenue would be around INR 55 crores to INR 60 crores.

Okay. And the peak?

Yes.

And sir, one more question. What was the fact for the solar part in for last year. FY '26?

Yes, we are not selling any tax expense as in any of the division, taxes being taken as a company as a whole, and we are in [indiscernible] of PAT level doesn't [indiscernible]

The next question comes from the line of Vipul Shah with Sumangal Investments.

So my first question is capital work in progress that is INR 2,065 crores that pertinently the 500-megawatt project, which will be commissioned this year?

Yes.

Okay. And sir, in reply to your one earlier question, you said solar dividend EBITDA last year was INR 330 crores. And you are expecting EBITDA from 600-megawatt project of another INR 350 crores, right?

Yes.

Okay. And what will be the revenue. We are 2,375 megawatt part, and we are developing only [ 1,100 ]. So this [ 1,275 will ] be developed by other developers. But what is the revenue model here? And what type of annual revenue we can expect? If you can explain the revenue model, it will be really helpful.

See, the PA developer, our role is to maintain the part entirely wherein the revenue will [indiscernible] on the part by the of O&M and the project developer. It would be to INR 50 crores to INR 50 crores as per the terms of MNRE finalized, the O&M to be recovered from the park developer by MRI. So that income is around INR 50 crores to INR 60 crores from the park.

But will be incurring expenses to maintain the park also, no?

Yes.

So what -- so net-net, what should be our earnings from these this activity, where we just had to assessing we take out?

It is basically, as of now, we are expecting around INR 20 crores to INR 25 crores revenue generally some net of the expenditure from the park.

And that will be for how many years, sir?

It will be for 25 years till the time of PPA signed with [indiscernible]

And sir, what is our average coupon rate on these borrowings?

[ 7.8 ]

And regarding the expansion of 750 megawatts of thermal capacity, what type of CapEx will be requiring?

Around INR 6,500 crores to INR 7,000 crores would be required for thermal capacity of 750 megawats, would be around here -- we are expecting INR 6,000 crores CapEx towards the thermal of 750m megawatt.

So we'll start growing that from each year. So again, that will go up, right?

Yes, definitely, that will go up but it will be in a phased manner because the gestation period for the lignite thermal [indiscernible] to come up is nearing 3 to 4 -- like minimum 4 years. So we need to have the capacity in [indiscernible] in next -- starting from 2027 would be till 2032, '33 CapEx still with a 750 megawtt.

Okay. So considering this current debt and this debt which we propose to take for expansion of thermal capacity, what should be our peak debt?

What should be our?

Peak debt.

Peak debt would be around INR 4,500 you can roughly take.

Including thermal?

Including thermal to see when the thermal will come up. Again, it will go down. Some repayment will be there for the existing debt. Well, again, that we have to work out, INR 4,500 crores debt will be added sales but repayment will be there of these INR 4,500 crores or so. So our figure would be around INR 6,000 crores to INR 6,500 crores. At one point of time, you can add I can say it would be the R&D group [indiscernible].

And lastly, [indiscernible], are we covered for full fuel for this expansion of formal capacity, all 750 megawatts? Do we have the lignite supply covered?

See, we have the available rigs in the region to capture the requirement of the total 750 megawatt plus 500 megawatt for the entire [indiscernible] life period.

Okay, sir. And I hope you continue this practice of holding concurs regularly. And another suggestion, if you can give a presentation of all the figures which you have maintained so that we don't have to ask.

We will give it to you.

Yes. So all -- like all later generation companies, if you can give [indiscernible] really, very helpful.

The next question comes from the line of Jugal Shah, an Individual Investor.

I just have a quick question on our FY '26 number is approximately INR 1,600 crores as your top line. Can you just give us the breakdown? I know the [indiscernible] is just towards the end. So ex [indiscernible] or solar ex [indiscernible] for wind, that thermal and whatever we have contributed towards INR 1,500 crores for [indiscernible], can you give the breakdown for the revenue numbers?

You are talking about '26, '27?

'25-'26.

'25-'26, you want the revenue breakup -- revenue addition from [indiscernible]?

Outside of [indiscernible]. You mentioned that we were the 600 megawatts is not 100%, right? So if you can break up into ex Tadao, solar, ex of [indiscernible] For wind and Tagara and thermal. If you can give us a breakdown for 4 of these.

This is solar -- is for us. This is revenue is INR 152 crores when we a 5-megawatt collar is INR 38 crores. [indiscernible] INR 111 crores. So this is the revenue from the division. Revenue from SLC 1 is it is around 1 part of the [indiscernible].

Okay. And sir, what is the top line growth if we need to understand because 600 megawatt would be fully operational for this FY '26, FY '27. And again, 500-megawatt would be partially, can we expect the growth of at least 20%, 25%?

The revenue as on the top line would be around between INR 400 crores to INR 425 crores to INR 430 crores on the top line from 600 megawatt [indiscernible] a roughly INR 30 crores to INR 40 crores will be the top line addition or sales have impact. So you can say INR 450 revenue top line will be added in the existing company.

Okay. As a blended margin can be -- because I know for solar, it is higher and thermal, it would be lower. But as a blended, can we expect at least 40% margin? Because we will have more of solar into lives?

Margin means?

The EBITDA margin.