JSW Energy Limited (533148) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the JSW Energy Limited Q2 FY '22 Earnings Conference Call, hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from DAM Capital Advisors Limited. Thank you, and over to you, sir.

Thank you, Faizan. On behalf of DAM Capital, I welcome you all to the Q2 FY '22 Earnings Call of JSW Energy. From the management, we have Mr. Prashant Jain, Client Managing Director and CEO; Mr. Pritesh Vinay, Chief Financial Officer; and Mr. Ashwin Bajaj, Group Head, Investor Relations. We will start with brief opening remarks followed by Q&A. I would now hand over the call to Ashwin -- over to you, sir.

Thank you, Mohit, and thanks for hosting the call today. Good evening, everyone. This is Ashwin Bajaj and it's my pleasure to welcome you to our Q2 FY '22 call. As Mohit has introduced, we have Prashant Jain and Pritesh on the call. So I'll hand it over to Prashant for his opening remarks, and then we'll take questions. Over to you.

Thank you, Ashwin. So power demand in the quarter 2 was up by 9.9%. And in -- similarly, we saw in quarter 1 power line up at 16.4% and the entire actual [indiscernible] 13% power demand growth. First time, we saw the power demand touching [ 300 ] gigawatt in the month of July. In the first 27 days in October this year, power demand is up by 3.3%, which is year-on-year. But if you look at FY '19, it is 14.4% up. So we are seeing the robust stream in the power demand. And that is also reflected in our [indiscernible] market in the merchant. During the quarter, the merchant volume was up by 32% for the country at 6,000 million units. At JSW energy also the overall net dilation increased by 3% during the quarter. Total final generation they were also up by 4%. Wangtoo hydro commissioning was down by 1%. In terms of the long-term sales, which was flat at 6,200 million units, whereas the short-term sales in the merchant market was up by 116% at 236 million units. The similar trend of continuing in the month of October also. The first 25 days, we were the largest seller of the power in the entire merchant market. During the quarter, our EBITDA was up by 10% at INR 1,080 crores, which was primarily due to the higher [indiscernible] as well as recoveries in late payment surcharges. Our profit after tax was at INR 339 crores, but if it is adjusted, that is INR [ 418 ] crores. So the CBD we saw the rev growth of 22% at INR 604 crores. Our estimation sees around for a downward trajectory, year-on-year, 19% down and quarter-on-quarter, 7% down. Our net debt was also lower by 1% during the quarter at INR 6,500 crores with a average interest cost of 3.04%. Now as far as the growth of the company is concerned, all the [ new ] projects are moving on track, at 2.5 gigawatts. We have completed more than 50% tunneling for 10 kilometers to our Kutehr project ahead of the schedule. The pace at which this project has been built the decision comes through the asset over projected in the country for any hydropower plants. With respect to the Solar & Wind plant, we have already other owned equipment and construction work is going on for other 225-megawatt solar power plant. We have already started receiving solar panels, and they are being installed at this point of time. And the commissioning of the project will start on the Q4 of this financial year. For our Green Hydrogen project, the scoping work has already started with in terms of the technology selection, working with OEMs with also the partners who will be sourcing hydrogen or steel production of [indiscernible]. And we believe that once the scoping of the [indiscernible] is completed, we will be ready with the pilot sooner or later. We have also started taking concrete steps in terms of the intermittency solutions as we discussed last time in line of that and developing a large pipeline of intermittent solutions, but first 1,500 megawatts of the hydrogen [indiscernible] came was find the government of Maharashtra. And similar, some of the projects are also being developed so JSW Energy [indiscernible] battery stated solution as well as hydroponics solutions to provide an integrated solution to a round-the-clock green power. Also company has already appointed the legal advisor, tax advisor, the financial advisor for reorganizing our [indiscernible] energy business. And we are expecting in a couple of weeks, the final scheme will be presented before the Board and once the board approves it the main presentation will start to unlock the value. With this, I would like to open the floor for the question-and-answer session. And I take this opportunity before closing my remarks to wish you and your family a very happy Diwali in advance. Thank you.

[Operator Instructions] The first question is from the line of Mohit Kumar Art from DAM Capital Advisors.

Firstly on the reorganization of gray and green. What are the time they're looking at? And what are the splits after the board approved, we as investor will get to know more about it? And then the other question is the hydrogen thing will be part of green, what are the projects you are looking at in the next 12 to 24 months, which you believe which can become ready to start some work?

I'll take the second question, and I'll ask Pritesh to answer the first question. As part of the reorganization of the business, whether it is renewable generation by hydro, solar, wind, also the [indiscernible] solution are [indiscernible] and that is the way the hydrogen is storage. The Green Hydrogen and green ammonia initiatives, all this will be part of the total green business. The only great power business will be having only the thermal business, which is right now Ratnagiri, Vijayanagar and Barmer. So this is how the reorganization will be happening. And any other future venture also, which is with respect to out of the generation or any other specific initiatives with respect to this, which is ESG-compliant and green will be a part of the entire green vertical. And Pritesh, would you like to answer on the timeline?

Yes, sure, Prashant. Mohit, if you just take a step back and you look at the way our corporate structure is today, we have of course, some business in the parent company, and we have another wholly-owned subsidiary, which is a Barmer, which is a thermal asset. We have a separate JV, which is a transmission asset. We have hydro 100% sub, which in turn has a sub of [indiscernible] project. And then we have currently the [indiscernible] that future energy, which is when you call Solar Energy, which is basically the vehicle for all our Wind & Solar initiatives so far [indiscernible]. So last time, when we have shared that the real purpose of reorganization was to have one vehicle within best ones and below JSW Energy, which will have much on the green initiatives, and as Prashant rightly clarified that not only from the generation point of view, but all the new energy initiatives both on storage as well as hydrogen point of view. So I would not be able to present an answer specifically to everyone. But typically as a norm with these kind of things, the idea is to see that there is going to be the most efficient way from income tax [indiscernible] company VAT or other regulatory approvals, et cetera, point of view in order to do it in a most efficient manner. And typically, there will be elements which will involve a scheme of arrangement to an NCLT cost, et cetera. So I can give any generate response. But as Prashant is saying that the advisers have already presented the options with the board kind of in cognizant of. And hopefully, in the course of -- in due course, we should be able to -- going back to the board with a full proposal after making sure that all the corporate entities are cross. Post-early making new disclosures to the stock exchanges.

One clarification, have you signed the PPA for the Kutehr project with the [indiscernible]?

That is still under the finalization, Mohit. We hope to get to that line the cropping line hopefully sooner rather than later. It's a procedural matter, not the [indiscernible].

Understood. And sir, one more question on the as far as the merchant capacity concern how much in capacity. Do you expect that capacity to reduce with the new steel plant up and running in the [indiscernible]?

So right now, 13% of the total capacity is open, and we are happy to have 13% open capacity as we are speaking. So -- but yes, we have a long-term strategy as and when we find out the opportunity to tie it up, we will be certainly do it.

[Operator Instructions] The next question is from the line of Apoorva Bahadur from Investec.

You said that suppose separation of gray and green businesses, all the ESG compliant businesses will remain in green. But should I read this that this sort of also will enable us to foray into gray businesses if need presents itself, particularly, say, for example, the Barmer expansion [indiscernible] use?

As of now, our state strategy is that we are concentrating only on the renewable power business and that's what we would like to do now. But if at some point of time, if 2 companies are separated and this will probably disconnected then I will not be in a position to comment about that at that point of time.

Sure, sir. Makes sense. So secondly, on this basically allowing the private coal mine or some sale of colder third parties. Does that help us in [indiscernible] in any way or no possible from there?

Yes, as it makes sense and it helps. So it is suggested in law now to make it soon. And so we are working with perspective government authorities to look into that.

Sir, what would be the quantum if under the sale commences?

So as of now, 3 million tonnes of [indiscernible] can be sold at normal clearance. So that's the opportunity, but it is subjected to the various approvals that government of Rajasthan agrees.

Okay. Sir, just one last question from my end that is on the battery storage part. Do we see any opportunities crystallizing as of now? Or are we participating in any of the government tenders?

So I see a large opportunity which will crystalize in time to come. And so right now, some vendors are being crystalized and they will be coming into place. But at this point of time, the costs are pretty high, and these will be the exploratory tenders, but the [indiscernible] capacities to come, it will take at least 2 years. With that, we will be seeing a lot of storage application. But I see no potential on Hydro Storage as compared to the Battery Storage solution because that's a shelf life and also the environment in nature and third is cost competitiveness. So once the Hydro Pumped Storage build, the life is 100 years, whereas the Battery Storage system life will be 6 to 7 years. So there are mainly a number of cycles, which can be used sort of charging and the charging for a lithium ion battery. So the costs become high for them.

Okay. So in light of the MoUs with Maharashtra which we have signed. What type of time lines can we expect for a possible indication?

So these are the projects which will be built for the grid, like there will be very sticky projects, which will be coming. This projects is not for the government of Maharashtra. We have signed MoU allocation of the [indiscernible]. Now we are taking environment clearances and there is an acquisition, which have been started. So over a period of time, we kind of just will be seeing the length of the days. Because once the large capacity of the renewal capacity is coming up, then intermittent solutions needs to be solved.

Understand. Well capital cost would be similar to normalize the project?

No. No, maybe 20% to 25% of that.

[Operator Instructions] The next question is from the line of Sumit Kishore from Axis Capital.

My first question is regarding the [indiscernible] position as a seller in the emerging market. So what proportion of your power is giving to the exchanges and what is the mandatory contract? And in that long-duration contracts, I'd like to [indiscernible]. Do you think that in a mandatory market would be something of the past from now because [ LDT ] providing option on the [indiscernible] a few months earlier?

I don't think we will be seeing in time to come the merchant market only. So over a period of time, once this all capacities get crystalized, it will be a long-term market in India. So I absolutely differ from some of the queries, which are these looked around that the PPA will be over permanently on the [indiscernible] and this will only be a merchant market. I think this all has happened because of certain overcapacity which came up without any PPAs leading 2005 to [ 2000 ] mid timeframe where people conceptualize the project based on the merchant market and a lot of funding happened for those projects and people came up with [indiscernible] it. Now good projects have been tied up over a period of time and now balance some of the capacity will get tied up, whichever is timely because most of the projects which were under construction, they died down, and they are sitting in NCLT as a bad debt at this point of time. And some of the projects which are operating, the debt capacities are getting tied up. Like if you look at JSW Energy, was having 55% kind of of capacity in 45% of merchant. Today, we are only 13% merchant. And we will also tie up. Now the last 5 years, no capacity has been built on merchant and right now also nobody is building it. So once this all capacity gets built up and get tied up, then there will be no merchant market in this country. It will be only the long-term market. Who's going to set up of 25 years in merchant market power plant will make the investment today and then wait for a merchant to decide. So no lender funds, no [indiscernible], it's all mix, which is being created by some people.

The share of the short term market, which is maybe 12% of the overall market in your opinion will still remain in this range? And...

Everything because given the choice, you talk to any seller in the market, he wants to buy a fixed capacity if there is a long-term buyer. And all these people will do kind of. Like look at the situation 2 years ago pilot auction was done by government of India. There was no paper at [ INR 3.25 ]. All PPAs were signed once this active prices happen. So once the shortage happens, look at the situation every year, only 10 gigawatt capacity has been added up in this country, which is renewable, which is equivalent to 2 gigawatts. Actual power demand has been growing 9, 10 gigawatts. So last 5, 7 years time frame around 35,000 to 40,000 over capacity there. And this was the capacity which was voting in the merchant market. Now once you are seeing this kind of economic recovery, that is all [indiscernible] capacities that are closed. They will get the coal linkages, they will get the coal from the commercial mining or the mines which are going to source the coal from the Captain mine, which is Government of India has allowed. With that basis, people will try to tie up this capacity. And once they tie up this capacity, merchantable market will dry up. And no new investment is coming not merchant. That's how we look at.

But why are you seeing 25-year long-term PPA or auctions happening to absorb that capacity for the last couple of years on the order 25 year PPA?

Sorry, your line is bad. I could not hear you. There is a lot of issue with -- I don't know if you are on speaker. Can you please speak on the handset please so that we can hear you clearly.

Is it better now?

Yes.

Sorry for that. So I was saying that in the past 12 months, we are wise to see any states asking for 25-year PPA. So you typically suggesting in the next 20 to 24 months, there will be multiple sites coming out with requirements for the 25-year PPA?

Once the short end will start happening, PPA will sign up for it And I believe the shortage was, we have just seen the tip of the iceberg what happened in the month of October because there was no investment has taken place in the power sector. It's all -- it's not about the [indiscernible] shortage, which we have seen. It's about the low which has come up on the thermal power plant. Look at we have 100 megawatts of renewable capacity, which is operating at 90% U.S. as a nationwide, which means you are talking about 19 gigawatts of actual supply, which is being done by renewable power. 45 gigawatts of the hydro power plant, which is running at 49%, 50% PRS, which gives you another 21, 22 gigawatt. Effectively out of 225 gigawatts of the thermal power plant, approximately 45 gigawatts is out of function because of gas, [indiscernible] as well as the thermal power plants, which are -- because state government not having enough coal. So from there, the 200 gigawatts of peak power demand will be less. So now the coal prices has happened because the demand is really -- has come up. And coal price in the growth market went up substantially to the power plant, which was dependent on the imported stock of commission because it was not viable for them to improve OLED. As to unit power and supply in the market, and that's what some of the power plants stopped. Once they stopped, one side the conditions are going down, another side the domestic coal requirement was going up. Thirdly, there is 65, 70 gigawatts of the captive power, which is generated based on the imported coal by the industry. The big [indiscernible] with a large steel plant, cement plant, confocal. We started switching over to 6 crores. So more and more pressure came of the domestic coal. Once there has been increase in production as some this year as compared to last year. So the question was on coal, what is the caption price and the imported price, everybody moved to there. But the actual problem is there is not enough capacity.

Got it. okay. And moving over the quarterly results itself. Just 2 questions there. The INR 150 crores in the September quarter, the some composition of this other income, how much is a income -- What is the total liquid cash balance in investments on the balance sheet? And second one on tax, the tax rate seems to be high and it is something that we need to look into it.

So I'll ask Pritesh to take this.

So with -- sorry, we lost you for a brief time. During the first part of your question. I got the other 2 parts. So one is on the other income and on the tax rate. What was the first part of your question?

Actually investment on the balance sheet? And what is the composition of that other income? Is it all treasury income?

Yes, yes. Sure. See, so the cash balance at the end of the quarter was about INR 1,777 crores as also mentioned in the presentation. And if you look at the tax rate, you're right, the tax rate is a appearing higher. But the way you look at it is [indiscernible] look at is are happening. One is hydro business, of course, is seasonal at, how do you [indiscernible] because of [indiscernible] and hydrology in the first half of the year, and it reverses in the second half of the year. What has happened in the hydro business is that if you recall our disclosure of the first quarter, we had done a USD 500 million bond issue in the month of May. And because of that, when the proceeds came, we prepaid the existing coupon loans. And there were onetime charges that got the [indiscernible] book on account of the prepayment charges as well as the adoption of the unamortized cost for that growth, that was amounting about INR 92 crores that rose in the first quarter. So as a result of that, what is happening is, is that the effective tax rate and the hydro equity is going up because [indiscernible]. So one was not able to give a tax sheet on account of this provision that was done or the one high bid that was done in the books of INR 5 crores. But that is going to be normalized during the course of the year. So if I were to kind of help you go through there at end of the day, what should be the effective tax rate on a consolidated basis, utilize. What is the rate is is that as you see the last 3 years on an average on a consolidated basis, our effective tax rate in the ballpark of about 25%, plus minus something in a given year. We should be largely in that range for the whole year as well. So I think I'll explain the tax part. The other part of the question that you asked on the composition of the other income, right? Now in the other income, there are essentially 2 components which are material. One is the one is case in green [indiscernible] on account of the [indiscernible] because of which we have got INR 57 crores of income has been booked on account of that. This is basically a good thing which is coming around the really tax rate at which the NPS needs to be paid, whether the difference of between SBC versus what the PPA held. We had only won it in last time NSPs calling a [indiscernible] has adjudicated on that. So that is one. The second component is there was a higher dividend income beside from [indiscernible] because of the shares that we only give it. So roughly INR 89 crores is explained in the other income on account of this for the quarter. These are the 2 large.

Okay. So largely the other income of INR 150 crores is explained by the 2 items?

Because when you are talking of INR 150 crores, I'm assuming you're talking at the half year, right?

September quarter in [ 1499 ]...

The next question comes from the line of Subhadip Mitra from JM Financial.

My first question is with regard to the domestic coal supply cases that we have seen. And a few position data seems to show that coal supply seems to be finally in place and demand is flattening. So probably the plant cost that is starting to happen. So in your view, do you think we are over the pound and we may see those toll supply prices tapering off in ahead?

Not at all. Because there is not a coal crisis. This is what I just explained, this is the power capacity crisis. Demand has moderated because of the flexible season, number one. Number two, there is a lot of imported based power plant, which has started because some of the states agreed to buy the power, the higher tariffs -- from those power plants. So we started with the higher fuel costs. We started an increasing the supply. And that's the primary reason. These 2 are the primary reasons because of which you have seen a moderation. As soon as the demand starts again picking up, you need more and more capacity. See right now also, like this year also, you are seeing what kind of a capacity we will be ending up seeing 10 gigawatts of the renewable capacity. In active you see an power demand is up by 10,000 megawatt. So from there, every year, power demand is growing from where the capacity will come up. It's not about coal. No.

It's more of a demand issue, but not a coal issue, so that's your point?

It's not the coal issue, it's a capacity issue.

Secondly, sir, with regard to the international coal prices, as it any sense of whether you see that flattening out going ahead?

Yes, the coal power, the thermal power -- the thermal coal prices have already started coming down. On 15th of October, the API coal index was $280. Today, it is $140. So it has just become 50% the last 18 days. And so the thermal coal prices are coming down.

Another point being, we've seen power prices in China as well. And from what we read at least in the international media is that will also have a cascading effect in terms of module supplies and modules of production as well as costs. So I just wanted to get your sense on how do you see the module pricing and supply timing of.

There's a very tough call for me to tell you that what will be the trajectory. And, but what has happened is that in the last 6 months, 7 months, the module prices have gone up from [ $0.18 to $0.29 ]. And that's where we have been always very well concerned about the kind of trajectory competitive bidding, what some of the people happened with [indiscernible] making the bid activity [indiscernible] out to just make the book and which are not at all sustainable. And that's precisely the point that the bid happens at the continue that we did the project. And that's where the shortage is coming all of us. So eventually, the government of India has initiated to build a large capacity in the country. And then under the new PLI scheme, close to 10 gigawatts of new policy respond to the use capacity will be built up. So I believe that the 10 gigawatt of capacity will be up and running in next 24 to 36 months of time. And for that, we will see a lot of stabilization because India can produce that which had very new thermal power plant and what exact power the low cost capacity, and then we can be out of this problem. So I believe that this 10 gigawatt capacity will go up to 30, 40 gigawatt and then that's sort of the capability we need. And some of the large players themselves are individually contemplating 10 gigawatt each. So with this first PLI scheme I believe that the part has been driven. And in next 3, 4 years, we will have large capacity in the country. And till that time, we will have to deal with the price variation. We'll be over some of the details.

This was really helpful. Lastly, as you were mentioning earlier that the current prices on the, let's say, power supply side and a merchant prices have been going up, should induce this form to start coming back to the medium-term or long-term PPA market? In your discussions with various responses do you see any move by the response and planning the medium-term or long-term power?

So I see that the [indiscernible] will start happening, whatever residual capacity is there. But no new incremental capacity will be coming from thermal side. So all incremental capacity will be coming mainly from the renewable side, and that is completely PPA tied-up. And no new project is being paid out. So even the funding doesn't happen. So only the existing open capacity is there, which will be certainly tied up in the next couple of years time frame.

The next question is from the line of Anuj Upadhyay from HDFC Securities.

And probably you have already answered this question in the Q&A. So I just want to know, does we participate in the recent site in the stock market, but all if you saw maybe starting to last week of September and because of October and if you can do this? And how those are actually pulling us now? Do we have -- I mean the international coal prices are still viable. We got out and sold in the current market on this front? And secondly, would you -- can you please elaborate a bit on the NAV, which we have signed with the Maharashtra 5 gigawatts being an 1.5 gigawatt of hydro power.

So we were having the good coal inventory at a very low cost, so and we took the advantage of the good environment in September and October. And right now, the demand is subdued, but the core subsidiaries the demand on an as soon to go up. And in total fuel based power plant as the best place to capitalize on to merchant market to contact the minimum supply side constraints are there. And the imported fuel price moderate, which is further helpful for the company like JSW Energy. With regards to the MOU that we have signed that we have been explaining that we have been securing the resources, which is particular locations where we would like to build the projects in these certain times because in India the most difficult part is to acquire the land and test the [indiscernible] and connectivity, and that's what we have been building on. So we have been doing this in various states, Rajasthan, Tamil Nadu, Karnataka. And now we have turned with newer kind of opinion in Maharashtra also. And some [indiscernible] positing the allocation of a particular site, which we have identified. And there, we will be bringing 1,500 gigawatt of Hydro Pumped Storage. Right now, we have started betting on environment and acquisition, and then over the period of time detail project and which will be supplied to safety for the [indiscernible] platforms. Like right now, we are seeing that new IFC has been gated storage commission, which is 4,000 megawatt hours. So like that, there will be the great, great commissions that will be coming, and we will be supplying power in certain time, and certain power in the peak time. So that's how the [ grid] will get stabilized from and then [indiscernible] solutions will be coming -- Because the trade-based solutions are economically as individual solution is a economical -- So that's how we are doing this kind of figures.

Got it, sir. Any view on the time lenght of the execution on the product side or [indiscernible]?

Yes, it will take time. We will see that as and when the bids come, we will be able to participate because once you have the resources, we can turn around very quickly. So execution doesn't take time. The real time takes it in getting the resource, getting the band, getting the connectivity, getting the clearance, that takes more time. Execution takes more time and big season coming. So first is we don't want to first win the trade and then start looking for assets and connectivity in line of vision and then we don't build a future, which is the difference between the most of the companies and as we started raising the project immediately after we secured the deal. And now it is going into the commissioning. So the turn around time is still there.

We'll take the last question from the line of Sandeep from Edelweiss.

2 sort of questions. First, so I believe that about our [indiscernible] capacity, we have kept it open in terms of advantage of merchant prices. So I mean the merchant prices have been volatile, but what according to you is the likely trajectory, most of them is 6 months to 1 year? Is it going to be somewhere between [indiscernible]? How do you see that? What was your expectations?

I'm not sure I will be able to answer you that what will be the prices that I can say that power shortage is going to stay here for a couple of quarters. And prices will be ultimately a function of demand and supply. And I see that not enough investment has taken place in power sector in the last couple of years. And because of this, we will be seeing the power shortage in time to come. And that [indiscernible] crisis.

And then that will ultimately move to the refining of the PPAs. That is of the interpretation, right?

That may happen. But I'm sure that when we do last time see that in spite of running a PPA at price this from agreed to buy at a much higher price from the company within the PPA. And we in a special approval will that happen?

Yes, that's to go some -- I take the point, but then they had kind of obligation that's what they said. So that was an [indiscernible]. So my second question is do you actually sort basics right now just about 0.5% or 1%. You told that we are going back to [ 2,011 ] tones when the fee deficit used to be about 20%, 11% because India being a [indiscernible] country, these renewables are little rare over there. On thermal sense we are not investing, you will see 2023 [indiscernible] deficit.

I believe very strongly that we are going to see the power shortage. Again, we are not [indiscernible].

Okay. So basically...

That's what I'm also saying that the deficit is going to increase with the shortage to the pacific will be increased, I mean those are the 2 types of coin.

Yes. No. I mean, so my point was that, when are you likely to see that. Is that likely to be visible in '22, '23 or anything that is likely to pass it?

Yes, I think we have already started seeing it. We'll continue to see because now where the investment happening other than renewables and what was the pace of investment, 10 gigawatts, it is 2,000 megawatts in U.S., the demand is increasing about 10,000 megawatts every year.

Right sir.

So we know we got 2010 to 2020, how much capacity we have increased and how much demand has increased. So not in the installed capacity, we have to see the generation capability. So in last 10 years, we have set up 100,000 megawatts of the renewable capacity, in the last 10 years, which is equivalent to 19 gigawatts MD. We are talking about capacity increase, but we are not seeing the actual capability to generate thermal in India. Whereas the demand is growing on higher last year, 7, 8 years, close to 45,000 megawatts of overcapacity has been absorbed. We have been a power surplus country in terms of the capacity from 2013 onwards, and that's where we have been seeing this kind of problem and also the subdue suction market and all this kind of event. But this all over capacity has got solved in last 6 years, 7 years. Now in order to overcome this, you need to actually set up 35,000 megawatts of renewable every year, then you are within the incremental demand. Then you will continue to have this kind of a scenario what we are having. But if you don't set up that kind of a capacity, then we will be having shortage.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you.

Thank you, everyone, for joining us this meeting, ladies and gentlemen, and please feel free to reach to us for the questions.

Thank you. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.