Nava Limited (513023) Earnings Call Transcript & Summary

This is at INR 5.2 per kilowatt hour, the long term Tamil Nadu contract.

Last question on other than the power business, what's your take on the Ferro because the segment is consistently underperforming. I understand the market is not good. But now given the recent safeguard duty on the steel and you have seen some uptick in the prices on the Ferro front, how do you look this segment growth in the coming quarters or probably for FY '27?

I think -- see, even if you look at -- compare the last quarter with this quarter that we're in, there's been an improvement of pricing by about 8%, right? I think this has a lot to do with the capital allocation that the government has put upon in terms of infrastructure and so on. So going forward, we are hopeful that prices if not -- they don't increase to a very large extent, at least they are going to remain stable. So while we don't look at it as a very high-margin vertical, but we are confident that in terms of the scale, there will always be a good top line involved with it.

I'm looking from the operating performance. But see, as you indicated that the quarter-on-quarter, the prices have increased. But when you look at the segmental results, there's a sharp drop in the profitability in the Ferro segment. So I'm just unable to digest it because from INR 2 crores of [ EBIT ] we are almost at breakeven on the Ferro front.

No, I think what I mentioned was from quarter 3 to the quarter that we're in currently, quarter 4, there's been an increase.

The next question comes from the line of Kaushik Doshi from ICICI Securities.

My next question is, what is the amount of debt at the end of 9th month FY '26.

Close to $200 million.

Sir, my next question is, do you have any tie-up of power for this summer for Indian power plant?

Yes. So I think in terms of quarter 4, we are more or less fully committed.

The next question comes from the line of Jainam from ICICI Securities.

My first question is for the 300-megawatt MEL phase 2 and 100 megawatts solar project? Can you share the expected CapEx funding mix and steady-state EBITDA and ROCE?

I think we've just answered that with regards to both the plants, just a couple of minutes ago in terms of the CapEx. Just go through the transcript, yes.

Okay, sir. Sir, how much is the outstanding receivables for Maamba?

The arrears amount that is yet to be paid is about $30.5 million.

The next question comes from the line of Sailesh Raja from B&K Securities.

Yes. Sir, could you please update us on the Ivory coast? And also, can you give us the payback period that you are expecting from the solar project that USD 90 million that we are doing?

So in terms of Ivory Coast, as you're aware, we are currently under exploration for the 360 square kilometer concession that we were awarding. I don't have much to share in terms of the discovery yet. I think that's still underway. So when we do have something, I'll get back.

Okay. And what about the solar investment, we are investing USD 90 million. What about the payback period that you are expecting from this solar project?

It's 10 to 12 years.

Okay. Sir, currently, in Zambia, what is the mix, sir, between thermal and solar. So how the mix is changing?

Sorry, what's how the...

No. Thermal and solar in overall Zambia, how is the mix?

So right now, we are only thermal.

Yes. So initially, Zambia was almost 95% hydro when we came into the picture with thermal. But now there are quite a few solar plants that are coming up, but they're all without storage. So possibly the only other baseload apart from the [indiscernible] would be hydros. But I think there's a fair bit of solar coming up and there's also talk of some other thermal projects coming up. But I think solar is gaining more traction.

The next question comes from the line of Stuti Agarwal from CIL.

Could you comment on the increase in employee cost from INR 191 crores to INR 268 crores?

Can you please tell me which period you are referring to?

9 months comparison.

Consolidated.

Consolidated.

One moment please.

Yes. It is on account of commission, like there was a jump. The closing was made in the last quarter. So on like 9 months period, it is more compared to the previous 9 months period in 2024.

Okay, sir. And another question was, we have bought back -- like Nava Global has bought back 50 million of shares. So is there any future plan to like make it a wholly-owned subsidiary?

It is a wholly-owned subsidiary. It was a buyback, the share capital reduced. So it is still a wholly-owned subsidiary of Nava. Nava own 100% of Nava Global.

Then what is the reason for buyback?

Nava was single shareholder. Hence, after buyback, still it holds the 100%.

So Nava Global bought back the shares. So Nava still remains the 100% owner.

The next question comes from the line of Vaishnavi Gurung from Craving Alpha Wealth Fund.

Sir, first is with respect to commissioning of the power plants and thermal power plants in 2026, if I'm not wrong. So what kind of revenue you are expecting from these 2 power plants? If you can give us a broad guidance like around in FY '25 or '29?

Hello, sir.

On the 300-megawatt thermal power plant in case of full year operations, the expected revenue is $180 million to $200 million and from the 100-megawatt solar project in case of full year operation, the expected revenue is $15 million to $16 million.

Sir, can you please repeat again for the solar plant?

It is $15 million to $16 million per annum.

So by when do we expect the full operation of these 2 power plants?

It will be financial year '27-'28.

And sir, just last question from my end. Do we have any planned shutdown for this FY '26 and FY '27 ?

Yes, we'll definitely -- I mean, all the plants undergo shutdown and maintenance every year. So there are going to be planned shutdowns for all our units during the year.

Anything major?

No, nothing major.

[Operator Instructions] The next question comes from the line of Shree Gopal Kankani from SG Kankani Associates.

Thank you, sir, for giving me again opportunity. I just wanted to know that we have recently learned from newspaper that MOIL has increased the prices of manganese ore by 5% from 1st of February. Do we have sufficient stock of manganese ore or this is going to adversely affect our profitability for production of silicon manganese?

No, our exposure to MOIL is extremely limited. We only -- in fact, we don't buy any lumps from them. We only buy a very small amount of fine. So we should not have much of an impact.

Okay. So then, sir, from where our manganese requirement is being met out?

From various sources, mostly outside of India.

[Operator Instructions] The next question comes from the line of Nidhi Shah from ICICI Securities.

So sir, could you give us some broad-based idea on CapEx for FY '27 and FY '28, where are we looking to spend the CapEx? And of the CapEx that we are doing, what kind of revenues we can expect in the next coming years?

So I mean, that's a fairly broad question. So in terms of the current year with regards to the CapEx commitments, it's all based on the ongoing projects, namely, I think the Phase 2, 300-megawatts thermal. You have phase 1 of solar, which is 100 megawatts committed with the potential of another phase that may get committed later based on market dynamics. Then on the agri side, we broadly spoke about the avocado where it's a $5 million commitment and the sugar project, the Kawambwa Sugar Limited, which is $00 million commitment.

So we're expecting all of this CapEx to kind of be undertaken in the year -- until FY '27 end, right? So do we have anything in mind for FY '28?

Can we have anything -- I'm sorry, on mind. Yes, we do have projects in the pipeline that we are thinking about. But it's too early for us to commit or discuss those projects. But as we progress, as we have projects that we are developing, we also are constantly evaluating new projects that we can take up.

All right. Lastly, on the CapEx front, what was the CapEx that was undertaken in the 9 months of this year?

Phase 2 thermal power plant, the CapEx incurred is around $90 to $100 million and towards the solar power -- 100 megawatt solar power plant, the CapEx incurred is $10 million. Avocado plantation, the CapEx incurred is around $8 million. For the KSL Sugar Plant, the CapEx incurred is $8 million.

Okay. And my last question would be that for the Indian power plants, do we have a tie-up for power this summer?

Yes. So I think like I mentioned earlier, for quarter 4, we are more or less fully committed. I think for the Q1 of FY '27 too we are in the process of tying up most of our surplus qualities.

[Operator Instructions] The next question comes from the line of Stuti Agarwal from CIL.

Yes, I wanted to check on what is the status of mines in Africa? Sir, it's about lithium mines.

So in terms of the lithium mines, we're still in the exploration stage. That's currently underway. These processes take a little while, and they involve various steps. So that's currently underway. It's still in the exploration stage.

As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you, and over to you, sir.

Thank you once again for joining us today. I hope we have answered all your questions. We appreciate all your continued interest and support. And as we move ahead, we remain focused on delivering sustainable long-term value for all stakeholders. Thank you, and have a nice day.

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