NHPC Limited (NHPC) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the NHPC Q3 FY '20 Earnings Conference Call hosted by Elara Securities Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rupesh Sankhe from Elara Securities Private Limited. Thank you, and over to you.

Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q3 FY '22 Conference Call of NHPC. I take this opportunity to welcome the management of NHPC represented by Mr. A.K. Singh, Chairman and Managing Director; Mr. Y.K. Chaubey, Director, Technical; Mr. R. P. Goyal, Director of Finance; Mr. B. Basu, Director of Projects and the other team members. We will begin the call with a brief overview by the management followed by Q&A session. I will now hand over the call to Mr. A.K. Singh for his opening remarks. Over to you, sir.

Good afternoon, friends. The NHPC Board has adopted 9 monthly financial results for the period ended the first December '21. This meeting held on 11th February '22, and the same has already been communicated through exchanges. By now, I hope you all would have got chance to go through the quarterly and 9 monthly set of numbers. I will just touch upon major highlights, and then detailed analysis of the results shall be discussed by our Director of Finance, Sri, go ahead. Brief highlights of the finance results and important of this -- of the company, our agenda. During 9 months FY '22, our power systems have achieved generation of 21,160 million units vis-à-vis 2126 million units generated in corresponding period of the previous year, which is almost flat. Our PAF for 9 months FY '22 stand at 91.40% against the corresponding period PAF 88.59%, which is about 3% higher. During the 9 months FY '22, company has earned revenue from operation of INR 6,848 crores as against INR 7,165 crores in the corresponding previous period. During the 9 months FY '22, company has earned PAT of INR 2,978 crores vis-à-vis INR 2,829 crores of coresponding period, which is up by INR 149 crores, that is 5% approximate. On physical front, we have been sharing the active construction work at Subansiri Lower Project site is going on full swing. During my recent visit to project from 5th to 7th February 2022, I have learned that some remarkable progress has been achieved, and the project team is putting great effort. I'm very much satisfied with the pace of work, and I'm very hopeful that we can commission 2 units by end of FY 2022. The full commissioning of the project is expected by August 2023. In the respect of Parbati-II project, approximately 900 meters tunnel activation work is remaining, and we are in touching distance of completing the [indiscernible] component of the project. The HRT activation from the DBM phase has suffered since July '21 due to heavy ingress of water. So we had to detour the tunnel, and once again, we encountered heavy water which flooded the channel. The project has met a lot of effort for dewatering the tunnel as well as the starting work has failed and I inspected the site during the visit of the project from 20th and 21st January 2022. Finally, we are going ahead from the DBM phase. We are trying our best to complete the remaining tunneling works to complete the project by March 2023. As already shared that Unit 1 and Unit 2 of Parbati-II projects, we have got resynchronized on 28th and 29th April '20, respectively. Further, Unit 3 and 4 of the Parbati-II projects were also resynchronized with the grid on 6th and 7th July '20, respectively. In respect of Dibang Multipurpose Project, 2880 megawatts, we have the memo at May '21 price level, has been circulated by the Ministry of Power on 18th January '22. Forest Clearance Stage-II approval has already been granted and investment approval towards pre-investment activities for INR 1,600 crore has been obtained. The issue of land compensation of the projects have now been resolved and INR 850 crore has been paid for the land acquisition. NIL comments has already been received from the CWC and Ministry of -- MoGI. The estimated cost of the project is INR 32,993 crores and estimated levelized tariff is INR 4.64 per unit. And we have already shared that NHPC had acquired Jal Power Corporation. Rangit Project 120 megawatts in Sikkim, through NCLT rule. The Government of India, on 30th March '21, accorded investment approval for acquisition of the JPCL. Letter of award has been issued in receipt of the balance, has mechanical work, balance civil works and balance E&M works, except work that kind of E&M works, which is under pending stage. The balance work on the project will be completed in a period of 38 months, that is May '24. The estimated cost of the project is INR 938.29 crores, the estimated levelized tariff is INR 4.37 per unit. Civil work has already been started at site. Important milestone of river diversion was also completed on 7 November, 2021, in the scheduled time. In respect of Ratle Hydroelectric Project 850 megawatts, an MoU was signed at 1 February, '19 for implementation from JV between NHPC and JKSPDC Power conveyed the government investment sanction for implementation of the project and amount of INR 5,282 crores. The levelized tariff of the project is 3.92 per unit. The project is being developed by Ratle Hydroelectric Power Corporation Limited, a joint venture of NHPC and JKSPDC, in which NHPC holds 51% share. The [indiscernible] of the project has been awarded to Mrs. Megha Engineering and Infrastructure Limited on 18th January, '22. Some of the largest hydroelectric project in Siang and Subansiri Basin have been allotted to NHPC by the Ministry of Power on 22nd December, '21. The project in Subansiri Basin that is 2,000 megawatts Subansiri Upper and 1,800 megawatt Subansiri Middle shall be developed by NHPC on a standalone basis, while 10,000 megawatts Upper Siang and 2,700 megawatts Siang Lower in Siang Basin are to be developed on JV mode. Apart from above, NHPC working on 3 new projects in J&K, mainly Sawalkot 1,856 megawatt , Uri-I Stage II, 240 megawatt, Dulhasti Stage II 260 megawatts and the Dugar Project 500 megawatt in Himachal Pradesh. In the respect of hydroelectric project agreement of our handing over, taking over has been signed between NHPC and JKSPDC on 11th December, '21. And NHPC has taken over the project. Revised draft PIB notes taking recommendation of the Public Investment Board for the pre-investment activities amounting to INR 973 crores has been submitted to Ministry of Power on 19th January, '22, and the process for obtaining forest clearance has been initiated. Dugar, Uri-I Stage II and Dulhasti Stage II are under DPR stage. Dugar project has received 21 out of total 23 clearances and is expected to be granted PAC shortly. Tender for EPC contract for the Dugar project has already been invited, and we shall be ready for award once we get the requisite PIB CCEA clearance for the implementation on the project. All lines pre-DPR chapters of Uri Stage I and Stage II have been submitted, out of which letters [indiscernible] have been received and EIA, EMP studies for the environment clearance is in progress. Further process of funding forest clearance has been initiated. In respect of Dulhasti Stage II project clearance of 4 out of 6 numbers, preliminary chapters have been received, and EIA, EMP studies. Forest environmental clearance is in progress. No forest clearance is required and NOC has been obtained from the Forest Department. Further defense clearance has been accorded by the Ministry of Defense on 3rd December -- 3rd January '22. Presently, NHPC subsidiary, CVPPL executing the project, namely Pakal Dul HE project 1,000 megawatt and Kiru Project 624 megawatts in Chenab Basin, J&K. Construction work on both the projects is progressing within the overall schedule. Further PIB meeting of Kwar 540 megawatt has been held at 27 January, '22, wherein go ahead been given, but the [indiscernible] is still awaited. Draft CCA note has been prepared and submitted. NHPC business development team has been in talks with the Indian Embassy, Kathmandu, Nepal, and some of the government of the Nepal organizations for development of the hydropower schemes. We have already signed an MoU with the HIDCL, a government company of Nepal for development of hydropower jointly. I visited Nepal from 19th November to 22nd November '21 and met with the Honorable Prime Minister of Nepal and other key stakeholders. Honorable Prime Minister has shown keen interest in our activities and assured of his full support. Further, NHPC, by letter dated 2nd December '21, has submitted Expression of Interest to develop and finance 2 hydroelectric projects, Phukot Karnali 480 megawatts and Mugu Karnali 1,902 megawatts hydroelectirc project in 2 phases to Honorable Ministry, Energy, Water Resources and Irrigation, Nepal. Both Government of Nepal as well as Ministry of External Affairs has given positive signals in this regard, and we are marching ahead in getting a MoU signed between both the parties for implementation of this project, which will open a new chapter of cooperation between 2 countries and development of [indiscernible] Hydropower, potential of Nepal. As shared earlier that NHPC has been allotted the state of Telangana, Odisha and J&K for development of floating solar power projects under Ultra Mega Renewable Energy Power Plant, the scheme of MNRE. MoU was signed with Odisha for 500 megawatts on 20th July '20. The project will be developed by a joint venture between NHPC and GEDCOL. In-principle approval has been obtained from MNRE in December '20 for setting up of 100-megawatt floating solar first phase in Rengali River by proposed joint venture company under Solar Park Scheme. Promoters' agreement has been signed between NHPC and GEDCOL post January '22. Capacity of the project ranges from 100 megawatts to 300 megawatts and tendering on the same is in the process. NHPC has signed a letter of intent with the Rajasthan Renewable Energy Corporation Limited for development of 10,000 megawatt renewable energy. RE projects part in the state of Rajasthan on 8th February '22. NHPC has bagged 1,000-megawatt capacity Solar Power Project at Viability Gap Funding of INR 44.90 lakh per megawatt under CPSU scheme, phase-II, Tranche-III in the e-Reverse auction conducted by the IREDA on 23rd September 21. Award of the EPC contract in the process. Draft PIB memo based on the [indiscernible] has been submitted to Ministry of Power on 11th February, 2022. Power purchase agreement has been planned between NHPC and State Discom, GRIDCO on 19th May '21 for 40 megawatts Solar PV Project in Ganjam District at a levelized tariff of INR 2.75 per unit, which has been adopted by Odisha Electricity Regulatory Commission. Contract agreement from the EPC contract has also been filed with M/s Tata Power Solar Systems Limited on 14th September '21. The project is scheduled to be completed by 23rd May, 2022. NHPC has annual CapEx plans of INR 8,000 crores to INR 10,000 crores in the coming years, considering its project pipeline. NHPC is also process of creating 2 separate JVs, one for the development of the renewable energy is for hydro and a green hydrogen project; another for is strategic business venture. As a part of new technology initiative in a green hydrogen, NHPC is planning to execute pilot projects on Mobility in Kargil and Chamba and fuel-cell pilot project in Leh. NHPC is also exploring to develop pump storage projects in the states of Andhra Pradesh, Odisha, Jharkand and Karnataka. In this regard, NHPC and OHPCL, Odisha are in advanced stage of discussions to develop 3 pump storage projects totaling 1,420 megawatts. Upper Indravati, Balimela and Upper Kolab in joint venture mode. Government of Andhra Pradesh has also responded positively for developing pump storage project in their state. NREDCAP, New and Renewable Energy Development Company of Andhra Pradesh has expressed its intent to form a joint venture with NHPC for development of 7 PSP schemes totaling 6,600 megawatts in Andhra Pradesh. These projects are Gandikota PSP 600 megawatts, Chitravathi 500, Somasila 1,200, OWK 800, Kurukutti 1,200, Karrivalasa 1,000 megawatts, Yerravaram 1,200 megawatts. In Jharkhand also, we are in advanced stage of talks for signing MoU with DVC for jointly implementing 1500-megawatt Lugu Pahar pump storage project on mutually agreed terms and condition, with equity participation in a JV company. In addition to river, we are also looking at development of off-river PSPs as well as creating PSU facilities at existing hydroprojects. In this regard, our joint venture NHPC is taking a PSI study for off-river PSP location near Tekwa waterfall in Narmada river region in Madhya Pradesh in the vicinity of Indra Sagar-Omkareshwar projects. Development of a probable PSU scheme near Indra Sagar [indiscernible] is also under examination by NHPC. Apart from this, NHPC has carried out due diligence of various PSU schemes in the state of Kerala at 4 projects, 1,400 megawatts; at Tamilnadu, 5 project, 2,550 megawatts. In [indiscernible] NHPC is expanding its profile for overall development of hydropower, solar and pump storage plant, and to achieve a dream of being 50-gigawatt company within next 10 to 15 years. In this, we have 7,771-megawatt commissioned project, 5,999 megawatt under construction, 25,806 megawatt hydro project and 8,020-megawatt PSP under pipeline. Further, our solar project, we are actively working on 1,000 megawatt under CPSU scheme, 1,250 megawatts under tendering pending for tariff consent, 10,000 megawatts under solar park. As such, if you add total, we are right path of our dream. This is all from my side. Now, I refer Director, Finance, Sri, go ahead to discuss the financial results in detail.

Good afternoon, friends. I'm going to share with you detailed quarterly and 9 monthly set of numbers with the detailed analysis. NHPC Board has adopted 9 monthly financial results for the period ended 31st December '21 in its meeting held on 11th February '22; hence the same has already been communicated to stock exchanged. Brief highlights of the financial results and important updates on the company are as under. During 9 months FY '22, our power systems have achieved generation of 21,116 million units vis-à-vis 21,262 million units generated in corresponding period of the previous year's, which is almost straight. During third quarter FY '22, our power systems have achieved generation of 3,961 million units vis-à-vis 3,736 million units generated in corresponding period of the previous year's, which is about 6% higher by 225 million units. Our PAF for 9 months FY '22 stands at 91.4% against the corresponding previous period of PAF of 88.59% which is at -- about 3% higher. Our PAF for third quarter FY '22 stands at 84.48% against the corresponding previous year's PAF of 83.11%, which is about 2% higher. For 9 months FY '22, company has earned revenue from operations of INR 6,828 crore as against INR 7,165 crores in the corresponding previous year, which is about 4% lower. The decrease in revenue is mainly due to decreasing revenue from power trading business, higher than [indiscernible] and reduction in interest from beneficiaries by INR 123 crores on account of finalization of tariff for FY -- for time period '14-'19, period in respect of TLDP IV power station in FY 2021. During quarter 3 FY '22, company has earned revenue from operations of INR 1,932 crores as against INR 2,292 crore in the corresponding previous period, which is about 8% lower. The decrease in revenue is mainly due to decrease in secondary analysis charging by INR 34 crore and reduction in interest from beneficiaries by INR 123 crores due to same reasons I have explained above. Other income for 9 months FY '22 is of -- in the order of INR 534 crores versus INR 714 crores during the corresponding previous period, which is about 20% lower. This is mainly due to decrease in dividend income by INR 201 crore, which is partially offset by increase in interest income by INR 16 crores. Other income for Q3 FY '22 is of the order of INR 150 crore vis-a-vis INR 202 crore during the corresponding previous period, which is about 26% lower. This is mainly due to decrease in late payment surcharge by INR 107 crore, which is partly offset by increase in interest income and accelerated projection there. During 9 months FY '22, the generation expenses have come down from INR 723 crore to INR 707 crore, that is by INR 16 crore, which is mainly due to lower water cess on account of lower generation in J&K power systems. Within Q3 FY '22, the generation expenses have gone up from INR 119 crores to INR 129 crores, increasing by INR 10 crores, which is mainly due to higher water cess on account of high generation in J&K power systems. During 9 months FY '22, the employee cost has come down from INR 1,048 crores to INR 942 crores, resulting in decline of INR 106 crore. The decrease is mainly due to superannuation of the employees. During Q3 FY '22, the employee cost has come down from INR 378 crores to INR 319, that is by INR 59 crores. The decreasing is mainly due to superannuation of employees. During 9 months FY '22, there has been decrease in the finance costs from INR 434 to INR 399 crores, that is decrease of INR 35 crores, which is mainly due to changing rate of interest by INR 14 crores and decrease due to repayment of loans by INR 25 crores. During 9 months FY '22, the depreciation and amortization expenses have come down from INR 998 crores INR 846 crores, that is by INR 152 crores. This is mainly due to completion of projects of life of Teesta-V power stations in FY 2021 and adjustment of depreciation at TLDP IV power station in current quarter accounted in finance lease. During Q3 FY '22, the depreciation and amortization expenses had come down from INR 335 crore to INR 297 crores, that is INR 38 crores. This is mainly due to the completion of projects of life of Teesta-V power station in FY 2021 and adjustment of depreciation at TLDP IV power station in current quarter accounted in finance lease. During 9 months FY '22, other expenses have come down from INR 1,009 crore to INR 899 crore, resulting in savings of up to INR 110 crores. This is mainly due to decrease in provision against survey and investigation expense in [indiscernible] projects provided in previous period and other [indiscernible]. During Q3 FY '22, other expenses have come down from INR 416 crores to INR 304 crores, that is by INR 112 crores due to the same reason as explained above. During 9 months FY '22, no exceptional item has been reported. During the corresponding previous period of 9 months, an exceptional item of INR 385 crores on account of one-time COVID rebate was passed onto beneficiary due to the impact of COVID-19. During 9 months FY '22, we have earned PAT of INR 2,978 crore vis-a-vis INR 2,829 crores of corresponding previous period, which is up by INR 149 crore, that is up by 5%. And the reasons for increase in the line items we have just discussed in the foregoing paragraphs. During Q3 FY '22, we have earned PAT of INR 761 crore vis-a-vis INR 808 crores of corresponding previous period, which is down by INR 2.47 crore, and the reasons for decrease in the line items we just have discussed in the foregoing paragraphs. During 9 months FY '22, the incentive position is as under: Secondary energy, we have secondary energy of INR 14 crores in the current 9 months period against the INR 70 crores we earned in previous -- corresponding previous period. It is resulting in decrease by INR 56 crores. PAF based incentive, we have earned INR 402 crores during the current 9-month period against the INR 360 crore we earned in corresponding previous period of 9 months, resulting in increase by INR 42 crore. Deviation Charges. We have earned deviation charges of INR 129 crores during the current 9 months period as against INR 119 crores we earned in corresponding previous period, increased by INR 10 crores. During Q3 FY '22, the incentive position is as under: Secondary energy, this is INR 14 crores against INR 47 crores we earned in corresponding previous quarter, resulting in decrease by INR 34 crores. PAF based incentive. We earned PAF based incentive of INR 89 crores in current third quarter of FY '22 as against INR 75 crores we earned in corresponding previous quarter, resulting an increase by INR 14 crores. Deviation charges, INR 44 crore as against INR 39 crores we earned in corresponding previous quarter. We earned -- this is an increase of INR 5 crores. CapEx during 9 months of FY '22 is INR 3,906 crores as against INR 2,260 crores we earned in -- we achieved in corresponding previous year. The Board of Directors have declared and approved the payment of interim dividend at the rate of 13.1%, that is INR 1.31 per equity sales on the sales value of paid-up equity sales of INR 10 each. For the financial year '21, '22, against 12.5% that is INR 1.25 per equity shares in financial year 2021. The Board has since Wednesday, February 23, 2022, is recorded for ascertaining eligibility of shareholders for payment of interim dividend. The anticipated cost of Parbati-II project is INR 9,898 crores, out of which we have already spent INR 9,358 crore until December 2021. The estimated levelized tariffs based on the anticipated cost of this project will be INR 5.58 per unit. The revised cost of Subansiri Lower Project now stands at INR 19,992 crores, out of which we have already incurred INR 14,730 crores till December 2021. The estimated levelized tariff based on the anticipated cost is INR 5 per period. Other major highlights of the company are as under: On the realization front, NHPC sales received INR 7,149 crores from the beneficiaries against sale of energy during 9 months FY '22 as compared to INR 6,991 crores in the corresponding period of previous year. Trade receivable as of 31 December 2021 stands at INR 3,257 crores as against INR 3,206 crores as of 31st March '21. The major receivables are as under: J&K are INR 1,270 crores, out of which for more than 45 days is INR 1,144 crores. UPPC of UP INR 674 crores and outstanding for more than 45 days is 0. West Bengal Electrity Development Corporation INR 665 crores, more than 45 days outstanding is INR 64 crores. Punjab INR 249 crores, more than 45 days are only INR 2 crores. Jodhpur Vidyut Vitran Nigam Limited stands at INR 62 crores, total [indiscernible], out of which for more than 45 days, it is INR 34 crores. And rest -- other INR 337 crore, out of which more than 45 days are only INR 40 crores. In addition, an amount of INR 63 crore is receivable on account of surcharge. [indiscernible] is J&K INR 30 crores, Tamilnadu INR 9 crore and Punjab INR 2 crores. However, considering the bridge accounting during the year, the trade receivables as on 31st December 2021 is INR 1,864 crores only against the receivable [indiscernible] INR 3,257 crores as mentioned by me in earlier lines. Ad receivables as on 10th February '22 after considering bill discounting is INR 1,551 crores only. The major receivable after considering bill discounting as on 10th February 2022 are as under: J&K, INR 1,096 crores, out of which more than 45 days are INR 959 crores. UPPCL, UP INR 114 crore, more than 45 days 0. Punjab INR 69 crores, more than 45 days INR 3 crores. West Bengal INR 55 crores, more than 45 days only INR 1 crore. Haryana INR 42 crores, more than 45 days 0. Others, INR 201 crores more than 45 days, INR 27 crores. This is all from our side. Now the forum is open for question answers. There is one positive news for our investors community. Last time, our receivables for more than 45 days is less than INR 1,000 crores. Thank you.

[Operator Instructions] We have the first question from the line of Mohit Kumar from DAM Capital.

Sir, my first question is on the Subansiri and Parbati-II commissioning date. So as per the presentation just shared on the website, it says in FY -- Q2 FY '24 for Subansiri and Q4 for Parbati-II, are we on a schedule, convinced this to meet the deadlines?

Yes. As far as Subansiri is concerned, I already told, we are putting our best efforts and work is also going in full swing. And to your information, almost 7,500 workforce, we're working round-the-clock. And then I set a target for commissioning of 2 units by August '22, and the balance unit one-by-one by August '23. So this is our date. And on this date, we are working, and very hopeful we'll be able to do it, unless otherwise, there are some issues in the local area, like we were faced earlier due to the COVID some delays were there. But we are very hopeful the way the things are going in Subansiri. As far as the Parbati-II is concerned, our progress has going extremely well from the both the ends, but the tunnel is a very high areas of Himalaya and they are covering more than 1,200 to 1,500 meters snow bound area, and at one location huge quantity of water, that is around 10,000 to 12,000 liters per minute came in the tunnel. And it was on the reverse direction, it cannot flow through the gravity. The tunnel was flooded for some time, and we started treatment, the best treatment we can do with our experience and the competence in tunneling, we finally did it, got success, and now that has been started moving from both the sides now. From the [indiscernible] side and this side also, a 900-meter tunneling is balance. And it all hoping to go through as fast. Because earlier, I can say you, we have been able to do around 170 to 180 meters tunneling per month. So we are trying our best for those things only, but surprises are not in our control. So hope that once it is not there in the balance tunneling which we've seen, we'll be able to complete by March '23 next year.

Sir, what is the state of the 36:13 [indiscernible]?

[indiscernible] all the packages have may awarded, and the work in powerhouse [indiscernible] hydromechanical work, all has started. And earlier some issues are there, the COVID restrictions, but now that has also been lifted. And all that has been fully mobilized, work is going on, full swing there also.

Sir, how to with Ratle and Dibang. I think both of this should start construction from FY '24 onwards -- FY '23 onwards?

Ratle has already been awarded. Anyway today, I have the meeting with their vice president, they come to my office, and they have start mobilizing the equipment also. They are started the diversion tunnel works immediately. And Ratle has already physically started at ground, number one. Number two for the Dibang project, the land issue was a very big issue that has been resolved with the help of Ministry, local as well as the state government. And we have already acquired more than 85% of the land, and the 100% of land where our structures are coming. So land issue has been resolved. We have already forwarded the PIB. PIB is under consideration in the Ministry of Finance, NITI Aayog, and hopefully, very soon, I will get a date for the meeting, number one. Number two, since we have already opened a tender for the [diversion] tunnel, which required at least 3 years' time to mobilize and complete the diversion tunnel. And thus, the tender has been received. Board has taken a decision to award the tender also, and once the CCEA is clear. So we are very hopeful even if something happens fast, we can award it by end of the March also, this year only. Otherwise, April definitely we'll be able to award Dibang project physically on the ground.

And which are the projects which will move to the [tunneling] stage in the next fiscal year, sir? Apart from that?

For the tunneling, say, Dugar we have already floated 500 megawatt. Sawalkot, our tender is ready. We are supposed to float very -- last week only, but some discussions were taking place. Can we go for some change in the [indiscernible] that has difference in the go. We are working on it. If everybody find okay, we can experiment with the new things that will get a good contractor price, maybe around our estimate only, and get the work. So where this -- that will be working for a week time. Otherwise, this way or that way they are going to float the tender out, it's Sawalkot also 1856 megawatts. And for other clearances are under pipeline, at the same time, we are making the cost estimate other things also. So everything going in final for other hydroelectric project. But 3 projects as I told, Dibang, Sawalkot, Dugar. Dugar -- there this Dibang is going to award zone and Sawalkot and Dugar we have planned to award in next financial year.

We have the next question from the line of Aniket Mittal from SBI Mutual Fund.

The first question was just regarding Parbati II to understand because the execution on that has been a bit slower than what we were anticipating. So this water flooding issue, has all of that being now resolved as of dewatering, when will be tunnel being completed? And what is the current pace of excavation within the tunnel?

Actually, current phase on the one side that tunnel boring machine is going on. In this area, we have created everything since next another 10, 15 meters, we are finding some fear zone, so some collapses are being seen, but the water is not coming from the phase. so it's easier to treat them, and our team is working round-the-clock there also. So once 8 to 10 meters, say, may take another 4, 5 days, we'll be further moving with full speed. And hopefully, if we have been doing the progress, of say, 100-meter plus, we'll be able to do from this side also. So now everything has been clear there, and now we are going for the better progress now.

Okay. By the end of this month, we expect to go back to the 100 meters of exploration. And just a bit of clarity for the --

End of the month, hopefully from the next month. Because this month -- and as I say, 10, 12 days has balance will [retreated] this area because some [ground ] is fine. One left side also okay, the right side from which we are moving into the tunnel, there are some fear zones are there. Fear zone is the factor, there was some collapses are happening because that there is a cover of around 1,200 to 1,500 meters, so some geological issues there, and we are facing carefully and moving forward.

Just to -- just to understand a bit more. So apart from the, let's say, [indiscernible] are there any other components that are really on the hydromechanical front -- for the completion of the project, is where I'm trying to understand. If you can just maybe provide a little bit more granular in terms of how do you see with executing on that front March'23 [indiscernible].

Actually, after this, we have always is the lining work. Lining work from where the team is going on. We're already doing the lining parallelly. So from the team side, it is not an issue. This said, also, we have done lot of more than 2.2 kilometer of the lining, and we have designed some special type of shuttering to achieve the target 500 to 600-meter lining in a month. So once the tunnel is over, we are hoping that by increasing some resources, we're able to do it once the escalation is completed. And as far as the hydromechanical work is concerned, there is no hydromechanical work in the Head Race tunnel. All the dam and hydromechanical work has been completed. And we already are getting power from Parbati-II. The same work -- almost around, say, 340 million units we have generated, and we set a target of 350. So definitely we'll cross that target also. The message is already going up from the Parbati-II. Once the tunnel lining is completed, we have to simply close the edges. So no extra work beyond this scope is required to be done for that commissioning -- full commissioning of the project.

And just on Dibang, because I think the only sticking point here was, maybe, the land issue, which I think that got result. And I think we're on track now to actually start construction of the project as well, and correct me if I'm wrong here, but -- so given this is such a large project, how -- can you help us with what are the CapEx numbers that you're looking for Dibang for the next couple of years and the commissioning timeline for that?

Total construction schedule of the Dibang is 9.5 years. It is a very big project, and they have a huge quantity of concreting, so we'll start with this diversion tunnels. We have already invited tender for the foreign consultants that has already come, it are all under evaluation stage. Hopefully, we're going to finalize very soon, and that the consultants will design for our dam, and they plan for the equipment also and the monitoring also. So that offer, we have already taken. I'm going to finalize it. In the meantime, we are already under this hydromechanical and other things of powerhouse, civil work, E&M packages, the tender has been coated and the discussions are going on. So by the time our diversion tunnel is completed to take the work in that area, we'll be able to evolve all these packages. It required around, say, 9.5 years, and you say CapEx is around, say, INR 30,000 crores. So in almost INR 3,000 crores capacity required per year, so there is no issue for us to -- without a capital requirement for Dibang.

And just one last question. I think there are a number of renewal projects that you are looking to do on a bits itself. If you could just help me how -- so how many of your remaining projects have you signed the PPA and [indiscernible] contractors? That would be helpful.

Actually, we have signed 1 PPA for 40 megawatts in case of Odisha, then again, the 65 megawatts is the drive venture of Bundelkhand Saur Urja Limited in UP. And consent for 1,000 megawatts at the rate of INR 2.45 is already there with us. So there, we get the approval from the PIB and CCA. We'll be awarding the 1,000 megawatts in the CapEx mode. Then we have already done the trading of, say, 2,000 megawatt, and that work is going on. So these are all about at the present, which can take [indiscernible]. For the balance, we have tender but we are considering how to get the PPA by reducing some tariff, that refinancing is going on. And since we are signing some new projects also in the other places in Odisha and Rajasthan, so we'll be working on that. It is under the pipeline, we're giving the due diligence and getting the PPA. With our margin of profit and equity, we'll proceed. Yes. It is going on in the right direction only.

[Operator Instructions] We have the next question from the line of Dhruv from HDFC AMC.

Sir, one clarification. You mentioned in Parbati, the project run rate -- the tunneling run rate will reach 170, 180 by end of next month, right?

Yes, we'll try. Because I hope that -- our -- if this is geologically better, because we have done some testing called [ TSP ]. With that, we're finding that area, there is no water. If the water is not there and the rock is good, we have achieved this progress before July, so we're hoping that we'll get the same type of progress.

Got it, sir. And sir, the second question was on Dibang. Sir, the project is about 10 years and INR 30,000 crores-odd project. Sir -- I mean, is this project in phases? For example, of -- the overall price part will be completed in 5 years and the remaining part in 5 years? I'm trying to understand when does the regulated equity start earning you income? Will it be only after 10 years? Or are there some stages between them?

It will be capitalized only after full functioning. There will be difference of one to one and a half month in between each unit. So total commission will begin -- 1 year.

Got it. Got it. Sure, sir. So -- and will there be some government support in this project? Because this is a massive project and given it's a 10-year decision period, as you mean then the hydro projects take even longer. So more than 10 years, and the IRR in this will be a bit [indiscernible]. So I'm just trying to understand, are there are a lot of government support in this project?

Yes, we are getting around -- INR 7,000 crores for this flood control -- flood moderation. That is a multi-positive project. It's going to reduce a lot of flood in the downstream area in Assam and Ratle. So we are getting around INR 7,000 crores as a grant against this project from the government of India. In addition to that around INR 5,000 crores will be received by us for infrastructure development phase in a row -- sorry, INR 550 crores for roads and [indiscernible].

So INR 7,000 crores from -- for flood protection, INR 500 -- about INR 500 crores to INR 600 crores for infra development. And sir, this is -- is this over and above INR 30,000 or this is included in INR 30,000?

It will be included. This is the project cost only.

Got it. So that way -- so lot of the money will be effectively bundled -- and the addition portion will be funded by the government and that way your equity portion will be a bit lower. I mean, your equity will not be as long as what we have?

No, no.

Got it. Got it. And sir, one last thing is on the cost equity, your employee cost has come down well and your other expenses are also why your business flat for 9 months basis? Sir, if I understand correctly, you might be getting an incremental in your O&M charges from the regulator -- as per the regulatory norms on an annual basis, but your cost has not increased. So is that fair to understand that this is now contributing positively to our earnings? Do you think this can continue even next year? And I mean, I'm just wondering, is there some one-off which will reverse in the next year which we should be aware of?

Yes. Actually, our employee cost is going down due to retirement of our employees. And O&M charges have already been [indiscernible] [ CERC ] for the next 5 years, [ '19, '24 ] period, so it will be contributing positive side.

Got it. Sir, is it possible to share what would be our O&M under-recovery now based on what the normative wise and what the actual estimate, for example, approximately for the year FY '22?

As of now, there is no under-recovery as such. We are within our O&M charges allowed by the CERC.

Okay, so there is no O&M under-recovery now.

No.

Perfect, sir.

Thank you. We have the next question from the line of Rohit Natarajan from Antique Stockbroking.

So my first question is on the capital expenditure. Annual capital expenditure for FY '22, we were looking at some close to 9,000 numbers. At least that number, what exactly is the capital expenditure incurred till date?

Actually, we have kept around INR 8500 crore, and considering that we'll be able to do some solar work also. Some CPSU Scheme were there but it's delayed by the government of India MNRE, and some projects were taken from the CapEx from our side also, we couldn't materialize. There are around INR 2,700 crores which looks after solar projects and the balance of hydropower project. The hydropower, we already spent around INR 3,900 crores, and we anticipate another INR 1,500 crores by end of the month. So here, you can say around INR 5,000 -- INR 5,500 crores will be spending on the CapEx this year. This is already INR 3,900 crore the highest of all. So we have to -- doing the good CapEx within the financial year. And almost same, we are planning for the next year also.

Sure. And my second question is on the solar front. We already have a subsidiary to firm. On my -- what is the cumulative equity requirement for the next, let's assume, for the existing portfolio and as well as FY '23? What is the equity entailed only for the solar project? And what is the margin cost? Is it favorable for you, is there any details that you see across?

Actually, we are funding solar project also in the ratio of 70:30. So since we are in advanced stage of working in on 1,000 CPSU Scheme project, so there will be a requirement of around INR 2,000 crores of equity -- INR 1,800 crore INR 2,000 crores for this project. So you can say if a project of [indiscernible] is taken, total investment will be around INR 600 crores. Out of that, INR 200 crores will be from equity.

Okay. And sir, finally, on the J&K receivables part. I mean, that number, if I recollect your opening remarks correctly, that also has come down, right?

Yes.

What is that in revised number looking like for receivables over 45 days?

Yes. This is INR 1,096 crores as of date.

We have the next question from the line of Aniket Mittal from SBI Mutual Fund.

Just one question on this quarterly number. So if I look at your reported PAT, I think last year's PAT number, you've seen a very large one-off related to the [indiscernible] order? And if I adjust for that then we are -- we are seeing a very strong growth in the reported PAT number. So if you could just highlight, are there any runoffs in this quarter? And what is driving the PAT going higher?

When we are comparing apple-to-apple as against the INR 458 crores -- sorry, INR 798 crores paid reported during Q3 over last year, we have reported INR 750 crore on making apple-to-apple comparison, it is coming INR 545 crores for the current quarter, as against INR 458 crores incurred during the last year for corresponding quarter. There are 3 major [indiscernible] in last Q3 quarters. INR 352 crore on account of earlier [indiscernible] INR 142 crores on account of interest income on late notification of tariffs, and one addition on Tawang project. During third quarter of last year, we had project Tawang project, costing INR 134 crores, so expenditure is not there in current year -- current quarter. During the current year quarter, we actually made 2 head fronts additions then it is coming INR 545 crores. One head front is on account of economics of revenue on account of increase in security expenses by INR 96 crores and the other head front on account of net recognition by INR 1,456 crores. And corresponding decrease in [indiscernible] INR 113 crore PAT additionally this -- current year's third quarter.

So sir, even, let's say, if we were looking for how to adjust for that, it is for the one-off that you [indiscernible]. Can you say almost [indiscernible] growth on the adjusted PAT number on a Y-o-Y basis? Some -- give us some efficiency in something that driving those number?

Actually, we are doing better generation during current year third quarter, and it is giving 19% increase on apple-to-apple comparison.

So a 19% increase on better generation.

Including better generations. And load expenditure -- O&M expenditure towards the employee cost and other expenses.

Just a follow-up on that. So I think last year, we had gotten [indiscernible] -- if I am not mistaken somewhere in -- [indiscernible] encountered there in 3Q. So does it -- does that one-off in this quarter include any recurring benefits from [indiscernible], which is not there in the adjusted number of last quarter?

We are adding -- recurring income of INR 100 crore around on account of [indiscernible] on year-to-year basis in comparison early orders.

We have the next question from the line of Prashant Kshirsagar from Unived Corporate Research Private Limited.

Most of my questions have been answered. There's just one query. In your presentation, you have mentioned about the projects already in the Subansiri Basin. Can you just elaborate on that, whether you have got it a fresh projects? Or is it in the -- that you have got some projects from -- which were earlier allotted to private sector players, and which players they were allotted and where you've got the projects from?

Actually, the projects are allotted to private companies -- and now [ Technical Difficulty ]

Ladies and gentlemen, we have the management line disconnected. Please stay connected. We will join the management shortly. We have the management connected.

Hello?

Can I speak now?

Yes sir, you may go ahead.

Anyway these projects were earlier allotted to the private company. Since they were not doing anymore. The government had taken a decision in consultation with the state government, these projects need to be given to PSU like NHPC and some projects to other PSUs. It will happen in the given 3 projects, say one is 2,000 megawatt Subansiri and other 1,800 megawatt. Then lower [indiscernible] 2700 megawatt. So some of them were allotted to noted to earlier Jindal, then [indiscernible] and the other on the KSK. So we have to go for the due diligence on the total money need to be paid back to this company with the consultation with the NHPC and the Ministry. And Ministry will make a group of people headed by Chairman Power Finance Corporation, who will look into the matter, and before that, we had to get it examined through some consultant. So what E&Y has always done for own project -- for the balance 2 projects we have floated -- we are just floating a tender from the bid 4, they will evaluate how much expenditure they have made, how much is needed to be paid and [indiscernible]. And then eventually, we will pay the amount back to them after the Ministry take a call. So we are working on all list of projects now. We have already recruited our team, also we posted our officers also at Itanagar and other projects. They are working with the local people, the state government, taking a document from the already projected allotted to private campaign.

Sir, just to understand it in a better manner. So you have been allotted 3 projects, you said. That is -- 1 is Upper Subansiri, one is Middle Subansiri, and the third one which I didn't get the name sir?

It is a lower Siang. And then one more project because that is basically largest project of the country. It will happen, but there it comes. Almost 10,000 to 11,000 megawatts, single, it's a Siang project. So in Siang, around 10% of value, JV partner will be Nifco because they have the local influence over there, and 90% from our side, it is all tentative, and since this has been -- the meeting will be taken at the highest level and PMO NITI Aayog, so we had to implement the project cautiously with discussion with local people. So that is one more project of 10,000 megawatts where we have started making the papers and doing whatever work we can do.

Sir, this Upper Subansari project was allotted to which company, which you'll be getting, sir?

KSK. It is KSK, somewhere from Hyderabad.

Yes. And Middle Subansiri was allotted to?

Jindal.

Jindal, okay. And that is the Middle Subansiri is 1,800 or Upper Subansiri is 1,800 megawatts, sir?

Upper is 2,000, middle, 1,800, and the lower is 2,700, for Siang.

For Siang, yes, you said, yes. And sir, the last question is the Dibang project which you have, it's in the lower Dibang value, if I understand it correctly. And so the Dibang basin has not gone to you, or now the Ministry is thinking of giving the entire basin to one company, like you have got Subansiri, the entire basin? That way Dibang -- what was the logic behind that?

Logic of that, you see, the Dibang project is already 2880 megawatts. INR 32,000 crore investment is there. And, you see, for all these 3 projects, very big projects, all totaling, it go around, say, more than 5,000 megawatts. Of 5,000 megawatt is today, the value of per megawatt is coming around INR 15,000 crore, almost INR 15,000 crores. So if Subansiri they have given us, Dibang, the other projects coming [indiscernible] so that they have given to another PSU, because they also want a business that doesn't have any business. And ultimately, it will go to the companies, where really perform the ground. It doesn't mean that allotment on the paper is fine, but the company had to perform. So our competency is there to perform. So once we are able to do it and nobody else do it, a lot of potential there in the margin. So definitely, some projects partial come to us. So which is not worry about the size and the number of projects -- size and the number of projects.

And so we have the -- from the logic point of view, the Basin was not entirely given to you for Dibang? That was my question sir. [indiscernible] impact of renting the entire basin.

That is the only reason because they doesn't have to -- there, they got 3, 4 basins are there. One has been given to [ PNGC], another is given to [Nifco]. Subansiri already, we are working with NHPC. So there are more [indiscernible] so circular has given on projects in that area also.

And Mr. Prashant, due to time concern, that would be the last question.

Last question, Sir, earlier, the thinking was the Siang project would be abandoned by the Ministry. So now, it is going to get revised seriously because there are some logistics issues in that area, that's the reason I'm asking it.

You are very correct. Really, it was abandoned for some time. But in our [indiscernible] making a very big [indiscernible] receiver, Siang, and the Minister is very serious, rather PMO under NITI Aayog to double the project, and the concern from the Chief Minister and the state official. Given to the government also, they are very positive and the mood of the people are also changing. There is the reason we are moving slowly. And even today also, very important leader from that area has come to meet me and they are welcoming us in Siang valley. The talks are going on, but it's slowly so that we have to convince the people, because 2 towns are going to be submerged in that big-sized reservoir. It is around, say, 300 -- more than 300 meters high dam and almost 9.4 bcm -- 9.2 bcm storage will be there. This is a big project where we are going, and the government is very keen to that. Even today also their meeting, going up with the [ NSA ] and the NITI Aayog.

Thank you. I now hand the conference over to Mr. Rupesh Sankhe for closing comments.

Yes. Thank you also. Big thanks to Mr. A.K. Singh and the entire management of NHPC for giving us an opportunity to host this call. And we also thank all the investors and analysts for joining this call. Thank you so much.

Thank you.

Thank you. On behalf of Elara Securities Private Limited, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.