Orient Green Power Company Limited (GREENPOWER) Q3 FY2026 Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the earnings conference call for Q3 and 9 months FY '26 for Orient Green Power Company Limited. Orient Green Power Company Limited, OGPL, headquartered in Chennai, is one of India's leading independent renewable power producer. The company operates over 380 megawatts of wind power capacity across key Indian states and 10.5 megawatt wind farm in Croatia. Also, the company developed a 7-megawatt solar capacity during current quarter. [Operator Instructions] Let us now begin with the introduction of the management team. We have with us today Mr. T. Shivaraman, Managing Director and CEO of the company. I would now like to request Mr. T. Shivaraman, Managing Director and CEO, to give his opening remarks and share company's performance in Q3 and 9-month FY '26 with the audience. Thank you, and over to you, sir.

Thank you. Good morning, ladies and gentlemen. We are pleased to welcome you to OGPL's earnings call for the third quarter and 9-month period ending FY '26. Thank you for taking the time to join us and for your continued support to the company. Q3 has been strategically significant for the company. We successfully commissioned the 7-megawatt solar power project, the first solar power project in OGPL's portfolio. And we have closed contracts for development of around 28 megawatts of additional greenfield capacity, around 18 megawatts of solar and 10 megawatts of wind. Both these should be commissioned by May -- April, May of '27 -- sorry, of '26. Also from the debt side, we have -- the bulk of our debt has been upgraded to BBB, which will enable us to further optimize our cost of borrowing and access capital at more competitive rates. In addition to the greenfield capacity of 28 megawatts, which we are -- which is under construction, we have entered into a contract to repower around 6 megawatts of wind at one of our existing wind farms. This had a set of older assets, which were not performing as well as we would like. And this 6-megawatt repowering is the first project under the newly approved Tamil Nadu repowering policy, and it is definitely a milestone for the company. We were -- we will be the first to commission under the new policy. We are currently involved in reviewing our other old wind assets to see which would come up for repowering going forward. I believe that this, combined with our greenfield capacity, will definitely strengthen our position and improve our operational efficiency and help us serve our customers better. These 2, 3 initiatives together will add about INR 36 crores to EBITDA per annum on an ongoing basis. In terms of performance, our business is seasonal in nature, especially since we are until Q3, predominantly a wind company. A significant portion of our generation happens in the first half of the fiscal year and second half typically has lower generation. Generation during the third quarter was more or less consistent with historical patterns. Operational stability was maintained quite favorably through the quarter. The first half had favorable wind conditions as well as improved grid -- machine availability, which has positively impacted the profitability for 9 months. Now quickly running through the financial highlights. For Q3 FY '26, the total income was INR 40.06 crores and an EBITDA of INR 17.07 crores, broadly in line with the corresponding quarter in the previous year. Loss before exceptional items reduced to INR 18.16 crores as against INR 21.81 crores in Q3 FY '25, which is an improvement of about 17%. Improvement is primarily due to reduction in interest expense. For the 9 months ended Q3 FY '26, the total income increased by about 16% year-on-year basis to INR 268.95 crores. EBITDA rose by 14% year-on-year to INR 187.3 crores. Net profit grew by nearly 54% year-on-year to INR 88.13 crores. The improved performance during the current fiscal is largely attributable to favorable wind patterns and better wind machine availability during the wind season, along with a decline in finance cost of over 20%, supported by improved credit ratings, debt repayment and better financial management. The profitability was also supported by a one-time refund of excess interest charged by our erstwhile lenders in previous -- prior periods. With the growth and repowering initiatives briefed above, we remain aligned with our strategy of deploying higher capacity turbines, expanding solar capacity and developing hybrid wind, solar projects. This will allow us to build a more balanced, sustainable and future-ready portfolio. Currently, we operate 389 megawatts of capacity, comprising 382 megawatts of wind and 7 megawatts of solar. With additional capacity and repowering underway, we will -- we are confident that we will -- our growth momentum will improve, and we will return improved -- provide improved returns to our shareholders in the coming quarters. Overall, the first 9 months of the current fiscal have been encouraging, and we look forward to a positive outlook going forward. The regulatory environment has also been quite benign. We have had a good outcome in the Tamil Nadu repowering policy, which stabilizes the outlook for our older wind turbines and allow us to continue operating our old turbines until they are ready for repowering. So thank you again for joining us, and I look forward to your continued support. Now happy to take questions.

[Operator Instructions] First question is from the line of Amit Agicha from H.G. Hawa & Company.

Am I audible?

Yes, you are audible.

Sir, what is the realistic road map and time line to achieve the 1 GW capacity, which is announced?

Yes, we are in conversations with a couple of people because obviously, 1 gigawatt by organic acquisition is going to take its own time. We are in conversations with multiple people, but we are not yet at a stage where we can discuss with the public. So we are -- I think you will probably hear something from us in the next couple of quarters.

And sir, can you share what is the current consolidated debt equity ratio and the blended cost of interest post refinancing?

So our current total debt is -- just one second, is INR 507 crores at a blended interest cost of about 9.15%.

This is post refinancing, sir?

Post?

Refinancing?

Yes, yes, this is post refinancing. This is the current status as of end of Q3. So the bulk of the debt is with IREDA and we have some debt from HDFC and CUB.

And sir, about the pref issue, I think company or the subsidiary is about to come out with the pref issue, right?

No, no. We are not coming out any press issue at the moment. There will be a pref issue from Delta, which is the subsidiary which holds the solar -- which will be holding the solar assets from the parent. So that is only from the parent and from group capital customers. So we are not raising money from the public.

Okay. It is only from the parent company?

It's only from the parent company and from the investors who would be buying power from us.

And sir, last question from my side. Yes. Sir, can you share O&M cost per megawatt and the trend if possible?

See, O&M cost per megawatt is a little difficult to look at because we have 2 sets of machines. The larger turbines, which perform -- give us the bulk of our EBITDA have a relatively lower O&M. I mean, per megawatt cost but the lower O&M cost per kilowatt hour generated, whereas the older turbines typically have a higher O&M cost. So our total O&M cost was about -- if I take the last year fully, which is more -- this thing, it is about INR 52 crores on a total capacity of about 380 megawatts. So you can do the math, but that's the overall figure.

[Operator Instructions] Next question is from the line of Vipul Kumar Shah from Sumangal Investments.

So can you give the details of this repowering scheme of Tamil Nadu cements? What type of support you are getting from the state for repowering? And what type of yield improvement you see post this implementation of this scheme?

Yes, so basically -- go ahead. What was the last part?

Yes. So how many megawatts we are going for repowering?

Okay. So the Tamil Nadu, basically, it is a life extension come repowering policy, which basically states that any turbine which is more than 20 years old, which is has reached the end of its original design life. There was -- I mean, there was a little lack of clarity as to whether those turbines can continue to operate. So today, the repowering -- the life extension and repowering policy says that these turbines can continue to operate subject to being inspected by third-party agencies and things to ensure that they are safe to operate, both on a mechanical and analytical side. And there is an annual fee that we have to pay to the electricity board to allow the older turbines to continue to operate, which is a reasonable fee. We have no complaint about that fee. The second part of it is if the turbine owner decides to repower, then there have been some concessions made in terms of spacing between the turbines. So typically, when a new turbine is -- or new set of turbines have to be installed, there is a requirement that the spacing between turbines shall be 5x the diameter of the turbo rotor or 7x, there are some ratios. So on repowering, those ratios have been relaxed. So the turbines can be spaced a little closer, which from -- obviously, from an operation point of view, it helps us put more turbines in the same area. And technically also, I mean, the old spacing requirement was too generous and too conservative. So this is more realistic. So these are the 2 -- and plus there is a fee which has been determined for repowering, how much you have to pay for repowering the turbines. In terms of performance improvement due to repowering, it varies depending on the performance of the old turbines. To give an example, for the first asset that we are planning to repower, the PLF before repowering or the PLF -- current PLF in that asset was in the low-single digits. I think we had about 6%, 7% PLF only because they were very old turbines, we were keeping them alive because there was no policy to repower. So they were just kind of running. The new turbines that we are installing will have PLF north of -- in the order of 30% plus. But we are having less capacity than we had. So we have a 10-megawatt wind farm, which we are installing only 6 megawatts of new turbines because space in that land is not available for more. Once these stabilize, we will probably put solar in the balance land to meet up the 10-megawatt installed capacity. That also has been permitted in the repowering policy that any repowered wind project can automatically convert into wind plus solar hybrid. So we are able to optimally utilize both the land that we have and the grid connectivity that we have. So each of the other projects, we are now analyzing to see what the current PLF is, what the new PLF will be after repowering and whether the delta in investment gives us an acceptable IRR to knock down the old turbines to repower.

So if I understood you correctly, this 10-megawatt older turbines will be replaced by 6-megawatt new turbines, which will give you PLF of approximately 30%, right, sir?

Right.

So that will -- for this particular 10-megawatt asset, what can -- realistically we can expect how much more EBITDA from the same asset?

So we are looking at about INR 7 crores of EBITDA from -- INR 7.5 crores of EBITDA from that 6 megawatts of new capacity.

And previously, what was the EBITDA for that particular asset?

Nothing much because by the time we cover the O&M cost and things like that, that was barely breaking even. So it was less than INR 1 crore.

And we will take more repowering initiatives post analysis of this project, right?

Exactly. No, no. We will not -- see this project, we know what will happen. What we will do is we were waiting for the policy to come out. The policy came out only last month. So we did not want to kind of invest because we had actually placed the advance on the vendors even before the policy came out because we knew the new policy was coming out, but we didn't want to kind of overstretch that. So now that the policy has come, we will go each one -- what we do is we look at the current EBITDA, look at the projected EBITDA with the new capacity, investment in the new capacity and see whether my delta is giving me a decent IRR. If it is giving me a decent IRR, we go ahead. If the current turbines are performing reasonably well, and they are generating a decent EBITDA, fine we'll continue. Some locations, repowering is not working out because there are other large turbines around. So what we call micro siting becomes a challenge. So then we have to -- so it's a case-by-case. It's a site-by-site basis. We can't take an overall broad decision across all our assets. But it now gives us that option to either repower or convert it to hybrid or both.

So this repowering means you have ordered new turbines, when they are likely to?

So repowering, we are hoping to commission that 6 megawatt in about -- by about June of this year. We have ordered three 2.1 megawatt turbines from Suzlon. So it will be actually 6.3 megawatts.

Three 2.1 megawatts?

Yes, yes. The larger turbines...

Right now, latest offerings are 3 megawatts.

That doesn't fit in the location. See, basically, repowering, you have to fit within the location land that you have, and you have to see what are the other turbines that are there around. And you have to maintain that spacing between turbines. So with that, there is even a 5.1 megawatt turbine, which has been offered to us, but that will not suit for a repowering location. Repowering, we have to use 2 megawatt and below. In fact, 2 megawatt itself was a stretch. So it's a little more complex because we are operating within -- it's like when you are doing a retrofit of an existing or refurbishment of an existing house, what is there in the basic structure, you cannot change. So you can only improve something. So -- but the 2.1 turbine of Suzlon is a very, very good turbine. So it's giving us whatever PLF we want.

And last question, out of our -- we have a portfolio of 380 megawatts, right, sir? So out of that 380 megawatts, how many megawatts qualify means needs to be replaced, which is giving us much lesser yield?

So around 45 megawatts has crossed 20-year life. So that we need to seriously look at for repowering, out of which 10 megawatts we are repowering now. And the balance 35 megawatts has kind of passed its sell-by date. But we have to -- so we are now looking at the balance 35 megawatts. As and when things change, I mean, year-on-year, more turbines will come into that bracket, and we will keep looking at them. But now it's -- we don't need to wait necessarily for 20 or 25 years. We can -- we are looking at it on a continuous basis to see whether -- where repowering is possible and whether the IRR on the delta investment makes sense.

So lastly, this 35 -- balance 35 megawatts, they will be replaced within next 1 year? Or is that realistic or it will take more?

No, I will not be able to -- because we are still doing the analysis, so I will not be able to kind of confirm whether all of it we will replace. Some of it may continue to run because the turbines like an old car, they are still running smoothly and generating. And one site, I know we are not able to do because the site is such that we are not able to install any larger turbines at all. So we may continue to operate these as long as they run and then maybe convert to solar because the access to the site is not suitable for the large turbines to come. Because these are all 250-kilowatt turbines with 30-meter, 40-meter hub height, I mean they're tiny compared to the -- even the 2-megawatt turbine that we have.

So if I have heard you correctly, this new initiative of solar plus wind will add INR 25 crores to INR 30 crores EBITDA, right? And they will be commissioned in June -- by June '26 because the line was not clear at my end. So is that correct?

Basically, yes, the new capacity of solar plus the new wind plus the repowered wind totally will add about INR 36 crores of EBITDA.

INR 30 crores, right, sir?

Yes, INR 36 crores.

INR 36 crores, okay.

[Operator Instructions] Next question is from the line of Vikas Singh, an individual investor.

Yes. Sir, first question is how would one should see its occurrence and impact on PAT going forward?

Of which, sir?

Sorry?

Impact of what on PAT?

How would one see its occurrence and impact on PAT going forward?

No. See, are you talking about the new capacity coming in? Or are you talking about generally the PAT?

New capacity coming in.

So new capacity coming in will add, as I said, INR 36 crores of EBITDA, net of -- one second, I'll just give you the number. Is there any other question? Any other questions?

Yes, I have. No, no, just this one.

Yes, yes, just give me a minute. I'll give you the exact number.

That may take some time.

So it will -- immediate impact on PBT will be about INR 10 crores after providing for interest and depreciation. PAT will be more or less the same because we will have enough depreciation cover for not paying tax.

Next question is from the line of Amit Agicha from H.G. Hawa & Company.

So what is the projected CapEx for the FY '27?

CapEx for -- no, FY '27, at the moment, we have not made the full plans for CapEx. FY '26 CapEx is more or less -- the spillover will be there for FY '27 for these 36 megawatts of capacity, which is a total of how much about...

INR 240 crores.

About INR 240 crores is what will be kind of carried through from the year. As far as FY '27 is concerned, we are looking at certain fundraising options because the internal generation for CapEx will not be that large. We have -- we had raised equity from the market for the solar project of 25 megawatts. The wind and the repowering has been financed with internal -- mostly with internal resources. Going forward, we are looking at some fundraising possibilities. Once that is firmed up, we will work on the CapEx for next year.

And sir, international exposure is expected to expand?

No. That is an old asset that we had. We have not -- so that continues to run. We have currently no plans to -- I mean, get exposed to overseas.

And sir, can you share what is the current PLF on wind and solar both?

Solar is -- I mean, this year has -- I mean, it was commissioned just in the last month of the last quarter. So it's too early to talk about PLF for solar. For the 9-month period, the PLF was about average of 22% for the newer assets and about 17% for the older assets.

[Operator Instructions] Next question is from the line of Sweta BK from Equilion.

Am I audible?

Yes.

Sir, can you just give some idea on the project pipeline? Like when can we start the 7-megawatt solar power project?

The 7-megawatt solar is already commissioned. The balance 18 megawatts of the solar is targeted to commission before May of this year. And the 10 megawatt of wind greenfield also, we are targeting to commission by April, May of this year. The 6-megawatt repowering should -- will go up to June.

Okay. That's great. That's great. And sir, if you can give an idea on the turbine upgrades they'll be considered like are we considering the older wind assets to be repowered?

Yes. So as I said earlier, there's about 40 megawatts of old wind capacity, which needs to be -- which can be repowered or more of it can be repowered, but which is kind of right for repowering. We are in the process of analyzing to figure out whether repowering makes economic sense. And wherever it makes economic sense, we will go ahead and repower. But we have not yet come to that stage yet because we are waiting for the final shape of the repowering policy, which has come out last month. So based on that, we will go ahead with the analysis.

Okay. So we'll be able to take advantage of the policy, right?

Yes. Yes, yes.

Okay. That's great. And that will be reflected in which quarter, sir?

No, the repowering -- see, whatever we are already doing will start reflecting in starting from Q2 of next year. And the further capacity, if we do, it will take -- it will take 8, 9 months for the new project to come up anyhow. So if we do any further repowering, we are looking at probably only in FY '27 for it to start seeing some action.

Okay. That's great. And sir, just can you give a guideline on the next 3- to 5-year vision that you are having for the company?

See, we are looking -- I mean, I think it's a little premature. We definitely want to become a gigawatt size company. We have certain projects and thought processes which are in progress. But the details we can't share with you until we are ourselves clear and we are ready to take it to the shareholders.

That's great, sir. I like your clarity and your honesty.

Next question is from the line of Vipul Kumar Shah from Sumangal Investments.

So you said, sir, new assets have PLF of 22% and old is 16%, 17%. So what is the old capacity and what is the new capacity?

The new capacity is about 40 megawatts.

Rest all is old capacity?

Rest all is older capacity.

Next question is from the line of [ Shivam Ashottama ], an individual investor.

I'm from Bombay. Basically, I would like to know the pledge which are done 100% pledged by the promoter because of which we are not getting a good valuation. Is there any chance of unpledging by the promoters?

We -- I think the target is to get them unpledged sometime before -- before middle of next month.

[Operator Instructions] Next question is from the line of [ Yash Nissar ], an individual investor.

Am I audible?

Yes.

Yes. Sir, my question is, can you please help us understand the reasons for the subdued performance in the third quarter of FY '26?

Yes. So basically, we are, as of now, almost 100% a wind power company. So the wind is -- in India is seasonal. So you have maximum wind in Q1 and mostly in Q2. Q3 and Q4 are typically low wind. So if you compare it with the same quarter last year, you will find the numbers are more or less the same. So the generation is more or less the same. As the 25 megawatts of solar comes in, you will have a little more generation happening in Q3, Q4 from solar. But until that starts kicking in, you will always find this Q1, Q2 will be heavy and Q3, Q4 will be relatively kind of muted. That's part of life.

Okay. So you mean that major generation happens in the first half?

Yes, exactly.

Yes, yes. Okay, okay.

Vayu Bhagavan. We are dependent on Vayu Bhagavan.

Sorry, sorry.

We are dependent on Vayu Bhagavan.

[Operator Instructions] Next question is from the line of [ Disha ], an individual investor.

So I would like to understand that what is the current net debt of the company and equity ratio of it?

So net debt is about INR 507 crores. And debt equity is more or less 2:1. That is 2x equity to debt.

Okay. So what are your plans to reduce loan and finance costs further?

No, loans will continue -- actually, next quarter, loans will increase somewhat because we will be drawing down loans for the new capacity. So we'll be drawing down about INR 120 crores of debt for the new wind capacity. So it will go up a little. But I mean, that's part -- as part of the renewable energy business, that's our lifeblood. We have to borrow money to put up new assets. In terms of interest costs, we are down to -- we are at about 9.15%. We have recently got a rating upgrade. So we are negotiating with our lenders to see whether we can save some money on the interest and also looking at certain refinancing and other possibilities. So that work will continue.

Okay. And I want to understand your expansion plan for the Europe.

No, we have no expansion plan for Europe.

Sorry?

We have no expansion plan for Europe. We have one asset there. We will continue to operate it, and that's it. We have no plan to really go further in Europe. We are concentrating on India.

[Operator Instructions] Next question is from the line of [ Puneet Arora ], an individual investor.

Sir, this year was one of the best for the company in terms of the cash flows, right?

Yes.

And do you think next year should be better, same or like how do you think the next year is going to be?

Difficult to say. Whatever we hear from the metallurgists indicate that next year, the monsoon will be more or less okay. And if the monsoon is okay, we will also be okay. Because we are dependent on the weather. From whatever we can do operationally in terms of the machine maintenance, in terms of the reduction in interest cost, all that stuff we have done. But we have no control over how the wind will behave in the next season. This year was a slightly above average wind season. Next year, we will see how it goes. Current indications are okay. We are not seeing anything negative towards the monsoon or the wind as of now, but we'll have to wait.

Next question was, sir, this -- we just got one -- this improvement in the rating. So by when do you think we should -- the company will get reduction in interest costs as a result of improvement in ratings?

[Foreign Language] We are talking to the banker. We'll see. We'll have to see. They have to give us.

Next question is from the line of Amit Agicha from H.G. Hawa & Company.

Sir, would it be possible for you to share, sir, like what would be the total CapEx required for 1 GW because right now, we are 380. So till now, what is the CapEx that we have done already? And to reach 1 GW, how much more CapEx will be needed?

As I told you, we cannot reach 1 gigawatt in a reasonable time frame if we are doing only greenfield. So there will have to be some step change that we are working on it. But -- so -- and it depends on what -- should we say -- today, your solar per megawatt is costing you greenfield about INR 5.5 crores per megawatt. Wind is today actually much more expensive. It is going up to almost INR 7.5 crores to INR 8 crores a megawatt, of course, with much higher PLF. So that's the kind of order of magnitude if we are going for a greenfield acquisition or greenfield asset. If you go brownfield, it's a different ball game, and that's the conversations that are happening.

[Operator Instructions] Next question is from the line of [ Shivam Ashottama ], an individual investor.

You just now said there is no expansion plan in Europe. Are you making any profit from that Europe?

Yes. The European asset is running itself. It is making some profit for us. So last 9 months, I think we had about INR 1 crore -- 1 million units generated and about what is the EBITDA -- we had about EUR 800,000 of EBITDA in the last year, which is about...

EUR 800,000 x 100, say INR 80 crores.

No, no, it is INR 8 crores, INR 8 crores.

INR 8 crores.

[Foreign Language] we will be very happy.

[Foreign Language].

See, we tried to sell that asset some time back. But unfortunately, I mean we don't own 100% of that asset. We have a local partner who owns 49%. We own 51%. So together, we have to sell. So we have had some conversations, but it's not progressing. The asset is not large enough that any large banker is interested to sell it. So we did make a few attempts, but then we said, okay, let it just run. It's paid off its debt. It's slowly paying us back whatever we had invested in it.

20 years. In fact, our company has invested hell of a lot of money in the last 20 years in the same asset, right?

No, no, no, no. We have not invested big money in that asset. We actually invested much more in India. See, Europe, when we got in, we had a -- it was in Croatia. So we put in a 10-megawatt wind farm where -- and we had a promise of license for another 60 megawatts. Unfortunately, that 60-megawatt license did not come. So from that point of view, it didn't make sense for us to kind of -- I mean, at 60, 70 megawatts, it makes sense to be in a country. At 10 megawatts, it really doesn't make sense. But since the local partner is taking care of things and he is fairly straightforward from that point of view, there's no this thing. So we said, okay [Foreign Language] Not worth the effort trying to sell it.

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to Mr. T. Shivaraman, Managing Director and CEO, for the closing comments. Over to you, sir.

Thank you all for joining us for this call, and thank you for your participation. Thank you for your support to OGPL, and we look forward to hearing -- speaking to you during the next annual conference call. Thank you all. Have a great day.

Thank you very much, sir. Ladies and gentlemen, on behalf of Orient Green Power Company Limited, that concludes today's session. Thank you all for joining us, and you may now disconnect your lines.

Thank you.