Orient Green Power Company Limited ($GREENPOWER)

Good morning, ladies and gentlemen, and welcome to the Earnings Conference Call for Q4 and FY '26 for Orient Green Power Company Limited. Orient Green Power Company Limited, headquartered in Chennai, is one of India's leading independent renewable power producers. The company operates over 380 megawatt of wind power capacity across key Indian states and a 10.5 megawatt wind power in Croatia. Also, the company developed a 7-megawatt solar capacity in Q3 FY '26. [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. Also joining us today is Ms. J. Kotteswari, Chief Financial Officer. I would now like to request Mr. T. Shivaraman, Managing Director and CEO, to give his opening remarks and share the company's performance in Q4 and FY '26 with the audience. Thank you, and over to you, sir.

Thank you. Good morning, everyone. I'm pleased to welcome you all to the Orient Green Power's earnings call for FY '26 as well as Q4 of FY '26. Thank you for taking the time to join us and your continued faith and support in our journey. FY '26 was a breakthrough year for the company with many firsts. We commissioned our first solar power plant of 7 megawatts capacity in December '25. And overall, in FY '26, we achieved the highest profits in the history of the company. The favorable wind patterns in the first half of the year as well as the refund of excess interest charged in earlier periods helped offset a slight reduction in wind and performance dip in the fourth quarter due to lower wind availability. Overall, we have been able to achieve, as I said, the highest net profits in the history of the company. We have successfully added 9.9 megawatts of wind capacity in this fiscal, 6.6 was added in the end of March '26 and 3.3 added in April '26. We are also in the process of constructing 17.6 megawatts of solar capacity, which will be commissioned in Q1 and will probably -- will enter full production during the course of Q2. In order to improve operating efficiencies, we have started the process of repowering 7.8 megawatts of our older wind turbines under the new repowering policy of the government of Tamil Nadu. This was pending for quite some years because the policy was not conducive to repowering. But with the new policy in force, we are proactively looking at all our other older wind assets to see which will benefit from repowering, either purely with wind or with hybrid of wind and solar. The financial and liquidity position of the company is improving and the credit rating and outlook have also been enhanced for its key subsidiaries during the course of this year. Now quickly running through the performance highlights. For FY '26, the total income and EBITDA was around INR 316 crores and INR 206 crores, respectively, about 13% and 10% improvement over FY '25. Our PAT grew by 70% to INR 72 crores, which is the highest in the history of the company. Other than the better wind and the refund of excess interest, we also had a significant reduction in interest costs by about 21% due to both decline in overall debt and 45 basis points reduction in the interest rate in our largest loan. Q4 of FY '26, the wind availability was somewhat lower compared to the similar period in the previous year, which is not unusual, given the higher wind that we had in Q1 and Q2 -- Q1 to Q3. The generation from the solar power plant and the interest cost savings partially absorbed the reduction in generation from the wind assets. So total income and EBITDA were marginally lower at INR 46 crores and INR 18 crores, respectively, compared to Q4 of previous year. Loss before exceptional items and tax was at about INR 16.4 crores during this quarter as against INR 14.7 crores for the comparable period last year. Operationally, the wind assets continue to perform reliably through the wind season, and we are all ready and waiting for the upcoming wind season, which should start by the end of May. The 9.9 capacity that has been recently commissioned will be fully available for this wind season. The generation from the company's solar power plant will also be available throughout this fiscal. So the full expansion -- full effect of these expansions will be seen from this fiscal onwards. The new capacity of 17.6 megawatts of solar as well as the repowering of the wind will also start showing results during the latter half of this fiscal. As I said earlier, we are looking at all our older capacity wind turbines -- older vintage wind turbines to see which would benefit from the repowering policy. And during the course of this year, we will definitely look at adding more such repowering policies to our portfolio. As of FY '26, we have about 399 megawatts of operating capacity, consisting of 392 megawatts of wind and 7 megawatts of solar. The capacity additions and repowering is already discussed earlier. So we remain focused on operational excellence, prudent capital allocation while maintaining a healthy balance sheet. We believe that moving to the higher capacity turbines as well as diversified solar will, to a great extent, diversify our income sources and our generation, and we will build a sustainable and balanced efficient portfolio of renewable assets going forward. So overall, FY '26 is a good year, and it laid for us a good base for us to take it forward in the years to come. Thank you for joining us today, and we appreciate your continued support. I look forward to your questions. Thank you.

[Operator Instructions] We will take the first question from the line of Faisal Hawa from HG Hawa and Company.

Sir, we had previously also said that our target is now to reach 1 GW of renewable energy. So where will the equity of this coming from? And are you still looking at a preferential issue or you will now look at it as a rights issue? And do we still want to do it as -- take over assets which are available in the market or we are now looking at some other way to do it?

We are looking at all options. Obviously, the fastest way is to acquire operating assets. And there are a few things which are working. Unfortunately, with the market the way it has been over the last few months, our strategic initiatives have slowed a little, but we are hoping that things will stabilize and we can start moving to the next level on this, which is why in the last quarter, we've been focusing mostly on internal projects, while the strategic stuff is kind of working on and waiting for situation to improve.

But sir, how will we do the financing if at all something comes up?

We'll come to that -- when we have the kind of clear project in hand, we will come back to you. There are multiple options...

Is there a time line to it because in previous con calls also, we have mentioned that?

Yes, I'm not in a position to give you a time line right now. I think the market is a little too volatile for that. So we should be able to give you some answers in the next quarter also, but [ we'll see ].

Sir, as such, with your promoter stake also, you are very much constrained to do. So I mean, to me, it looks almost impossible that we will be able to reach this 1 GW target. So is this target even now on? Or do we now take it as a 3-year target from today?

See, the target is on. How we achieve it while still retaining control of the company is something that we are looking at. And like I said, we will need to wait before we come to any answer on this.

So sir, can we take it from the management that if we are not going to buy any new assets, so this almost...

No, we can -- no, we're not ruling out anything.

No, no. Whatever EBITDA that we have, will it be used to repay the loans and make the company at least debt free so that the shareholders can at least get some dividend?

No. See, the loan repayment keeps happening. The -- in fact, our loan terms are such that most of the surplus cash flow is used to prepaying the loans. So the availability of -- especially on our main loan on the main subsidiary, Beta, there is a cash sweep that the excess cash flow is used for kind of early prepayment of loans -- early payment of loans. So that, in any case, will happen, and that's not really where we were hoping to look at the capital for expanding because that will not give us sufficient capital for any huge -- large-scale expansion. We can do small expansions like we have been doing now with internal resources like the 9.9 megawatts and the other stuff we can do, we can generate equity internally. But anything larger will definitely require external equity sources. And that is something that we are continuing to work on. We have had a few setbacks due to the situation as we are in right now, but I think we should get out of it [ sooner ].

So with the present arrangement, I think another 50 MW is the best we can do.

With internal resources, yes. Without raising money from the market, yes.

And sir, since you're also the president of the association, et cetera, so what would, like, our 450 MW be worth if you were to be in the market for selling the asset?

I think that is something that you can see in the market. Frankly, if you look at from a PE ratio or an EV/EBITDA ratio, we are undervalued compared to the other renewable -- listed renewable energy companies. So...

We are much larger also, sir.

No, no. The other renewable energy companies, there are those which are much larger. Like you have -- Adani Green and NTPC Green are much larger than us. Obviously, their valuations are different. But even others of similar size are currently trading at slightly better multiples. So that's something that we are working on.

So since it has been like a long period and to your credit, we have been able to turn around the company quite well, so, I mean, can we take a decision either way, either we expand or we go towards probably reducing the stake and make it a part of a larger PE fund-based entity or something? Because this way, the share -- even after 2 rights issue, we have not been able to get much of a return.

I understand your -- this thing. This is something that it is very kind of high in our priority list. It is something that we are working on to see how we can increase shareholder value. It's obviously good for you. It's also good for us as promoters. So it's -- I mean we are both in the same boat from that point of view. So it's something that we are working on 24/7. But at the moment, I don't have anything that we can announce to the world as to what we are doing.

And sir, is there any kind of arrangement in which there could be a foreign investor which comes in and even though we see a control of management...

We can't talk about all this until it happens. We are a listed company. There are a lot of things that we -- I mean, until something fructifies to a point where it is -- where we can inform the exchange, we can't really have these conversations. So I can only say that we are working very hard on all options.

So at least can we give it a figure like that this kind of asset would be worth almost like INR 6,000 crores for 1 GW, so we would be at least worth like, say, around 45% of that? Would that be a good estimate, our being almost like a 10-year-old asset also?

I can't discuss all this on a public call, Faisal. It's not -- I mean these are numbers -- I mean, I cannot give forward-looking estimates. I cannot tell you what the share price should be like. You have the data. You know what the competition is being valued at. You can do your own numbers.

I never said about the share price. I'm only saying what the asset could be worth.

No, I would only say that the -- see, I believe that the asset is currently undervalued, but that is based on competitive, I mean, valuation of other companies, but that's something that you will have to -- you can do the analysis yourself. There are enough renewable companies in the market now. It is not like it was 5, 6 years back when there were hardly any companies to compare with. Today, we have comparisons, and you can definitely look at those comparisons.

[Operator Instructions] We will take the next question from the line of [ Yash Nisar ], an individual investor.

Am I audible?

Yes, you're audible.

Sir, my question is what were the key reasons for the decline in Q4 of FY '26 revenue despite strong full year growth?

Basically, there was lower wind in Q4 of -- see, Q4 is typically a very low wind quarter because the main wind for us is in Q2 and Q3 -- Q1 to Q3. There's not much wind happening in Q4. But this year, the wind was even lower than normal. So that's nothing we could do about it. But this variation will be there. See, in this -- in the renewable energy business, this kind of a variation quarter-on-quarter, year-on-year will always be there because we are kind of -- we have to take the wind which comes.

Okay. And were there any delays in power evacuation or like lower tariffs affecting Q4 revenues?

No, no, no. The tariffs were fixed throughout the year because a significant percentage of our capacity is C&I, the rest of it is in long-term [ BTS ]. So in both cases, the tariffs were the same throughout the year. And we have not had any material power evacuation issues. So it is purely wind availability. It's across the board. It's not just for OGPL. Every wind company in India had the same issue in Q4.

[Operator Instructions] We will take the next question from the line of Rohan Singh, an individual investor.

So my question was what is the expected revenue contribution for the upcoming 17.6 megawatts solar project and 9.9 megawatts wind expansion in financial year '27?

Yes. So the solar project, the 17.6 megawatts, will give us a total revenue on a full year basis of about INR 14.5 crores and an EBITDA of about INR 12.8 crores, that is, assuming it is operating 12 months of the year. Since it is only going to be partially -- part of the year, we will have a proportionately lower generation. In terms of the 9.9 megawatts of the wind, in a good -- in a normal wind year, we should get about -- again, about INR 14 crores of revenue and about INR 10 crores of EBITDA. But then that is assuming normal wind. Both are assuming that the weather gods are normal. There will always be some variation.

Okay. So my other question is, to what extent did higher depreciation and maintenance cost impact the Q4 profitability?

Not much difference in maintenance and depreciation costs. It's more or less...

Depreciation is around INR 1 crore on account of this higher capitalization. But in terms of O&M, normally, the new assets, the first year is free O&M. So we will not have any O&M impact in the first year. So only due to the depreciation, it will be there. And going forward, the interest on those loans in the new wind assets will have an impact. Other than that, there won't be any impact in the first year.

Okay. I just had one more question. So other expenses increased sharply in year -- Y-o-Y during Q4. What were the major cost components behind this increase?

See, other expenses primarily, there is -- legal and consultancy charges had increased. And also, we had onetime expense of around -- write-off of some long overdue was there for around INR 1.67 crores.

[Operator Instructions] We will take the next question from the line of [ Disha Shah ], an individual investor.

I would like to know is the company expecting Q1 FY '27 profitability to recover with improved wind seasonality?

See, we can't predict how the wind is going to be in Q1. You will have to compare it with the last year's Q1. So in the renewable energy business, you cannot compare sequential quarters. You will have to compare the same quarter against the similar quarter last year. So that is the real comparison because each quarter, the wind pattern is different. So if you look at Q1 of last year, that will give you some kind of a trend of where Q1 of this year can be, assuming, of course, that the wind gods are favorable to us.

Okay. And which segment will drive future growth more, like in wind expansion, solar projects or repowering existing assets?

See, wind will continue to be a heavy weight as far as we are concerned because we have far more wind capacity than solar capacity. And frankly, the -- I mean the last few years, the amount of solar power that has got added to the grid, there is a glut of power during the afternoon, as you can see. So we will be a little more cautious in our expansion on solar, whereas wind, we will continue to expand. We are, in fact, looking at whether it makes sense for us to add battery storage to the solar capacity in order to make it more kind of customer-friendly because our customers need 24/7 power and solar power giving only in the daytime is -- there are some mismatches. So that's something that we will look at going forward.

[Operator Instructions] We will take the next question from the line of [ Shanaya Vishwa ], an individual investor.

My question was, are there any receivable collection risks from state electricity boards?

[Audio Gap] Andhra Pradesh electricity board, the second is the Gujarat electricity board.

Sorry to interrupt in between, sir, you're not audible. I would request you to repeat...

Yes. So we have exposure to only the AP and the Gujarat electricity boards where we are selling power to the electricity board itself. And AP -- Gujarat has always been -- there has been no issue in payment. AP, we had a few little issue in the previous years, but in the last couple of years, things have been quite smooth. So we are not foreseeing any significant stickiness in that. There has also been a lot of support from the center, the power ministry and a lot of pressure on the various state electricity boards to pay their renewable energy power producers. And that has resulted in reasonably kind of on-time payment across the country. Not just for us in AP and Gujarat, but across the country from Tamil Nadu all the way up to Rajasthan, the state electricity boards are paying more or less on time. So I don't see that as a challenge.

Okay. And my next question is like what is the target capacity by FY '27 and FY '28? And are there any curtailment issues in key states affecting generation?

At the moment, there are no curtailment issues. We will have to see during the peak wind season this year, how it goes. The last few years, we have seen very little curtailment. It has been only technical curtailment, in the sense, because of breakdowns and things like that, not curtailments as such. So we are not foreseeing any significant curtailment this year, but we have to see how it goes. In terms of capacity addition, whatever we have planned for this year -- because any new capacity addition takes 6 to 8 months to build, so we've already covered what we plan to do this year. We may add a little more of repowering during the course of the year. Next year is something that is still work in progress.

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

Thank you. Thank you all. Thank you for your questions. Thank you for joining us today. As I had told Mr. Faisal earlier, we are working 24/7 to see how we can increase shareholder value in this company. And we hope that we should be able to continue to perform -- improve our performance year-on-year and provide a decent return to our shareholders. Thank you.

Thank you, members of the management. Ladies and gentlemen, on behalf of Orient Green Power Limited, that concludes this session. Thank you for your participation. You may now disconnect your lines.