SJVN Limited (SJVN) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the SJVN Limited Q1 FY '25 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, sir.

Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q1 FY '25 conference call of SJVN. I take this opportunity to welcome the management of SJVN represented by Mr. Sushil Sharma sir, Chairman and Managing Director; Mr. Soumendra Das sir, he's the Company Secretary; and Mr. [ Akhileshwar ] sir, is the Head of Department, Finance. 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. Sushil Sharma sir for his opening remarks. Over to you, sir.

Okay. Thank you, and thanks, everybody, for giving me this opportunity. I'm extremely happy to share some major developments in Q1 of FY 2024, '25. Our Raghanesda solar power project, which is 100-megawatt, has been declared COD on 3rd of April 2024. Project -- however, project was commissioned in previous quarters in the state of Gujarat with the capacity to produce 252 million units of energy per annum. The power from this solar project is being sold to Gujarat Urja Vikas Nigam Limited. Another milestone achieved in the month of June was the completion of heading excavation of 11.8-kilometer-long head race tunnel of Arun-3 hydroelectric project in Nepal. In Buxar thermal power project, power [indiscernible] system is ready and for startup power, 400 kV Buxar-Naubatpur line has been charged in the month of May 2024. We, as REIA, issued a letter of awards, 7 numbers, for total capacity of 1,500 megawatts for wind, solar hybrid power projects. I'm also happy to share some recent development in current quarter as well. We have recently commissioned 90-megawatt Omkareshwar floating solar project on 8th of August 2024 in the state of Madhya Pradesh with the capacity to generate 196 million units of energy per annum. The project is situated in Omkareshwar Floating Solar Park, for which agreement for selling of power has already been signed with Rewa Ultra Mega Solar Limited and MP Power Management Company Limited. Thus, in terms of the latest addition in operating assets, 90 megawatts more power has been added which will add approximately INR 64 crore revenue per year. With the commissioning of this project, our total installed capacity of SJVN now stands at 2,466.50 megawatt. Further, in major development, the Cabinet Committee on Economic Affairs, CCEA, chaired by honorable Prime Minister of India has approved an investment of INR 5,792.36 crore for 669 megawatts Lower Arun Hydroelectric Project at a levelized tariff of INR 4.99 per unit. The project will be implemented through SJVN Lower Arun Power Development Company Private Limited, SLPDC, a wholly-owned subsidiary of SJVN Incorporated in Nepal. We are also excited to inform that government of Mizoram has allotted Darzo Lui PSP, 2,400 megawatt, to SJVN and with this allocation, first pump storage project is added in the portfolio of SJVN. The Darzo Lui Pump Storage Project with an installed capacity of 2,400 megawatts is set to be developed across Darzo Nallah, a tributary of the Tuipui River. Also, we are happy to highlight our power generation achievements in the current financial year. Our prestigious 1,500-megawatt Nathpa Jhakri hydropower station recorded highest ever monthly generation of 1,222.170 million units during July 2024 since it's commissioning in 2004. Also, total generation for all official projects during the month of July '24 is 1,654.207 million, which is also highest ever monthly generation. Our all 3 hydro plants that is NJHPS, RHPS and Naitwar Mori hydropower station have achieved their highest generation in a single day ever since their commissioning. So giving you a brief of our projects, as on date, 12 projects of 2,466.5 megawatts and 2 transmission lines are under operation, 4 hydro projects of 1,558 megawatts and 1 thermal power project of 1,320 megawatts and 11 solar projects of 1,950 megawatts are under construction. We are excited to inform that SJVN Green Energy Limited, a wholly-owned subsidiary of SJVN, has signed MOU with AM Green Ammonia, India, Private Limited. The platform shall be developed in 2kV, starting with a capacity of 1 million tons per annum and ramping help capacity to 5 million tons per annum by 2030. In the recent past, Government of India has launched PM Surya Ghar Muft Bijli Yojana which aims to provide free electricity to 1 crore households in India. We are extremely happy to share that towards this scheme, SJVN has been allotted 3 states: Himachal Pradesh, Punjab and Arunachal Pradesh. SJVN has also been assigned the responsibility of installation of rooftop solar system on government buildings and 18 ministries, which have been allocated to us in this regard. As far as progress is concerned, process of empanelment of vendors has already been initiated. You must also be aware that SJVN has been listed as one of the renewable energy implementing agencies, REIA, by Ministry of New and Renewal Energy, MNRE, to meet the 500-gigawatt target by 2030. In financial year 2024, '25 for June ending quarter 1, we have achieved 100% target as SJVN has floated tenders of 4.8 gigawatts. Overall, SJVN has floated tenders of 4.8 gigawatt out of targeted 10.8-gigawatt capacity in a financial year '24 and '25. I am happy to share that SJVN has been conferred with Gold Award at 16th Exceed CSR 2024 for outstanding achievements in corporate social responsibility in power sector category. I once again reiterate that SJVN is moving forward to achieve our vision of installing 25,000-megawatt portfolio in operation by 2030 and 50,000 megawatt by, 2040. With this, I close my opening remarks. And thanks to all for listening me patiently.

Sir, shall we start question-and-answer session?

Yes, mam.

[Operator Instructions] The first question is from the line of Mohit Kumar from ICICI Securities.

Congratulations on a very good set of numbers. My first question is, sir, are you looking to do a fund raise in the SJVN...

Can you again repeat the question? I'm not able to...

Are we looking to raise funds in the SJVN renewables arm in this fiscal?

Yes, we are diluting our stakes in our Green Energy, SGEL, by 20%.

Subject to the approval of...

Subject to approval of [indiscernible] and DIPAM.

Understood. My second question is on this, sir, do we have the -- I think you mentioned about the RE pipeline. Is it possible to give us a single consol number in terms of how much is operational, how much is under construction, how much is the capacity where we are L1, and which is...

Let me explain. We have 3 numbers of hydro projects in operation, 9 numbers renewable and total 12 numbers of projects, plus 2 transmission lines, totaling 2,466.5 megawatts. And under construction, 4 numbers of hydro projects, 1,558 megawatt. Thermal, 1 number, 1,320 megawatt. Renewable, 11 numbers, 1,958 megawatts, totaling 16 projects and 1 transmission line which comes out to be 4,836 megawatt. And I think I've answered -- your question satisfactorily.

Any RE capacity in the pipeline, sir? This is the capacity which is under construction, right? Is there anything which is -- in which we're L1 and which is not part of this portfolio?

Sir we have a long-term plan of adding 49,499 megawatt of renewable portfolio including every hydro and thermal and is particularly leveled, 25,777 megawatt.

My last question is, can you give a timeline for the Buxar and Nepal and when are you expecting the commissioning?

See 1 unit of Buxar thermal plant will come in this financial year, and second unit next financial year. Nepal, as I have already said in my last interaction with your kind self, around 3 -- we are targeting the Q3 of next year.

Q3 of next year, Q3 FY '26.

2025.

'25, so this fiscal. This December.

No, quarter 3 of '25, '26.

The next question is from the line of Mohit Surana from Monarch Network Capital Limited.

First of all, congratulations for a good set of results. A couple of questions. One, the blended tariff for this quarter is only INR 2.60 per unit. That's around 17% lower than what it was in the Q1 of the prior year. Any reasons for that? I understand it could be because of the higher generation, but if there is generation higher than the design capacity, then what's the rate at which we sell that excess power? That's one -- question number one. Second, if you can give some thoughts on the fund raise? How much in terms of the amount that you are looking to raise through a stake dilution of 20%?

See, as far as revenue from operations in Q1 is concerned, our revenue from operations in Q1 '24, '25 is INR 831.73 crores against Q1 last year, INR 664.62 crores. And Q1 profit after tax is INR 327.15 crores against last year's Q1 of INR 270.20 crores.

And second question...

And second question, you have asked the fundraising stake sale. So we are targeting INR 2,000 crores through dilation of SJVN stake in our wholly-owned subsidiary, SJVN Green Energy Limited in '24, '25 subject to approval from regulatory authority, DIPAM, [indiscernible] and Ministry of Power.

Sir, with respect to the first question, I was indicating about the tariffs. Our tariff this time has been lower compared to the last year.

Let me just clarify that tariff is different for different projects. It cannot be average out -- we cannot average out tariff of all the projects. Say, for example, Nathpa Jhakri tariff is different, Rampur tariff is different and other tariff is different. So it cannot be an average-out tariff of all the projects. It is different for different projects.

Understood. Sir, my follow-up question would be, any update on your JV with IOC? Last time, I think you mentioned about the green energy projects that can be taken up in the joint venture?

Yes, renewable energy...

We have -- our -- this joint venture with Assam Energy Renewable Limited for 1,000 megawatt, development of solar projects in Assam only.

The next question is from the line of [ Vipul Kumar Anupchand Shah ] from Sumangal Investment Consultants Private Limited.

Am I audible, sir?

Yes, sure.

So my question is what is our current debt at consolidated level? And what will be the peak debt because we are adding a lot of capacity, and our cash flow is not going to increase in a proportionate way. So what is the consolidated debt? And what is the trajectory of consolidated debt over next, say, 2 years -- 2, 3 years?

Sir, presently, total debt at consolidated basis is at approximately INR 21,000 crores. And for financing the upcoming projects, we are planning to -- we are planning to pay securitization of our assets, approximately INR 2,000 crores of Nathpa Jhakri -- not Nathpa Jhakri, Rampur hydro projects -- Nathpa Jhakri hydro projects.

No. My question is we are executing a lot of projects. So for that, we will have to raise a lot of debt, so what will be debt trajectory over the next 2, 3 years? That is my question, sir.

We have estimated that to be approximately INR 6,500 crores in the next 2 years.

Addition of INR 6,500 crores?

Addition of INR 6,500 crores.

You said it is INR 21,000 crores, right now, right, sir?

It is INR 21,000. It will be approximately INR 28,000 crores by the end of next...

And all our renewable projects are in SJVN Limited, or they all are under SJVN Green Energy?

SJVN Green Energy.

All renewable, solar and wind everything is under -- okay. So can you share the financials for the SJVN Green Energy for this quarter, sir?

This quarter, total revenue from operation is INR 41 crores and profit is approximately INR 29 crores.

Revenue is INR 41 crores and profit is INR 29 crores.

Yes, it is due to some other income, interest income is also there.

Okay. And you said our total capacity is 2,440 megawatts, right sir, right now?

2,466.5 megawatts.

Yes. So what will be the capacity at the end of this financial year, I mean, which projects are going to be operational in the next 6 to 8 months?

Our total projects we are targeting by the end of this financial year 2,638 megawatts.

So 2,465 will become 2,638 at the end of March.

Plus.

So that will be in addition to -- 2,638 in addition to 2,466.

[indiscernible] over 5,000 megawatts all together.

At the end of the financial year, right?

Yes, yes, yes.

Okay. So generations will also increase proportionately from next financial year, right, sir?

Sure.

The next question is from the line of Ragini Pande from Elara Securities Private Limited.

Sir, what was the incentive income in Q1?

Incentive.

Incentive is INR 65 crores, that is on UI and capacity incentive.

Okay. And what is the plant availability factor?

Approximately...

Plant availability factor for Nathpa Jhakri, it was 104.94%. And for Rampur it is 104.832%.

Okay. And what will be your revenue guidance for this fiscal and next fiscal, if you can share?

Our revenue for fiscal year is approximately INR 3,000 crores.

INR 3,200 crores.

INR 3,200 crores.

This is for fiscal '26?

'25.

Okay. And sir, guidance for regulated equity, can you share?

Regulatory -- hello?