Tata Power Company Limited (TATAPOWER.NS) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Tata Power Q3 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Dr. Praveer Sinha, CEO and Managing Director of Tata Power, for his opening remarks. Thank you, and over to you, sir.

Thank you. Thank you very much, and good evening to everyone, and thanks for joining in the call. I have my colleague, Sanjeev Churiwala, CFO; J.V. Patil, Group Financial Controller; Kasturi, Chief Treasury; and from Investor Relations, we have Anshul and some of my other colleagues from the finance department. Before I share with you some of the salient features of the quarter performance, just to give you a little background, the power demand during the quarter 3 and 9 months for the last financial year has been, I would say, not very high, but has been nearly 7%, which is less than what it was the previous year. But I think when we look at both the demand increase in December and January, it looks like we will have a rebound in this year, especially with summer expected to be a little more warmer than last year. We do expect that our peak demand will be in the 270 to 280 gigawatt range, and we can expect a very large increase in the demand of power in the coming months. In last 9 months, we have seen huge capacity adds, especially in renewable space. And while our overall capacity has reached 514 gigawatt of installed capacity, nearly 45 gigawatt was added in this fiscal, out of which 38 gigawatt is renewable capacity. So huge capacity additions have happened. And we do expect that going forward, this momentum will be continued. Looking at the financial performance of the company for the quarter, we have given a very strong operational and financial performance with the EBITDA increase of nearly 12% year-on-year at INR 3,913 crores compared to the previous year. Similarly, the PAT has increased marginally to INR 1,195 crores despite Mundra being nonoperational for the quarter and having a substantial hit because of that. For the 9 months, the EBITDA has jumped 12% year-on-year to INR 11,874 crores as compared to INR 10,639 crores. Similarly, the PAT is up by 7% for the 9-month period to INR 3,702 crores. This quarter, what we have seen is many of our new businesses have come to age, whether we look at our solar cell and module manufacturing, where there has been a huge increase in our plant profit tax -- profit after tax, which has gone up to nearly INR 251 crores in the quarter compared to INR 112 crores last year. For the 9-month period, the plant has delivered a PAT of INR 592 crores, which is an increase of 154% compared to INR 233 crores in the last year 9 months. Similarly, our rooftop has done exceedingly well. We crossed 1 gigawatt in 9 months period. And in Q3, we executed in the previous year. In this quarter, we executed 372 megawatts compared to 173 in the previous year. The rooftop PAT has increased in the quarter to INR 111 crores compared to INR 60 crores last year. And in the 9-month period, it has gone to INR 324 crores compared to INR 110 crores in the previous year 9 months. Similarly, Odisha DISCOMs have done very well. The profit of Odisha DISCOMs has gone up to INR 226 crores in the quarter compared to INR 86 crores last year. And in the 9-month period, it has gone to INR 505 crores compared to INR 164 crores in the previous year 9 months. I think what is important is that many of our new businesses have now started showing results. And in the future quarters, they will further stabilize and produce much better results than what we have seen in the previous quarter. We also have seen that many of our other businesses, including the transmission businesses have started showing results. We were able to commission some of our TBCB projects such as the 400 kV Koteshwar-Rishikesh transmission line. Similarly, we were able to complete some of the other projects which were under implementation. And some of the projects will get completion -- completed in this quarter also. We also got a letter of intent in the last quarter for the Hinjewadi line, and we are expecting some more projects in this quarter also. Last quarter, we had a huge challenge because Mundra was not operating. We have been able to now conclude the arrangement with Gujarat on all the issues of the SPP, excepting one point. We hope that in the next 2, 3 weeks, we will be able to close that. And on a similar basis, we will parallelly start discussing with the other states so that we are in a position to start operation of the plant maybe by the end of this month as there is now a huge demand of power that is coming up, and we should be ready for the summer months requirements of these states. Work on all our other businesses, especially our PSP project in Bhivpuri and our hydro plant in Bhutan are going at full swing, and they will meet the time lines that have been set by us for both these projects. These are very ambitious time lines that we have set for PSP and the Bhutan project. And we are very confident with the pace of work that is going on that we'll be able to complete. On our distribution business, we expect that some changes will happen by way of the Electricity Act amendment. And we are expecting that once the Electricity Act amendment is put in the parliament for approval in this budget session, we will get many more opportunities on [indiscernible] licensing in the country. Similarly, we are expecting some more announcements on the distribution sector in next 6 to 9 months, whereby certain more states will come up for public-private partnership based on some of the other incentives and concessions to be provided to them, especially to states which have huge financial losses in their distribution business. We also expect that many of the new initiatives of the government, including nuclear power and all that will bring more clarity in terms of the technology transfer, in terms of sourcing of fuel. And in terms of the opportunity that will come up to set up these nuclear plants, especially the small modular nuclear plants in various parts of the country, for which we are in continuous discussion with the government, Department of Atomic Energy and NPCIL as also NITI Aayog so that these are put in practice quickly and some of the projects can start work in the next 24 months. We are always working towards improving our performance. And to that extent, you will see that our financial metrics are very, very conservative. And we continue in spite of the type of CapEx that we are incurring, we continue to have a net debt to underlying EBITDA of 3.4 and a net debt to equity of 1.2 and we expect that the type of calibrated growth we have will continue in future quarters also. So with this, I will hand over back to you for your questions. And me and my colleagues are here to respond. Thank you.

[Operator Instructions] We'll take our first question from the line of Mohit Kumar from ICICI Securities.

Congratulations on strong numbers in solar manufacturing and solar rooftop especially. My first question is on Mundra. Sir, of course, you are trying to resolve with the Gujarat and you will subsequently go to the other procurers. My question is till the time we get the final resolution from the other procurers, is it fair to assume that you'll be able to run the capacity, which you only linked to Gujarat and Delhi?

So this is all under discussion. We had a few months back the joint meeting of all the procurers, during which it was agreed that Gujarat will take the lead in finalizing the PPA terms. Now that the PPA is agreed with Gujarat is one point. They will be circulating this to other states and once we get their principle approval, we will try to start operating the plant and scheduling it to them based on their acceptance. So hopefully, in the next few weeks, we should be able to find out the comfort level of this other secure state and then we will start scheduling the power.

Understood. My second question is, sir, how do you think about the renewables capacity addition over the next 3 months? I think the target we have set for ourselves was 2 to 2.5 gigawatts, if I remember correctly. I think you added around 600 megawatts, if I'm not wrong, in the last 9 months. Do you think we'll still be able to meet that 2 gigawatt target?

So our target this year was that we will set up 2.6 gigawatts, which included third party and ourselves. We've already done 2.3 gigawatt, which includes third party and also it includes 900 megawatt of our own capacity adds. We have another 400 to 500 megawatts of projects, which we are pursuing, which we expect to complete in this quarter. And then we have projects which will come up in 2027, which wherein most of the projects will be our own because all our so-called third-party projects have got over, including SJVN and NHPC. So all these new projects that will come up will be catering to our own department.

We take our next question from the line of Sumit Kishore from Axis Capital.

When I look at the [indiscernible] of Q3 FY '26 EBITDA to Q3 FY '25 of INR 432 crores, it is almost entirely explained by the bump up that has happened in the Delhi distribution business. Although the Delhi distribution business has seen a 2% decline in power purchase and sale -- power purchase and sale, there seems to be some regulatory adjustments there, which has bumped up the EBITDA. So why hasn't it been properly called out in accounts in the presentation? And what are the details there? Because it seems to be explaining the whole growth for the quarter.

What you have to do is you have to see the increase in EBITDA considering that last year, we had an EBITDA impact from Mundra, where there was a positive EBITDA of INR 300 crores. That is not there this year, and that is being compensated from our rooftop business, from our manufacturing business and our Urja business. There is a one-off that we have got in Delhi DISCOMs because of the regulatory order that we got for cooling of a tariff for '22, '23. But notwithstanding that also, there has been increase in our existing portfolio of businesses, and that has helped us for the increase in EBITDA for this quarter.

That is very clear sir. The truing up amount has just become congruous in a quarter where you have had the big Mundra impact. What is the amount for the quarter?

Mundra, there are various provisions that we had to do. I think in the next quarter, when we do the complete true-up, we'll be able to give you the complete picture.

Okay. But what is the impact for 9 months that you have trued up in your numbers, if not the third quarter?

I think all put together, when we look at 9 months, it's closer to about INR 800-odd crores of losses that we have got.

Which is losses for Mundra?

Mundra only, yes. Because Mundra has been shut for 6 months now. And of course, when we -- the plant is shut, we don't get the capacity charges. And fixed cost is still there. So to that extent, the INR 800 crores have been booked as a loss.

This is at the EBITDA level or the PAT level?

At the PAT level because for Mundra and other thermal power plants, PAT level matters the most.

Okay. Asking is for Delhi distribution for the 9-month period, what is the true-up benefit that you have taken in numbers?

For 6 months, which again to your earlier point, we have been reporting that in the earlier quarter and this quarter. The total regulatory impact at TPDDL is about INR 344 crores for 6 months. We also had a similar true-up impact last year of INR 333 crores. That is there. Plus in the last year corresponding same period, we had the order impact for Mundra of INR 332 crores. All of them have been appropriately reported in the accounts.

It is still not clear to me. What is the benefit that you have booked in the third quarter?

You wanted YTD or third quarter only?

Third quarter only also because you're saying that the 6-month number was clearly mentioned. The third quarter number is not clearly mentioned.

The third quarter PAT impact is about INR 344 crores on TPDDL regulatory impact.

And that is flowing from revenue to profit? Or is there any other benefit at the EBITDA level?

No. So this is net of taxes, of course. So...

So the [indiscernible] EBITDA benefit is more?

Yes. So it's INR 460 crores at the EBITDA level.

How much? INR 464 crores?

INR 460 crores.

INR 460 crores, I heard.

In fact, it would be that the notes on accounts, Sumit, that's -- public disclosure around that. You'll get the full numbers.

Okay. That is clear. The second question is, typically, you have an elimination in the renewable cluster under others, which is a negative number. This time, it is a small positive number. So typically, our understanding over the last few quarters was that if you -- because you do know internal -- intra transfers, sales, there is some elimination. Why is the elimination positive this time?

So you're right, the elimination that is done, whether it's a positive number or a negative number, everything has to be eliminated. So whenever there is an intra transfer and there's some positive number, that is eliminated, so you see a negative elimination. And whenever there is an intra transfer loss, that is also eliminated to a positive number. So the idea is that -- at the PAT level, there's no impact. And this is basically a true-up on a quarterly basis. So the way you have to read it is net of elimination, when you look at INR 912 crores, let's say, you can look at the Slide #52, which has been uploaded, it shows the cluster-wise performance, the breakup is there.

Yes. I'm looking at the cluster-wise performance. So because you are doing projects which Tata Power is setting up on its own books, I'm assuming that part of the modules are going from your manufacturing facility to your own projects. So which is why the elimination needs to happen on consolidation because it is being consumed by your own entity. So why is the elimination a positive number?

That's what I'm saying. So if you look at the right, you have this genco, Solar EPC, TP Solar. So TP Solar would provide services to the genco in terms of supply of most. Similarly, the Solar EPC would also do the services for genco and as well as a third party. So of course, there are many, many projects within that. However, if any project is having a negative loss because of the contractual nature of the agreement, right, that also needs to be eliminated. So one of the projects could be a negative PAT margins for -- most likely for the Solar EPC, which now has been eliminated for positive INR 60 crores.

There was a loss which you have made in the Solar EPC business, which has been -- because the elimination has then become a positive.

As you can see Solar EPC overall PAT is INR 183 crores, right? It is positive. But let's say there are 100 different projects happening, which include in-house supply. So as per the accounting standard, any contract which even has a loss or in-house supply also needs to be eliminated. So as a result, that INR 60 crores is in elimination.

This is very clear. Just one last point. There's some positive impact for FGD recovery in Q3 and 9 months for Maithon, which also seems to be bumping up the number quite dramatically on a year-on-year basis in Q3 particularly. So what is that impact? That's my last question.

So we have commissioned the FGD for Maithon. And given that this is a regulatory asset, we are getting the regulatory returns. So that impact of that is about INR 15-odd crores, and you will see that recurring -- happening every subsequent quarters now.

So INR 50 crores in every quarter it will come?

15, 1-5.

INR 15 crores.

We'll take our next question from the line of Apoorva Bahadur from IIFL Capital.

Sir, you briefly mentioned about more opportunities on the distribution business from the PPP side, possibly due to some sort of a package for the DISCOMs. Can you give some more color on that? What sort of package are we foreseeing over here?

So there are many states who have huge financial losses. And so some of those states will be given the opportunity of a long-term loan at 0 rate of interest. And -- but there will be certain caveats in terms of they need to go for PPP and only against that, they will be given. So those are states which are already identified in terms of the type of financial losses they have. And it is expected that once that is announced, we will have a few states who would be availing that opportunity and going for PPP.

So when should we expect this? Around -- any time lines?

I think in the next 6 to 9 months, this should happen.

Okay. Understood. Sir, also wanted to sort of understand our strategy on the rooftop side. Commendable, I mean, the improvement that has happened in the growth and profitability. But has it reached some sort of peak revenue or a peak profit? Or do we foresee more growth here? And secondly, any plans of cross-selling more, especially on the storage side?

So this is tip of the iceberg, I would say. And the opportunity is phenomenal. And what we are seeing is against the Prime Minister Surya program, 1 crore houses were supposed to be done. We've already done only 25 lakhs. So there is a huge number. In this budget, another 50 lakhs have been added -- 5 million has been added. So there is a huge opportunity with the type of financial support that is being provided. Without the financial support also, we are finding that a lot of C&I customers are also going as -- also customers who want larger capacities, 10 kilowatt and above. So I think this is a business which is going to be there for a very, very long term. We would also find that people will -- those who have put up smaller capacities will augment it in future based on their increase in energy requirement. And this business, I do feel is something which is very futuristic and very -- will keep on improving going forward.

Okay, sir. Sir, lastly, one theoretical question. Now that we are close to solving Mundra in terms of the supplemental PPA. In case the government again sort of implements Section 11 because the last time it implemented, it was not just for Tata Power, but for all the imported coal-based assets. So does Section 11 supersede the supplemental PPA? Or will we be kept out of the purview?

Section 11 is imposed when there is a shortage of power. And hopefully, before that happens, we should be in a position to close this arrangement because this power is required by all the secular states and if they go for Section 11, they have to pay more. So it makes more sense for them to go ahead and finalize the FCPA rather than going to Section 11.

[Operator Instructions] The next question is from the line of Puneet from HSBC.

My first question is you talked about one point which is missing in Mundra. Can you elaborate where is the point of difference still?

There is one point. Let's wait for that clarity to come from the government and we will be able to clear it.

Okay. Secondly, on the Delhi distribution side, there was this talk about reducing regulated assets. But in this quarter, the number has gone up again. Any progress that you're seeing there? Or it's a slow outlook?

So the regulatory asset per se has gone down. But what has happened is that there is one more order that has come -- the true-up order has come for '22, '23, which has given another INR 400 crores additional regulatory asset to the company. So that's why it's looking high. But in actual during the quarter, it has come down by INR 460 crores. It has come down by INR 460 crores.

Okay. Understood. And lastly, if you can talk about which are the big renewable projects that you will commission in FY '27?

Which are the...

Yes, projects which will come in...

I think some of the Tata Steel projects, we already commissioned the 198 megawatt wind project. There are some more wind projects which will get commissioned in this quarter. So I think many of the wind projects will get commissioned and also some other projects will get commissioned between this quarter and the next quarter.

Understood. And what should be the run rate for the year that we should assume for your own and separate [indiscernible].

This year, we will do something like another 500 megawatts. But next year, the so-called 2.5, we will do 100% for ourselves.

Okay for FY '28 onwards?

Right.

We'll take our next question from the line of Ketan Jain from Avendus Spark.

Congratulations on a strong performance in rooftop and module manufacturing. Just on the rooftop side, what's your outlook on the rooftop addition in India? I think year-to-date, we have added around 7 to 7.5 gigawatts. Will it continue going forward in '27 and '28 -- '27 and '28?

I think if you look at the sales of rooftop addition in the country as also by us, it has increased tremendously with a much better supply chain, much better channel partner, much better arrangement to supply and erect and commission. I do expect that the speed will go up much further. Also, government has come up with a new scheme, which is -- the state DISCOMs have been asked to go ahead and implement it. We are doing it in Odisha, which is known as the ULA scheme, Utility-Led scheme, which is there. And I think the capacity adds that you are seeing last year, at least 50% to 60% more will happen in this year. And we will continue to see the increase going forward.

Understood. Sir, my next question is on the module manufacturing. I could see that we've sold around 960 megawatts of modules. So -- and we've also produced 960 megawatts of sales. So is it right to assume that all of these sales are DCR model sales?

In the last quarter, we had some ALMM that is imported cells we had used because the order was for supply of imported cell with domestic modules. But I think in next 2 quarters, we'll have more of our own cell and our own modules because from 1st June, only DCR cell and DCR modules are being utilized. So you will see more or less that whatever cell that we produce is fully consumed internally. But yes, in the last quarter and also this will be [indiscernible].

Understood. So this 962 megawatt is all the external sales which we have done?

No. It's all...

Largely it is the consumption for rooftop and our own businesses. And rough breakup is a small quantity of about 168 megawatt peak for ALMM and DCR we have done 795 mega watts peak, two put together is about 962.

So external will be 20%, 25%?

Generally it would be even smaller than that.

Very small.

So the realization is a blended realization of the DCR and non-DCR model, both?

Yes.

And what would be the current realization, sir, in the market for DCR and a non-DCR?

Very difficult to -- it depends on the type also. Because they are 540 and 580 and -- and also which ones are mono, which ones are [indiscernible]. Very difficult to say.

I think it's difficult for us to give a breakup because a large quantity of that is in-house consumed in our various businesses. But if you look at the P&L, which is also uploaded, we'll have an EBITDA margin of close to 28% for the quarter. And for 9 months, we're delivering close to 20%, 25% of EBITDA margin.

Correct. Correct. Okay. Sir, my last question is on the renewable execution part. You mentioned 2.5 gigawatt next year. So 2.5 gigawatt in FY '27 is a target, right, sir? For our own capacity?

Our own capacity, yes.

And just one addition to this is, what are the challenges are we facing in execution of our own capacity? Or is it a strategical call that we are first finishing our third-party order book and then focusing on our existing -- our own capacity? Or is there any challenges we are facing in execution?

This was timing issue only. So the third-party orders we had received much earlier and our own capacity are orders that we got last year. So based on the time lines that has been agreed, these are [indiscernible].

[Operator Instructions] The next question is from Satyadeep Jain from AMBIT Capital.

Mr. Sinha, I just wanted to ask on renewable energy execution once again. I know you're looking at 1 gigawatt broadly commissioning this year. In the last 9 months, it's been 600 megawatts against industry at 38 gigawatt, even if you strip out solar rooftop, that's about 30 gigawatt, 2% market share for Tata Power. And that 1 gigawatt that you're looking at now is despite third-party execution, the initial expectation was 1.5 to 2 gigawatt. So there seems to be a miss. And we are seeing it across the board for some of the larger players, misses in terms of execution, but the industry is still adding a lot of capacity, which means it's a long -- very long tail. In case you do meet the targets next year, either mathematically, if you look at the market share, the industry commissioning, it has to more than double or some smaller players lose market share. Just want to understand if you do take market share, how is that going to play out? Why should smaller players commission less or take less market share next year in the overall, not just Tata Power? Just trying to understand this entire long tail, how will that shrink?

So if you look at Tata Power this year, we have already commissioned 2.2 gigawatts of projects. And that means that we have inherent capacity to execute such large capacity, and we will add another 500 megawatts in this quarter. So 2.7 gigawatt,s, we will be doing in this financial year. if we look at next year, we have a capacity to execute 2.7. We may do more than 2.5, while we have taken the initial estimate of 2.5, we can go up to 3 gigawatts of capacity adds. As you are aware, we have a pipeline of nearly 5.2 gigawatts of projects which we need to execute. So within next 2 years, we will execute. Also, it's not just executing the project, but also the time line when the transmission line comes up. As you are aware, many of the transmission lines got delayed. And we are now timing the project completion with the transmission line completion so that it should not be that these projects left stranded and unutilized when the transmission lines are not available. So I think it's a question of better planning, better phasing and staggering it in such a way that it is able to produce as soon as they are implemented and the power can be evacuated.

Mr. Sinha, let me ask it another way. When the year started, obviously, you're looking at 1.5, 2 gigawatts if we roll back 1 year ago. So at that time also, you had the third-party order book. So what has -- is it not some delay in execution, transmission? Or is it purely that compared to initial expectations, you prioritized third-party book? And the delay in commissioning transmission has been an industry-wide phenomenon. But despite that, we're looking at 38 gigawatt capacity for the entire industry. But still -- are you saying the delay in commissioning for capacity -- delayed capacity commissioning for certain players more than it did for others? Just in the context of overall addition, trying to understand compared to the earlier targets you had?

You need to understand that many of the projects are either intrastate projects or interstate projects. The intrastate projects, the challenge of transmission lines is not so much. But in interstate transmission lines, there have been challenges. Our projects that we were doing for third parties were synchronized with the commissioning of those transmission lines. For our internal projects, again, it was synchronized. Some places -- some of the lines which were supposed to come last year have got delayed and they are expected by March this year or maybe it may go up to May, June this year and some by December. So that's why the project completion is -- has to be staggered in such a way that it meets the time line for evacuation. Otherwise, there is no point in setting up of the plant if the power cannot be evacuated.

Perfect. Sir, one more question on Odisha. Just we are seeing increase in income. Largely, it seems to be reduction in ECL losses. Just wanted to understand what is driving that reduction in ECL? And is it also reflected in actual increase in cash profit? Is it mainly accrual or actually your cash receipts have also increased significantly in Odisha? And what has led to that ECL reduction?

So I think our collection efficiencies have improved, our billing efficiency has improved and the performance of Odisha DISCOMs have improved tremendously. If you track it in last 3 years, the performance has been improving every quarter. And the coverage of billing has been better, loss reduction has happened and stealing of electricity, which was there has reduced drastically. So I think overall, the performance of all the DISCOMs has been very good. And we need to acknowledge that the type of work that they have done to bring about a turnaround not only financially but also operationally is phenomenal. And that is why you are seeing a much better performance in this quarter as well as in the 9 months of this year.

And to add to your question whether it is converted to cash. Absolutely, if you look at quarter 3 itself and we look at the distribution cash flows, see largely Odisha, we have earned about close to INR 800 crores of cash only for the quarter.

We'll take our next question from the line of Girish Achhipalia from Morgan Stanley.

Sir, my question was on your wafer and ingot plan. Where are we right now? And what is the size and any state incentives? That was the first question, sir.

This is under discussion. We are examining the technology, equipment, size, all those things and we will take some more time to take a final decision.

Okay. And from China, we are seeing wafer and polysilicon prices increase. Currently, we have, I think, more than 5 gigawatts under construction. So how much of an equity IRR impact does this cost because you would be sourcing some of the raw materials from there? If you can quantify.

So if the input material cost goes up, the output material cost also. So this is true for everyone who is manufacturing the modules in the country...

Yes, so I was referring to like the...

The phenomena -- just we will get a higher price realization in the market.

Yes. I mean, but your EBITDA for your utility scale projects remains the same, but your gross block increases, right? So I wanted to understand the equity IRR impact. Is it like 300 bps, 400 bps or is it lower?

It is not having a great impact, but we also have a mix of solar and wind in most of our projects. So from whatever we know, there is not going to be any substantial impact.

Okay. And if I heard you correctly, sir, for excluding third party, next year, you are targeting 2.5 gigawatt and in FY '28, another 2.5 gigawatt. Is that the way it will happen in terms of your...

More than 2.5 -- it is more near the 2 to 3 gigawatts.

Next question is from the line of Anuj Upadhyay from Investec.

The first is on the margin front across your EPC and the rooftop. So during the quarter, the margin has fallen across both the segments. And probably I was of the opinion that with the complete operation of your cell and module capacity, this margin volatility across the EPC should come down significantly. So could you just explain the reason for this fall in EPC margin and rooftop?

I think on the EPC side, we kind of target PAT margin of close to 5% to 6% every quarter. But if you look at quarter-to-quarter, depending upon the true-up there could be challenges. But by and large, that's what we have been targeting. Because if you look at the overall solar EPC margins, it's a very, very healthy margin overall. Solar rooftop about 14.5%. And when you look at large projects, was about 9.1%. And PAT margin, we're kind of delivering on a comp basis at about close to 8%.

Okay. So this is what it should be on a substantial basis, right -- sustainable basis?

That's what we think because even quarter 3 -- when we look at the quarter 3 margins, PAT margin is 7.6% and 9 months is also 7.8.

Okay. And secondly, on the debt profile, sir, I can understand on the regulatory side where debt can go up. But say, for companies like Maithon and your coal SPV, the debt across the respective businesses has largely remained stagnant. So any time line on when can we expect the debt reduction happening over there?

I think the debt, what we see on a consol basis, we have a debt equity of 1.2, debt to underlying EBITDA of 3.4. So we are on a very, very comfortable journey given that we will be spending close to close to INR 15,000 crores, INR 20,000 crores and INR 25,000 crores of CapEx every year. We will have debt in the books, but we'll have to -- we want to ensure that we maintain our debt equity and debt-to-EBITDA profile on a very, very conservative basis.

Okay. Fine, sir. I mean like on a consol, no issue. But just on these 2 segments, I wanted to have your view whether we should expect any kind of a debt reduction happening from here on or it would largely remain at a similar level?

You're referring to which segment?

Do you mean Maithon?

In Maithon and Coal SPV.

Maithon is the regulatory assets. We're not doing any CapEx. So as per the regulatory assets, we will keep on running the cash over there and to that extent the debt will only reduce.

Anuj, does that answer your question? We'll take our last question from the line of Aniket Mittal from SBI Mutual Fund.

Yes. Actually, I had a question more at a sector level to understand. So we've obviously seen renewable awarding pretty much die up. And there seems to be some sort of deadlock here with almost 40 gigawatts of PPA unsigned. Just to understand your thoughts, what's the pushback that DISCOMs are having on signing PPAs? And when do you think renewable awarding in the country can sort of come back?

I think the renewable projects are getting delayed because of the connectivity issue. And in such times new evacuation lines are set up, the pace at which the renewable projects are coming up will be a little slower. So all the existing connectivity approvals have been given and there is no fresh approval being given. And until unless that happens, there is no point in tying up new renewable projects. So I think we'll have to see how quickly some of the bids come up and some of these new lines are awarded so that the project pipeline can be definite.

In that context, how do you look at certain country level, let's say, renewable additions happening? Obviously, last year has been a fairly good year for India. But do you see risk to that number sort of slowing down for the next couple of years?

I think at least for the next 2 years, we have a lot of renewable projects and also transmission line projects, which are under implementation. So to that extent, I don't think this will slow down to a very large extent, and we should see a good momentum at least for the next few years.

Just one confirmation I wanted to have. So for all the renewable projects that, let's say, Tata Power builds on their books, you will be using your own manufactured cells. Is that understanding correct?

Absolutely correct.

Okay. And within that -- so 2.5 gigawatt of renewables expected to get commissioned next year, how much would solar be out of that?

I think it's now about 50-50.

We'll take our next question from the line of Nikhil Bhandari from Goldman Sachs.

Just want to ask about the cell and the module business. The profitability currently is, of course, phenomenally pretty high. And I understand many of the other companies have not able to ramp up their cell plants with a good yield on time. But how do you see the sustainability of these margins let's say, beyond next 6 to 12 months? And a connected question would be for your rooftop solar business margins as well. How much of your rooftop solar margins are currently benefiting from this policy support of the ALMM requirement for the cells because you have your own cells. So probably that positions you to make a higher margin. How much of that margin strength is because of this benefit? And how do you see the durability of this advantage if the cells become more widely available in the market?

Very short answer for your long question. And this will be much, much better going forward. Once we have learned how to run the plant, it will only improve. It will not become worse.

We'll take our next question from the line of Girish Achhipalia from Morgan Stanley.

If you can just help us currently, how is the Indonesian law situation evolving? Like have they levied the export tax? And who's kind of bearing it because the market realization, I mean, are you passing it on? Are the producers taking some impact on the margins? How is it flowing through in Q4 now?

There is no impact. At least we have not heard or seen anything. So we are not expecting any impact on that.

Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference over to Dr. Praveer Sinha for closing comments. Over to you, sir.

Thank you, everyone. During the last 1 hour, we heard a lot of questions on renewable, but very few questions on distribution. I think we have taken all of you to mutual and shown you the type of work and the phenomenal improvement that has been there. We need to consider it because there are not many players in this country who have this sort of skill set, knowledge and experience. Considering that a lot of distribution opportunity will come in future. I think suitable justice should be done with distribution business in your analysis. So please consider that also. We should not just get carried away by a few areas where there are too many players, and I think margins are a challenge. With that advice, I would like to close. Thank you all. If you have any queries, please connect with Anshul and Kasuri and any questions you have, please ask them, we'll try to respond to you. Thank you.

Thank you, sir. On behalf of Tata Power Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.