Torrent Power Limited (TORNTPOWER) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Torrent Power Limited Q4 FY '21 Conference Call hosted by IIFL Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Harshavardhan Dole from IIFL Capital Limited. Thank you, and over to you, sir.

Thank you, moderator. Greetings, everyone. On behalf of IIFL, I welcome you to the fourth quarter earnings call of Torrent Power to discuss the ongoing quarters as well as the quarter gone by. We have the senior management of Torrent Power represented by Mr. Saurabh Mashruwala, VP, Finance; Rishi Shah, AGM Finance; and Jayprakash, who is Manager of Finance. I request Saurabh Bhai and Rishi Bhai to give opening remarks. Subsequent to which, we can have the floor open for Q&A. Over to you, Rishi Bhai (sic) [ Saurabh ].

Good morning to all of you. Thank you for joining the earnings call of the Torrent Power for Q4 FY '21. We will first take you with the performance of the quarter. After which, phone lines will be opened for the Q&A session. We first explain the performance at the PBT level. And thereafter, the tax expenses will be taken up separately thereafter. The reported PBT for the quarter stood at INR 455 crores as compared to a loss of INR 693 crores, which includes provision of impairment loss of INR 1,000 crores in the corresponding quarter last year. Adjusting for this impairment loss, reported PBT was INR 307 crores. Comparing to -- comparing reported PBT for the current quarter with that of adjusted PBT, there was a growth of INR 148 crores for the quarter. Now to understand the underlying performance of the company, we will take you through the nonrecurring item first during the course of the quarter. There are -- we first talked about the nonrecurring items of the current quarter. There are 2 items in the nonrecurring items. First, in the fuel cost under-recovery of INR 38 crores pertaining to the Q3, which we have talked about at the time of Q3 conference call, was recovered in Q4. Second is the economic activity that our distribution franchise area continue to show uptick in demand as witnessed in Q3 of FY '21. Year-on-year, demand was up by 7% for the quarter as compared to degrowth 3% before witnessed in Q3. To March of the previous year was impacted due to COVID-related lockdown. Hence, numbers may not be exactly comparable if we -- but if you compare the demand during the January and February of this year versus the end of the previous year, we have almost reached a pre-COVID level, which is in line with our expectation, as explained in the previous quarter. Demand growth, coupled with the increase in the vigilance activity help us to cut the commercial losses in our franchise for distribution area, which has resulted in a recovery of areas against which we have made provision in the past quarters. We had about INR 13 crores during the course of the quarter. We expect that going forward in next 2, 3 quarters, we would be able to incur material amounts of values in Agra and Bhiwandi, resulting in the provisions made in the past quarters. Considering all nonrecurring items, these 2 items, I would say, there was a net trade-up in P&L of Q4 to the tune of INR 51 crores. Now coming back to the nonrecurring item of Q4 of FY '20, we had a similar nonrecurring item in FY '20 also. So we -- there are about 5 items -- nonrecurring items in FY '20 and for which we had made a provision in FY '20 -- Q4 FY '20. The first item is about INR 1,000 crores impairment provision on carrying cost of -- carrying value of 1,200 megawatt DGEN power project we have made in last quarter in Q4 FY '20. As discussed with our last call -- last year call, this is non-GAAP adjustment in the applicable accounting standard. These are lead to the reduction in P&L charges, net depreciation or the acquisition for the current as well as future years by about INR 80 crores per annum. The second item, we have made provision of INR 51 crores. There was potential indemnities and other related costs linked to [ V65 ] for the wind project with expected delay in setting up the wind power project. The third item is about INR 48 crores provision, doubtful debt provision we have made in last -- in Q4 FY '20 for our franchise distribution business, which is due to COVID lockdown. The last 1 here, positive side, which about INR 22 crores we have accounted for as a regulatory GAAP based on the favorable orders from the regulators in our license distribution area. Considering these 4 nonrecurring items, there was a net charge on P&L of Q4 FY 2020 of INR 1,077 crores. Adjusting for above one-off items of Q4 for current quarters as well as the previous quarter -- comparable previous quarter, and this is attributed to anticipated PBT for the quarter stood at INR 404 crores as compared with INR 2,384 crores in corresponding quarter of last year. PBT is up by about INR 20 crores. To adjust the PBT of INR 20 crores in the current quarter is higher mainly because of there are about 5, 6 reasons out there. First reason is the gross increase, gross reduction in finance cost by INR 59 crores attributable to the lower rate of interest as well as reduction in average rate -- average repayment for the quarter. We have made a repayment of about INR 350 crores in the quarter apart from the normal repayments. We have not contracted -- not taken any new borrowing during the course of the quarter. The average interest rate for the quarter was lower by 150 basis points as compared with the corresponding quarter of the last year. On overall basis a year as a whole, we have, in fact, reduced our gross debt by more than INR 1,000 crores. The savings in finance costs has also partially impact -- offset by the reduction in the treasury income also, which is about INR 8 crores. This is mainly because of the lower -- carrying lower treasury balance as well as lower yield in the -- on the treasury portfolio. The third item is the -- we have a gain on sale of our excess on our LNG, and we have made a profit of INR 50 crores out of sale of the LNG. The fourth item is that there is a subdued wind power -- in case of wind power, there is subdued generation and which is due to lower wind speed, which has impacted the profitability by INR 21 crores. The fifth item is there is a higher T&D losses. Still, there are higher T&D losses in our license distribution business in Q4 as compared with FY '20. In there, we have lower saving because of the higher T&D losses, which has impacted the profitability by INR 23 crores. And still in franchise distribution area, we are reporting higher T&D losses compared with the comparable quarter of last year, which has impacted the profitability by INR 38 crores. However, there are substantial improvement in our financial performance of the quarter on a quarter-to-quarter basis, reflecting improving conditions in the economy. This can be substantiated from the fact that the demand growth for our company in Q4 was 11%. It's higher by 11% on a year-on-year basis. If you can give the breakup, then the 2 license distribution has grown up by 13%, and franchise distribution has grown up by 7%. This is compared to the Q3 of the last year and current year. It has shown a remarkable improvement. There was a degrowth in Q3. In license distribution, there was a degrowth of about 1%. And in franchise distributions, there was a degrowth of 3%. Moving on to the PAT number. Considered PAT reported for the quarter was INR 408 crores as compared to loss of INR 290 crores in corresponding quarter last year, which was higher by about INR 698 crores. Coming to the tax numbers of -- tax number Q4 of the last year as onetime accounting of deferred tax assets, and we recognize and utilize MAT credit in the last -- in the course of last year. This completes the overview of the quarterly performance. Now I request the participants to raise any questions which they have on performance of the company in Q&A session. We wish everybody to have a safe -- stay safe and healthy lives. Thank you. Handing over to the moderator.

[Operator Instructions] The first question is from the line of Bhavin Vithlani from SBI Mutual Funds.

Congratulations for a good set of numbers. So my first question is on the distribution circles, all the 4: Ahmedabad, Surat, Bhiwandi, Agra. If you could help us with what is the percentage contribution from the commercial and industrial consumers on the volumes? And how are we seeing the volume traction over the last 2 months -- April and May, June date?

I mean in terms of composition of volumes, we talked about for Ahmedabad. Ahmedabad is -- industrial and commercial was about 38%. Ahmedabad industrial and commercial is 62% last year, '19/'20. This year, we -- it is about 58%, so there was 4% in terms of industrial consumption -- commercial as well as industrial consumption in the case of Ahmedabad. Well, in case of Surat, also similar patent was there, 75% is non-industrial consumer and -- in '19/'20. And the current year, it is about 71%. So there's a decrease about 4% in the Surat also. In the case of Bhiwandi, non-industry and commercial was 91%.

92%.

91%, the same -- even there is no change in the composition, I would say. And Agra, also same percent, it's 43% other than retail consumer. So Bhiwandi and Agra, there is not much change. But Ahmedabad and Surat, there is about 4% change in the composition of the consumer.

Sure. And how are we seeing the volume behaviors in the last 2 or 1.5 months of April and May?

We -- Q4, if you look at them, we have -- in license distribution business, we have reported about 13% rise in the volume and 11%, I would say. And in terms of -- I mean we see about 7% increase in the volumes.

Sure. So given the wave -- we have the second wave, which has hit, how are you seeing the year ahead? And lastly, if you could also help us with the CapEx plans for FY '22 and if you could break that into various subsegments.

Yes, I can give you the update about the CapEx plan -- CapEx, which we have incurred for the current year. So though the -- we have impacted by the COVID, but overall CapEx was pretty good, I would say. License distribution business, we have incurred more than INR 1,000 crores CapEx for the current year. Franchise, we have incurred about INR 200 crores CapEx. And some other areas, we have incurred about INR 100 crores of the CapEx. So CapEx was pretty good, I would say. It has picked up in H2. And we maintain our same guidelines about the CapEx for FY '22 also. There are INR 1,200 crores for License distribution business and about INR 250 crores in franchise distribution area.

[Operator Instructions] The next question is from the line of Mohit Kumar from DAM Capital.

Is it possible to share the breakup of EBITDA asset-wise for FY '21 and Q4 FY '21?

I can update the PBIT numbers of FY '21. Quarter-wise or the full year-wise?

Quarter-wise.

Q4, I can give it to you. Q4 [indiscernible] PBIT area of INR 143 crores. And our renewable generation about INR 88 crores. Licensed distribution of INR 183 crores. Franchise, INR 154 crores. And total PBIT, we have made about INR 557 crores. So this is before one-off items. This is before one-off items. So one-off items are the INR 238 crores. We have accounted the gain, fuel cost adjustment, which was -- which means we charge we have taken in the last Q3, which we have got reverse in Q4. And INR 13 crores, that debt provision, we have reversed in our franchise distribution area. So we have record more in current quarters. So this accounts on these 2 one-off items. And finance cost was net of about INR 153 crores. So this is the breakup about the PBIT business segment-wise for the Q4.

The line for the current participant is disconnected. We move on to the next question. The next question is from the line of Aniket Mittal from Motilal Oswal.

So my first question was actually on the DS business itself. Obviously, the 3 normalizes. If you could provide us maybe an outlook for FY '22. What sort of, let's say, AT&C losses can be looked at from a full year perspective as well as power demand in these 2 circles? How do we look at that for FY '22.

As far as franchise business is concerned, if you look at the COVID in Q1, Q2, Q3, Q4, there were good progress we have made in the franchise distribution area. I can give you the example, like in Q1, given the T&D loss of about 25%, and we ended up the year with the average loss of 16%. So there is a fair good amount of progress we have made to the -- it was not comparable with the last year. Last year, it was about 12% in the case of overall T&D losses. But we made a good progress in terms of T&D losses in the case of Bhiwandi. In the Agra also, when we have started the year with a COVID, the T&D loss is about 23%, and we have ended up with about 13.5% T&D losses for the Agra also. So Agra also, we made a good progress during the course of the year in terms of improving -- concerning the T&D losses. So it was not comparable. Last year, full year T&D loss was about 12.5%. So it's 1% higher as compared with the last year. But even though the current situation because of the COVID, we have made a good progress in terms of T&D losses also. In terms of collection efficiency, in Q3 and Q4, we are crossing more than 100% collection efficiency both in case of Bhiwandi and as well as Agra. So -- and that is why we are making the past recoveries of the bad debt provisions we have made up to H1.

Yes. So Aniket, just to add to Saurabh Bhai, I think your question was FY '22 outlook. So as such, we don't provide any outlook per se. But if you look at the trend in which we have progressed in terms of quarters, so Q4 being much better quarter. And that also gives you a highlight of how FY '22 should look like. So all our aim would be to reduce AT&C losses or T&D losses going forward on a gradual basis. So COVID now being a thing of past as of now, we expect that it should improve going forward. And we should be back in the trajectory of reducing the AT&C losses.

So from a demand perspective, let's say, April, May, have things sort of normalized?

For example, Bhiwandi, there will be some impact on material impact, like we saw the lockdown like in month of April '20 and May '20. So some impact will be there, but not material, I would say.

So Aniket, there is lockdown, but then industries are still running to some extent. There was an impact on the commercial segment, but not much on residential and industrial segment.

Okay. Sure. Just to get a better bit of understanding in terms of, let's say, AT&C losses, would it be fair to assume that in FY '22, we're looking at more of a normalized number as to what we were in FY '20? That'd be a fair assumption to make?

So the idea is to keep on improving on the past numbers, FY '20 being the base. As far as projections or forecasts are concerned, we will not be able to share those outlook numbers.

Okay. So maybe on collection part as well. I think if I remember correctly, over the past few quarters, we have done a provisioning of somewhere close to INR 150 crores, right?

Yes, exactly.

And we have recovered around INR 43 crores, if I'm not mistaken?

Yes, exactly. Perfect. Yes.

So the balance, we expect that to come in this year as well?

The balance, if you look at the composition, we have 3 franchise distribution, Agra, Bhiwandi and SMK. So we are expecting that Bhiwandi and Agra will be fully recovered. SMK being a new area, surely, it will take some time to further recovery.

Okay. So some amount of this would be for SMK?

Yes, for -- some amount of this will be from SMK. But Bhiwandi and Agra, we are hoping that we are able to recover in next 2, 3 quarters.

Sir, my next question is actually on the interest cost. It was a very sharp reduction that we've seen in the cost of borrowing. And if you could just highlight me what the average cost of borrowing right now? And are there any further resets that we can expect in FY '22?

The borrowing increased, there's about 100 -- 150% -- 150 basis points down as compared with the last Q4. So we've got to have a significant reduction in terms of rate of interest. Our average borrowing cost is about 7.75% as of Q4.

[indiscernible]

And I think interest rate is stabilizing. So stabilized, I would say. So it will be around that level also.

87.

About 7.75%.

Next question is from the line of Bharani Jeykumar (sic) [ Bharani Vijayakumar ] from Spark Capital.

Yes. So can you give the split of EBITDA for FY '21, like you gave for gas, renewables, license distribution and franchise distribution?

We gave it for PBIT numbers we have shared. So that should be okay.

We -- if we could ask last...

FY '21 also. Full year.

Okay. So I give you the PBIT numbers of full year. So gas is about INR 662 crores. Then renewables -- this is other than one-off item. This is normalized PBT we are talking about. So renewable about INR 374 crores.

How much gas?

INR 362 crores. Renewable, INR 374 crores. License is INR 838 crores. Franchise is INR 478 crores. And total is INR 1,992 crores, close to INR 2,000 crores.

Okay. And after one-offs?

After one-off is a PBT number. Then after one-off, PBT is about INR 1,552 crores.

So how does this compare with FY '20 numbers, the same PBIT, sir? Same 4 numbers?

PBIT is INR 2,000. If you want me to make...

Yes, same comparison like one-off.

Gas is INR 288 crores. Renewal, INR 430 crores. License is INR 954 crores. Franchise is INR 761 crores. And total is INR 2,374 crores. And PBT numbers reported is about, before impairment, INR 1,475 crores.

Okay. Before impairment.

Impairment of INR 1,000 crores, it is INR 1,475 crores. So comparable number, PBT reported number is INR 1,552 crores for the current year, FY '21. And last year, it is INR 1,475 crores before impairment.

Okay. So according to you, this INR 119 crores to PBIT bit in FY '21, so how much can this be for FY '22. Or say, without an impact due to COVID in FY '20, for example, how much can it go back to?

We can't give the guidance for FY '22. We can give a historical number, but we can't be able to give the guidance about FY '22.

Okay. And the profit that we earned this quarter in the sale of LNG, so that is part of which segment that you mentioned here? Is it a part of the gas?

Gas products.

Okay, okay. And this is, of course, higher than about INR 50 crores of profits we'd earn in selling merchant power. So this would be probably...

Merchant power is very small amount, but the gas contribution is much higher this quarter.

Right. So what is your view on how this will move, this sale of the LNG, this number because now prices are again coming up?

Yes. So we are -- it's depending upon the opportunities available. So we can't talk about on a -- we can't -- based on the opportunity available.

Okay, okay. And can you broadly give a sense of our endeavors in the new areas where, say, distribution, privatization or franchisees, opportunities opening up? How would our efforts and strategy be going forward in terms of bidding, et cetera?

In terms of -- the government is very keen to privatize union territory force, and then I think state government will see the benefits of the privatization, and they will also start doing it. That is what our perception is. So government has started with the Daman, Dadra Nagar Haveli and D&D. So they -- so private Chandigarh also. So Dadra -- we got the -- we are -- we got this Daman area. This matter is currently subsidized. So -- and Chandigarh, also, we have bidded for Chandigarh, but the financial bid is not yet open. So we are seeing that the government is opening up the union territories. So -- and so we are participating in the bidding.

Okay, okay. And how about our efforts in renewable space and the transmission space?

In renewable, like case to case, still, we are bidding the project like we won about 3 megawatt with the TPLD. So in Andhra Pradesh, also, we won 3 megawatt in the case of currently subsidized. So on a case to case, we are evaluating and we are participating in the bidding.

Okay. So the current 800 megawatts in renewables, any outline strategy number we have in mind as to we will reach so much in the next 3 to 5 years in terms of capacity?

So Bharani, we don't have any outlook numbers per se in terms of renewables, as Saurabh said. We'll keep on looking at each and every base and then decide whether to bid or not, but we don't have any specific targets in mind that we want to reach a particular target for renewable generation 5-year hands as of now.

The next question is from the line of [ Anish Kapadia ] from HDFC Securities.

Can you gave a breakup for the T&D loss of franchisee segment, Bhiwandi and Agra? Can we get it for other subsegment as well, Ahmedabad, Surat and Kalwa, Shil area for FY '21?

I can give you the Ahmedabad number. Ahmedabad number, any loss was about -- it's a full year number, it will be more 11 in case of license distribution.

Also, full year on...

So last year, '19/'20, about 4.98% on the T&D loss for the full year. And this year, we ended up with 6.03%. So there was some increase in P&L losses mainly because of the -- we lost our industrial consumption -- consuming in -- consumption in H1, so which has impacted the overall T&D loss for the year. So 6.03% is the number for the full year. In terms of Surat also, last year, it was 3.40% for the full year. And the current year, we ended up with 4.06%, 4.06%. And the hedge also, it's very small amount, 0.31% in the last year. In current year, it is 0.4.9%.

So 1.31 (sic) [ 0.31% ] last year and 0.49% this year, right, sir?

Yes, 0.49% -- 0.31% last year, 0.49% this year.

These numbers are already there on the presentation, which are uploaded.

Okay. Sir, you mentioned about the growth in licensee and franchisee, 11% or 7% effectively. Can we then break up as well how much was Ahmedabad, Surat and subsegment by [indiscernible]?

Ahmedabad Q4, it is around by 12%. Ahmedabad, it is 12%. Surat is about -- we've grown by 15%. The rest is about 25%. Bhiwandi about 7%. Agra is about 8%, and SMK is about 4%. So distribution license of -- sorry?

This was for Q4, right, sir?

Yes, this is for Q4, yes. So license distribution, over a 13% growth for the current quarter as compared with the comparable quarter of last year. And franchise, about 7% growth. Overall, we grew by 11%.

Fair enough. In terms of -- can I get the level for Q4 last year as well? FY '20.

This number I had given is compared with the last year Q4 numbers, growth numbers.

The next question is from the line of Noel from Ashika Group.

Just most of my questions have already been answered, but I just want to just clarify one figure. So the segmental EBIT for the distribution franchise business is about INR 478 crores for FY '21?

FY '21, INR 478 crores, yes.

And the previous year was what figure exactly?

INR 761 crores.

INR 761 crores. So this decrease is attributable primarily due to the COVID impact as in the company...

Yes, yes, yes. And so mainly in H1, really. Really, it is because of the COVID and most of the loss we have incurred in H1.

The next question is from the line of Subhadip Mitra from JM Financial.

So just a clarification on that FY '21 PBIT numbers. I think for the gas base plants, what is the number for FY '21 and FY '20 that you mentioned if you have those numbers?

Yes, the PBIT for the full year is INR 362 crores for the current year, FY '21. In FY '20, it was INR 288 crores.

So this is basically, this was the one-off adjustments, which we just mentioned.

Correct. So this is -- so as in -- these are net of the one-off adjustments? That's what you're saying, right?

Yes, yes. Correct, correct.

So the largest impact in PBIT on a Y-o-Y basis, if I am to look at, is primarily on the franchise part of it, where there has been a large reduction because of the COVID impact. Am I right?

Absolutely.

So here, so on this aspect, I mean looking at the second wave and other things. I know you mentioned that industrial activities have not been as badly impacted as last year. But overall, let's say in April and May, is there any sense of what kind of demand disruption that you may have seen in franchise? Can you give us a sense?

Some reduction will happen because some total lockdown has a restriction, some reduction is going to happen, but I would say...

Any ballpark range?

You can assume -- one can assume about -- with FY '20 -- April '20, we can't compare the affected number. So we can't compare.

Last year, correct....

Compare with the '19, about 5%, 6% reduction would be possible, I would say -- would be there. 5% only. But Subhadip, I think you'll have to understand these are only April numbers. And once you move towards May and June and if things start improving, I think we can see reversal in this sense.

You can make it up for the rest of the year. That's what you're saying.

Yes. Exactly, exactly, exactly.

Valid point. Valid point. I understand that. Secondly, so in terms of the merchant-related profits that we would have made for full year FY '21 versus FY '20, would you be able to share that?

Yes. I can share you -- share with you. Last year...

Full year.

Okay. So last year, we sold about 1,600 MUs, and we made about INR 153 crores profit from the merchant. And this year, about 1,500 MUs or INR 70 crores profit we have made.

Okay. So this is largely -- so the reduction -- because I think the volume numbers are not very different, but the profit numbers have changed quite a bit. And this is despite the fact that, I think, merchant prices were on the upswing in the current year. So any particular reason why the profit number has halved?

I think you can see from the January onwards.

So basically, Subhadip, all this merchant power sales happened in H1 of this year. And typically, that is how things work in terms of our merchant sales. So if you see H1 of this year, there was a drastic reduction in merchant power rate, but comparable gas power rates are also lower. And that's why you are saying that we have made profit even after such a low rate in H1 on merchant base rates.

Okay. I understand. I understand. Now lastly, on the Daman and Dadra Nagar Haveli, the franchise, which is currently subsidized. Is there any progress there or any update on that, that you can share?

We can expect some hearing to happen somewhere around June, July. So we are waiting for the hearing to happen.

The next question is from the line of Sumit Kishore from Axis Capital.

Sir, for the solar PPAs, which have been signed so far 200 megawatt, what is the CapEx you expect to incur there in this financial year? And could you also comment on the expectation on IRRs, especially in light of the fact that polysilicon prices and PPAs here and also certain Chinese players trying to negotiate on the [indiscernible] procurement by developers in India? That will be my first question.

So as far as the CapEx cost is concerned, all put together for the 400 megawatts, we are expecting around INR 1,600 crores to INR 1,700 crores. Roughly INR 4 crores on a ballpark number, INR 4 crores per megawatt. As far as cost of modules are concerned, I think assuming we are trying to see what we can do in terms of utilizing the contingency which were there, and we expect that we will be able to maintain the ROCE and IRRs, which we have given. But we are trying to look at the situation right now. As far as another 300-megawatt of PTLD is concerned, I think we are slightly better off in that because the tariff [indiscernible] is 2.22, and there was some contingency which we put in as far as model cost is concerned. So that, I think we will maintain a low-teen IRRs there.

Okay. What is the CapEx that you incur this year? And what exactly is this contingency that you're talking about? Could you please elaborate?

So when we bid a project, we keep certain amount of safety margin. So I'm talking about dipping into that contingency of the safety margin, which we would have kept. As far as CapEx amount for this year is concerned, I think you can assume 50% to 60% of the total project cost will be incurred this year, and the balance should get deeper to the next year.

Okay. So my second question is, could you give us a sense on what is the EBITDA and net loss contribution from DGEN in the last financial year? And what would be your medium-term outlook or strategy for this project? I mean I know in your presentation you also mentioned the possibility of flexible generation to self [indiscernible] power with renewable and gas. Could you please elaborate on your road map of DGEN and performance in the period?

So your first question is in terms of EBITDA from...

EBITDA and net loss contribution from DGEN?

And sir, we will have to look at the depreciation and interest cost as a net charge on the P&L. So if you just combine that, it would be roughly around INR 400 crores because merchant sales, we look at on a company level basis rather than looking at on a plant-on-plant basis.

Okay. So INR 400 crores is for the full year?

Yes. Full year. Yes, yes.

So what would be your medium-term outlook and strategy for this project here?

So as far as DGEN is concerned on a short-term basis or a medium-term outlook, it will have to be dependent on the merchant sales, which we keep on doing on a year-on-year basis. If you look at -- I think COVID being a difficult year, apart from that, we have been able to improve the PLF of DGEN on a year-on-year versus '19. So some 6% PLF, FY '20. So around 8% to 9% PLF in DGEN. So on an incremental basis, we look to improve the utilization of DGEN on a merchant basis. But on a long-term basis, I think we will have to look at long-term PPAs to be signed, which are very far and few to come as of now.

Okay. My last question is, could you provide an update on the regulated equity base for the distribution licensee business that you have? And any change in the regulatory asset position as of FY '21.

Regularly equity as on March '21, our distribution business is about INR 2,772 crores.

Okay. I actually want to break up between Ahmedabad, Surat and Dahej.

License distribution, I am talking about. Ahmedabad is about INR 2,032 crores. Surat is INR 697 crores. And Dahej is about INR 44 crores.

AMGEN will be over and above...

AMGEN is about INR 427 crores over and above this distribution thing.

Okay. And for regulatory assets?

Regulatory asset, we have about INR 1,500 crores, regulatory assets. Out of which about -- recognize of 1,000 -- INR 1,100 crores, INR 1,100 crores.

So what is the total regulatory equity base and regulatory assets at the end of FY '20 standard as for comparison?

'20?

Yes.

'20 was INR 1,658 crores.

Regulatory asset.

Regulatory asset.

And REB?

Sorry?

And regulatory equity base at the end of FY '20.

'20 is INR 1,658 crores.

No, no, sir, regulatory equity base.

[ 318 ].

We'll give it to you sometime.

Sure.

The next question is from the line of Mohit Kumar from DAM Capital.

What is the kind of existing gas tie-up we have for FY '22 and the price at which we are locked in currently?

We have booked about 8 cargoes and gas price about $4.36.

Okay. And second, does it make sense for us to participate in the -- some of the bids which happened in the -- for domestic gas sales? Do you think it makes sense for us to tie up in longer term from this?

Yes. We are participating. Yes. Yes, we are participating in domestic gas deal.

Okay, okay. Understood. Sir, what is the reserve of franchisee area right now? And what is the amount written back for entire FY '21? I think you spoke about it, I missed on that number.

So see, we met that provision which we have made up to H1 is about INR 150 crores, Q4 as well as H1. After which, INR 31 crores we have recovered in Q3 and INR 13 crores we were recovering in Q4. So net amount is about -- net amount would be about INR 105 crores as of March 31.

Understood, sir. And sir, what is the -- this -- I was thinking of coming up with MYT regulation. Is that postponed right now?

It's postponed...

By 1 year. Yes, it is I postponed by 1 year.

The next question is from the line of Aniket Mittal from Motilal Oswal.

Most of my questions have been answered. Sir, just one question actually on the wind part. We've again seen despite a higher capacity addition, the wind being a bit lower in 4Q as well. And there, I think, have been some media articles highlighting that the wind patterns or wind players themselves may not necessarily be what one was expecting them to be. Just heading into FY '22, I mean I just wanted to understand your sense over the reason for, let's say, a decline in the pillar in 4Q as well. How do we see it going forward?

It is mainly because of wind resources are lower this year. So this is a -- we would say it's an abnormal situation in the current year. We hope that the situation in resources will be normalized going forward.

Okay. Is there anything -- structurally, is there something that's changed? Because we've been hearing a lot of people taking certain change in environment that's actually impacted the patterns happening for wind itself.

It's a one-off kind of a situation for the current year. That is what one can see.

So it's too premature to say anything as of now on that.

To make a conclusion after 1 year.

Sure. Sir, my next question, which is on this LNG trading income that you've got. Just to clarify, this entire amount, is this in 4Q itself? Or is it more like in FY '21 on the RNG profit that you mentioned.

Q4, Q4 only.

Okay, okay. And so this is over and above the INR 38 crores recovery that you've got.

Yes, exactly. exactly.

Okay. So does this INR 38 crores recovery, there's a INR 50 crores profit on RNG, and then there's a INR 14 crores recovery of areas as well. So that understanding, correct? These would be the 3 one-offs them?

Yes, exactly. Yes, it can't be cleared as a one-off because we generally regularly are doing it. So this INR 50 crores gain cannot be tied as one-off items.

Okay, okay. And what would be that number for the full year?

INR 50 crores only, INR 50 crores.

Okay. And why has it then -- particularly coming this quarter in this INR 50 crore, if you could just explain that to me.

We got good opportunities. We have -- we sell it. We sold it.

Okay, okay, okay. Just a couple more questions, please. One is, sir, on the solar projects that you've actually spoke, could you help me with how the pays for those 2 plants can deflect, which is the 100-megawatt GNL pant in the TPC 300-megawatt plant. What sort of PLF are we looking at?

So Aniket, right now, for our latest last estimates, we had said that it would be roughly around 28%, 29%. We are reworking on that. But as of now, it should only 28%.

Okay. Are you working -- are you looking at different models? Is that so?

We might look at deploying different strategy there. But as of now, not decided as of now. So I think we should work at right now 28%.

28%. And just an update on the under polished bid that you've made. I think you were also L1 over there. So any update on that part?

It is subsidized.

Thank you the next question is from the line of Bhavin Vithlani from SBI Mutual Funds.

So this question is relating to the provisions that we made for the second bid if you could give us an update. Have you seen cash outflows? Or there are still provisions?

It's a provision. So there is no cash outflow so far. So provision on a conservative basis, we have made provision for 2 projects last year. About INR 213 crores provision we have made last year. So there is no cash outflow as of now we have incurred.

Sure. Are we aware what stage are we? Like any possibility of outcome in this financial year?

We have to see. We have to wait and watch how the -- whether government is giving extensions and whether there any feasibility of revamping it. So I think we will have some more clarity going forward.

Sure. And last question is December '22 was a set deadline for AMGEN retirement. So any update on that? And there's a quantum of reduction in the PPA. How is the distribution circle? Can they tie up with DGEN or they will have to call competitive base?

They have to call a competitive base so as per the regulation. So appropriately, we will take it up with the GRP. I mean we are approaching the date.

Sure. Any change in that '22, December '22 deadlines for retirement?

I think the government is, I think, restate that we can continue with some additional cost. For 20% of our unit cost, we want to pay to the government.

Okay. So how long is that -- that you can continue generating from AMGEN?

So I think by, there is a slight complication here in terms of AMGEN is concerned. It is part of an islanding capacity also for Ahmedabad. So it is not that simple a matter. We are in discussion -- or we'll be discussing this with [ GSE ] over a period of time. But whether they allow us to decommission that plant or thereafter to continue with this plant will depend on the discussions which we have. So right now, it is too early to comment anything on that plant as of now. So even though the deadlines have been extended by paying some [indiscernible] unit, it is difficult to tell as of now when the decommissioning is imposed or whether we will be decommissioning that plant. It's similar to kind of [ Dano ] plant in Bombay, which still operates as of now because of the islanding capacity of Bombay.

The next question is from the line of Mohit Kumar from DAM Capital.

Sir, one clarification. Sir, what is the 375 EBITDA for our renewables portfolio for the full year?

375?

EBITDA for our current portfolio of renewables.

On the full year basis, I can give you the PBIT number.

No, no sir. The 375 EBITDA, expected EBITDA for the entire portfolio.

No. So I think it is difficult to give you that number, per se. We don't give forecast as of now.

No, no, no sir. Okay.

375 as well have to get that number. We don't have that number as of now.

Sure, sir. But sir, what -- how much generation could have been higher given -- expecting a normal year, let's say, from the current generation?

If you look at the PLF, for example, last year, average PLF was about 23% or 24% roughly. And this year, we got about 21%. So this is what the difference is for Q4.

Next question is from the line of Anuj Upadhyay from ICICI Securities.

One clarification on the CapEx front. In the initial remarks, you mentioned the CapEx would be to the tune of INR 1,400-odd crores. [ fabricated ] among INR 1,000 crores within the license segment, INR 200 crores franchise and INR 100 crores others. And later on, you mentioned that of the solar -- for the 400-megawatt of solar under construction project, we would be incurring around INR 600 crores of CapEx, the 2 business plans over next 2 to 3 years. Of which, 40% to 50% or could be incurred currently. So is my understanding correct that including renewable, the CapEx would be to the tune of INR 2,000-plus crores?

Yes, yes.

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Harshavardhan Dole from IIFL Capital for closing comments.

Well, Saurabh Bhai, I had a couple of questions from my side, if you don't mind. The first is the LNG prices have seen a substantial escalation in last few months. And we had certain term contracts, which gave us a favorable input price. What is going to be our gas sourcing strategy in such volatile LNG price environment? That's number one. And number two, in case there's going to still be volatility, would our trading contracts give us a similar hedge going forward?

We are watching the situation. Though, yes, we agree that the price has gone up. But our view is that on a medium-term basis, there will be a oversupply. So we are hoping that the price will come down, so it's a temporary situation that is what we currently our view is.

So are we planning to call any long-term bids as of now, which will cover us beyond FY '21 calendar year?

We are waiting the right time to come for the bidding.

And Harshavardhan, if you go for a very long period, it will always be a quality contract rather than price contracts. So you can't go much beyond specific time.

Sure, understood. Second part was in terms of the dividend payout. I mean relative to the cash flows, I think -- do you think that the -- there is a scope for the payout to increase here on? Or you would still prefer to capital and as fire some [indiscernible]?

Our normal dividend policy is 40%. We have -- this year, we have increased 40 -- 30% normal dividend policy. We have an increase of 40% for the current year. So we have increased our dividend percentage to 40% this year. We are keeping the balances in the growth and the dividend.

So basically, earlier policy of 30%. We strive to pay a dividend of 30% of consolidated profit, that we have slightly increased to 40% from 30%.

That's it. That's it from my side. On behalf of IIFL, I'd like to thank the management for giving us an opportunity to host the call and also thank you all the participants for logging into the call.

Thank you so much.

In case you have any further questions, drop me a line, I'll forward to the management and get it answered. Thank you.

Thank you so much. Thank you a lot.

Thank you. Thank you.

Thank you. On behalf of IIFL Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you so much. Thank you.