Torrent Power Limited ($TORNTPOWER)

Ladies and gentlemen, good day, and welcome to Torrent Power Limited Q4 FY '26 Earnings Conference Call. From the management team, we have with us Mr. Saurabh Mashruwala, Executive Director and CFO; Mr. Rishi Shah, GM Finance; and Mr. Jayprakash Khanwani, AGM Finance. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Saurabh Mashruwala. Thank you, and over to you, sir.

Thank you so much. Good morning to all of you, and thank you for joining the earnings call of Torrent Power for Q4 FY '26. First, I will take you through the performance of the quarter, after which we would welcome questions. We'll the performance of the company at, and then I will take you through the tax expenses separately. PBT for the quarter stood at INR 547 crores as compared to INR 619 crores in the quarter of last year, a reduction of INR 72 crores. PBT for the current quarter includes nonrecurring provisions of INR 171 crores arising due to capping of our risk cost for power project in the year FY '24-'25 to a quarter. A similar reception has been imposed in earlier years as well, which was contacted by us and subsequently approved in our favor. As a result, INR 273 crores was recognized in P&L in the previous quarter of the current year. Considering prudence, provision has been recognized in the current quarter. This in the past fiscal, we are reasonably certain that the current matter will be also approved in our reward. For this one-off, PBT for the quarter stood at INR 718 crores as compared to INR 790 crores in the comparable part of last year, an increase of INR 99 crores, that is INR 16 crores on adjustable basis. Tax expenses were lower during the corresponding quarter of last year due to noncash reversal of deferred liabilities of INR 637 crores. And the deferred tax liability is not comparable. Business-wise factors on the performance are as follows: first, repeat of favorable orders from the regulators approved the carrying cost of previous year of INR 186 crores; the system incentive for installation of solar rooftop in Ahmedabad and Surat by INR 58 crores; production in T&D selling in license distribution units due to significant reduction in normative parameters by [indiscernible], partially offset by improved in distribution license vis-a-vis the franchisee business by INR 15 crores. Additionally, the contribution from the license distribution business was supported by the increase in ROE and ROCE on account of capitalized basis and higher rate of return on equity as per new direct regulations and their incentive increase of INR 15 crores. We would like to take this opportunity to apprise certain [indiscernible] tariff regulation with respect to allowance of ROE and ROTE once the assets capitalized. There are two situations: one, of course, is for assets capitalized on or after 2025. [ Retails ] are now allowed on a return on capital number basis, wherein tendering beyond equity is [ pointed ] at a base rate of ROE of 13%, which can go up to 15% based on the achievement of incentive [indiscernible]. This is as compared with the fixed ROE of 14% in the previous regime. For the assets capitalized prior to 2025, the situation is allowing a return on equity on the equity base continuing under the earlier framework. However, regulatory allowed incentive to be approved on these assets also based on achievement of incenting milestone which, in fact, has increased the effective ROE up from 14% to 15%. It is to not set our performance with incentives included with this ROE are over and above the incentives, which were available, which were already allowed in the form of sales in controllable expenses. This effectively has probability to improve ROE by 1% on an annual basis depending on the performance of the license subscription business. Also the regulatory gap for the company has been reduced by almost INR 800 crores, backed by better operational efficiency as well lower power purchase cost with [indiscernible] remains the same as of last year. Contribution from thermal generation business adjusted for nonrecurring items decreased by INR 90 crores, mainly on account of two factors: first, additional O&M expenses incurred in the quarter on a sort of scheduled maintenance; and second, reversal of certain provisions made during the corresponding quarter of last year under the thermal generation side. The third reason is really contribution from the renewal division reduced by INR 20 crores mainly in account of income of generation incentive on account of achievement of statutory time and allowed for the incentive. The other factors, lower profitability, was on account of increase in expenses and depreciation, which was on account of [indiscernible] within the renewable segment and the increase in finance costs baked by the higher capitalization and the related borrowings. This completes the explanation of the financial performance in the quarter. Moving on to the project updates. The progress to commission of 67-megawatt project capacity of the company stood at 5.1 gigawatt as on March 31, '26, comprised of 2.7 giga, 2 gigawatt of renewables and 62 megawatts of GS capacity. Project got commissioned during the quarter. For [indiscernible] 1.6 project in MP are underway, wherein following major milestones have been achieved, first, a powerful agreement executive with Power Management Company Limited; second, later [indiscernible] issue of boiler, turbine and generator as well as balance of plant and clearance for the project. The second project updates on account of hydro pump or hydro project 3 gigawatt of hydro capacity. Activities are underway, where the following major milestone have been achieved. Another storage facility agreement with MS is executed. Second, nature of award issued for a civil and hydromechanical package as well as electric and mechanical [indiscernible]; and third, environmental achieved for the project. Taken as above acquisition, CP comps are underway right now and transaction is expected to complete in the current quarter. Apart from these renewable projects or 4 gigawatt and transmission project of Solapur are under implementations. Further details of the pipeline projects have been summarized in our latest investor presentation available in our website. That's all for this quarter. Now I would request coordinator to open the line for Q&A session. We wish everybody to stay safe and healthy. Thank you so much. Handing over to operator.

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

My first question is, can you please help us again with the one-off in the quarter generation.and explain the nature of the one-off. I think you mentioned [indiscernible], but I missed -- but I could not understand it here.

So one-off item is basically second part of this call, which we have kept it for FY '24/'25 and in the last quarter of -- we got in the last quarter of March. So in the last of March, they have kept the power [indiscernible] particularly. And they have released -- they have made a of around INR 71 crores. That is one-off items for most in power projects. But as we highlighted, we informed that in the earlier quarter, similar allowance was given by INR 273 crores. We made a provision of the year which was allowed by the regulators in the previous part. So we are hopeful that this will also will get approved in due course. .

Understood. And this order came in the March quarter. Am I right?

March, yes. Before March. Before March '26.

Understood. My second question is can you help us with the gas availability and clarify about whether the earning risk to the others, any availability risk of the gas for our gas for our gas-based power plants in FY '27?

So yes, as we informed earlier also, we have contracted 3 cargoes for making the summer demand so that we are getting those cargoes. We are not being impacted because of the war situation between the U.S. and Iran. So summer cargo -- for the making the summer demand, we have contracted 3 cargoes, out of which 2 cargos, we already received it. The next cargo is expected come in the month of June, so for meeting the summer demand. So that, it remains same. And the situation going forward as price has gone up a bit. What we expect, of course, things will stabilize in time and supply will start -- the supply will flow in, I would say, from the state of [indiscernible]. And as far as supply is concerned, our view is that gas -- there is ample amount of gas available in the market, though the price -- because the current situation, price has gone up. But as far as supply is concerned, it's not a major concern, I would say. So availability is not the issue. We will continue to get there towards the fixed cost base on visibility as. Price this year is a bit higher. It will take some time to stabilize.

And my last question on the CapEx, which you did in F '26. Can you help us with the number and also the state-wise CapEx and your expectation of CapEx in '27?

So in terms of -- can I give the fuller details or the quarterly details we want?

Full year details. '26 full year details, yes.

Yes. So license distribution and franchise, we incurred almost INR 1,600 crores CapEx for the full year. [indiscernible] since [indiscernible] has got commission and under construction right now, we spend about almost INR 550 crores in transmission projects. Thermal project, particularly coal-based project, we spent about INR 500 crores CapEx. The renewable is a substantial chunk, close to INR 6,500 crores CapEx we spend for the renewables.

Understood. And the CapEx number for F '27, the expectation?

It will be definitely higher than this. So I would say definitely much, much higher than this amount. .

Is it 2x of this number?

So Mohit, we will not be able to give you any guidance, per se. But investor PPT, we have uploaded, project-wise, a COD date. Guidance would be difficult to give. But what we can say is that current year CapEx, the next year CapEx would be higher than what we have incurred in FY '26.

[Operator Instructions] Next question is from the line of Sumit Kishore from Axis Capital.

My first question is around gas again. Good to hear that 2 cargoes of gas out of 3 have come. What are source countries from which you're getting gas now? And the LNG sourcing agreement, which was with BP JERA, I think which kicks off in 2027, was that from Middle East countries? Or is sourcing not specified in the product?

So the cargo, 2 cargoes, we have got, it's not coming from the Strait of Hormuz. It is other than. So we are getting the cargoes. Third cargo also, we expect we'll get it. So it should not be an issue that currently we foresee. In terms of the support starting from calendar '27 years, it is on with the BP and JERA. And hopefully, things will build be normal [indiscernible] that should not have any material issue than getting the supply in FY '27 onwards.

BP JERA will be how many cargoes in the next financial year?

So in total, both of them combined, around 10 cargoes per calendar year.

For gas? So this is only for Torrent Power or for Torrent Gas also?

Something will be -- we have to allocate for the Torrent Gas also.

How much is the...

Five cargos for Torrent Power.

Got it. And sir, is the pricing in the contract for the 3 cargoes for summer demand this year is around $10 is my understanding.

So Sumit, we'll not be able to give you exact pricing, but these are all fixed cargos, and hence, they are not high as what we see at the spot pricing. We are lower than that spot.

The second question is on the T&D segment. So you explained a couple of nonrecurring items during the quarter. But what I'm more interested in is that after the shift in the return framework, on a like-for-like basis, if you would have calculated your sort of return under the new regime versus the old regime, is that proving to be ROE accretive, and to what extent? So if you can sort of help explain this particular point.

So yes, let me take that question. So basically, if you look at it, the ROE regime, which was earlier was 14% flat, now it has been shifted to ROCE. But assets which are capitalized pre 2025, those will also get incremental incentives if we are able to perform. So if I look at it current year, the ROE is better than what we would have earned under the earlier regime. Now the incremental incentives will depend on the performance-based incentives, which means if you are able to manage that or if you're able to get that, you will have a higher incremental ROE. Assuming that we'll be able to achieve those performance-based parameters ROE definitely will be higher than what we got under the earlier regime.

See, you are already one of the best operating DISCOMs in the whole country. I mean, the T&D losses are 1.5%, if I remember. So what better can you do? What is the performance...

Yes. So it's not only T&D losses, Sumit. It is a host of factors, which also takes care of your availability of network. It also takes care of smart meters, how are you achieving that. It also talks about definitely T&D losses and all. It also talks about our collection efficiencies. So there are milestones being given.

So we hope to achieve the most of the milestone, wherever the current [indiscernible] assigns.

Got it. Then the last question on the renewables segment. So there was a year-on-year decline in PPD IP in the quarter on the renewables segment. So are you also getting impacted because of the curtailment issues? And how are you placed in terms of evacuation for the 4.3 gigawatt peak that you are -- that is under implementation? And so how would you phase out the capacity addition after a rather lackluster year, if I may say so, in terms of capacity addition for power at 250-megawatt plus? What is it looking through FY '27/'28? And what is the phasing? How much will come in first half and second half of the year? You can give some color?

So we not impacted by this scenario, I would say. We have these PPA. So we are not worried at all. All open capacity, very open capacity. So there is no curtailment, I would say, in our renewable power project in supply. So we are not impacted. And we don't expect that there will be some impact going forward also because of the curtailment.

So as far as phasing is concerned, Sumit, so effectively, we expect that next year, there should be 1.2 to 1.4 gigawatt of commissioning. If you look at the phasing, if you look at our investor PPT, we have broadly given which projects are expected to come along with months which are expected to come. So you can refer to that PPT.

Next question is from the line of Satyadeep Jain from Ambit Capital.

Just, first, clarification on the one-offs. So if I understood correctly, generation reported -- reported EBITDA losses, INR 39 crores. You've taken a one-off of INR 171 crores so that gets [indiscernible]. But still, that's a maybe INR 120 crores, INR 130 crores of adjusted EBITDA, which is typically lower than the EBITDA you generate on the regulated assets. So what is driving back? Or is there anything else we're missing? And secondly, on the one-off, would be just clarifying. So 11,000 odd crores transmission distribution EBITDA, you're saying there is INR 186 crores of one-off there. Just clarification on the one-offs.

So Generation, as you rightly said, is the INR 171 crores was a charge we have taken in the generation business, which affected the generation EBITDA. Removing that, there is about INR 90 crores reduction, mainly because of sector on the higher O&M expenses because of actually maintenance. And we've made some certain provisions last year -- I, mean we were revised certain provisions last year, which is not the case this year. Most have impact of the generation EBITDA. In terms of distribution, we got the [indiscernible] order in the month of March, and we have booked distribution income of INR 186 crores. And this is a big picture, I would say. It's not basically -- we don't see whatever one-off because every year, we are getting carrying costs because of the regulatory assets we have built up so far. So it will be a routine feature and we keep on getting this in order as and when the certain items will be approved in our favor.

Okay. The second, on the gas business. You mentioned there are 10 cargoes you have contracted and some will be Torrent Gas and Torrent Power. I just wanted to understand how do you have to show availability? Because 7, 8 cargoes for Torrent Power will not be sufficient for showing 80%, 85% of availability. What do you have to show to get the full carrying cost? Just understanding how that process works? And also at the current gas prices, do you see any potential at all for selling in [ HTM ]? Are you seeing any demand in [ HTM ]? Or do you see any LNG trading in possibility at the current spot levels?

See 10 cargoes, which we have booked from onwards -- we have contracted 10 cargoes, but we always spot market or any other when we require, we can buy it basically. These are the cargoes available only. There's always opportunities available to buy more cargo also as the more demand -- we see the demand coming in and the prices are reasonable. So yes, curtailment will go up based on the demand and the price going forward.

And Satyadeep, just to add. Effectively, if you look at it, last 4 or 5 years, my PPA-based, gas-based thermal power plants, their average PLF has been around 30% to 35%. If I assume that kind of PLF going forward also, 6 to 7 cargoes are sufficient enough to take care of that. Effectively all these cargoes are take-or-pay contracts. So if you assume that 85% PLF and book your cargoes and if that is not lifted by the DISCOM, then you are looking at the take-or-pay MLDs or take or pay curtailments. So what you try to do is manage the flexibility of gas based on the DISCOM demand. And as Saurabh rightly mentioned, that we anyway have spot available if there is a need for cargoes.

And gas is available. So demonstrating the availability is not at all an issue, which we have demonstrated earlier also while referring above 4,000 PLF. So demonstrating ability is not an issue. We will always demonstrate availability because ample amount of gas is always available in the market. .

So you try to show availability based on maybe anticipated PLFs. And in case the demand is higher, because the availability has to be in sync with the schedule. In that case, you would just book cargoes on spot and show availability. Is that -- otherwise, there will be under recoveries there is...

It's always available. So it's a question of pricing, like what price gas is available. So if price is reasonable, we always import the gas, and that is what we did previously also. And we have a fair amount of coverage available next year onwards. So demonstrating availability, we don't foresee any issue. .

And so the possibility of maybe extend at all at current prices or LNG trading at current scope, are you seeing anything in the near term?

Look, so I think at current prices, it will be very difficult to sell power on the merchant prices at current $20 or $16 sort of gas prices. If prices go down, LNG prices, and demand considering what we've seen in last 2 months, if that remains, then there could be a possibility going forward. But for that, LNG prices in the international market should come down.

And LNG trading, things slowed given the current scope. Are you...

So right now, we don't have many cargoes booked. So there is no inventory right now with us for our trading business.

Okay. Just last, very quickly on the leverage. You've obviously exercised the optionality by using capital for Nabha Power and also for MP. Given the leverage that you're looking at right now, is there potential -- are you looking at deploying more capital on any new thermal bids or any other opportunity? Or for now you think you're comfortable to be and maybe execute the projects you already have?

No. So if you look at the power on an investment sale right now and our leverage ratio is quite comfortable, and the comp CapEx also, we don't see that the leverage will exceed beyond our [ size ]. So there is enough cushion available, which is the balance sheet, to take up more project that we are getting the good returns also. So there is no restriction, I would say, in terms of leveraging to take up any further opportunities for investors.

And Satyadeep, all these thermal projects are typically 5, 6 years sort of investment cycle, which you see. So right now, the CapEx cycle or the committed CapEx which we have [ boosted ] FY '21/'22. And if you really look at based on current profitability and the new projects coming in, the leverage is under control. And once the project commissioned, it falls off significantly and EBITDA starts coming in. So we feel that there is still room for us to take on incremental projects as far as thermal is concerned or renewable is concerned considering that new projects will start giving us EBITDA or cash flows as soon as they commission.

The current CapEx basically is well balanced. So we will be able to manage any incremental project coming into [indiscernible] of our CapEx. .

The next question is from the line of [indiscernible] from [indiscernible].

I have two questions. My first question to Mr. Saurabh is, in your point of view, how is Torrent Power preparing to capture future opportunities in renewable and distribution areas while addressing challenges such as regulatory uncertainty, fuel cost volatility and capital intensity? What strategic levers will you be putting into place that we will see in the coming quarters that will help you to sustain the growth and keep the profitability stable? That's my first question. I'll ask my second question after this. .

So in terms of our investment plan, as you know, we have already announced our investment plan of 4 gigawatt capacity, INR 28,000 crores CapEx. Cover also, the.6 gigawatt with INR 23,000 crores. [indiscernible] Comes to 3 gigawatts, we investment down about INR 14,000 crores Distribution CapEx keeps on happening every a gradual CapEx across all our distribution area. And we expect about INR 2,000 crores CapEx at least for 5 years going forward. And we are doing this now. So in terms of CapEx plan, we have a very fairly good CapEx plan, and we are looking then at Torrent Power -- I mean, power sector today is on an investment phase, good opportunities are available, good projects are available. So always, we are ready to -- and our balance is very strong, the balance sheet. And [ per room ] is available for further investment also. So we are quite comfortable, I would say, in terms of our investment strategy. .

My Second question to Rishi Shah is what improvement in financial reporting and analytics are being implemented to enhance the decision-making and investor confidence? How do you see technology and automation contributing to faster, more accurate financial operations in the coming quarters?

So in terms of decision and all those things, as I explained in my earlier remarks also that our success on investment phase, good opportunities are available for players like us and the leverage ratios are also comfortable. So it's not -- and demand is also going to be strong. If you look at the last 10 years CAGR of the power demand, it's about 6% CAGR. And same thing will -- we will see that the same momentum is continuing. Since we have a very balanced portfolio of license distribution, franchise distribution, the generation we have a [ two-part tariff ] available for our key projects basically we plan. And you have some open capacity. So all kind of a levers available to achieve good performance going forward.

Next question is from line of [ Sami ] from Avendus Spark.

Yes. Am I audible?

Yes.

So what is the adjusted EBITDA for 4Q FY '26, sir, given the adjustments that we will be making in the generation segment and in the distribution segment happening for that? What would be the adjusted EBITDA?

So for the quarter, EBITDA reported is INR 1,320 crores. And one-off is INR 171 crores we are charged. So we had INR 171 crores in the reported EBITDA. That's the adjusted EBITDA for the current quarter. .

Sir, we adjust on the INR 186 crores in the transmission and distribution segment?

So I explained this. It's typically more. Since we are carrying regulatory asset, it's bound to happen as we are going to get the carry cost as a most of the orders come in. So it's a normal feature, I would say. It's not -- may not be considered a one-off. That is what our -- so it's a normal features. It's all, I would say, not only towards with all the distribution company because they are selling regulatory assets, and they will approve our carrying costs every year.

So we are not considering that as a one-off as Saurabh has explained.

Okay. When it comes to the generation segment, when I'm adjusting for this INR 171 crores, we reported minus INR 39 crores. So the adjusted EBITDA comes to INR 132 crores plus compared to INR 233 crores for FY '25 same quarter, that is the fourth quarter. So this drop you are telling is because of what reason, sir, that I missed? .

So the first reason is on account of some scheduled maintenance in our [ gas ] with the course of the quarter, which has cost us additionally INR 50 crores. And there was some reversal, which made the last -- similar quarter of last year, which is not the case currently in the current quarter, which had impact the performance of the generation business.

Okay. And usually, there is some LNG gain or merchant gain in this segment? I'm assuming there is no such number in this particular quarter?

Q4 is always a winter month. Winter quarter would be less [ mercantile ] and LNG sales. So if you look at the both quarter comparable quarter last year in the current quarter, there were no material, I would say, gains to be reported, I would say. Some gain will be there, but not material, I would say, which we can talk about.

Okay. And one final clarity on this SUGEN power purchase cost, which is resulting in this INR 171 crore number. So is it because the regulator is yet to approve this INR 171 crores of extra cost incurred in FY '24?

They have put a cap on the cost, basically. Up to a certain amount, they have approved. Beyond that, they said as of now, they are not approving it. But we will -- similar situation have happened earlier also. And in the last quarter, in Q2, they have approved -- they have removed the cap and approved full power purchase cost. So we expect that we'll file appeal and the decision will come in our favor going forward. .

Okay. And coming to the renewables segment EBITDA, which is at INR 186 crores. This is even lower compared to last year's same quarter despite capacity additions. So how should we read that?

Yes, it's a flattish number. Some reduction is there because of the GBI even one of the projects is getting expired. This inspires over. So we -- there is -- there was really this is because of the many reduction in the GBI income. So that has impacted the EBITDA for the current quarter. .

Sorry, I didn't get. What is the GBI income?

Incentive which government give for the renewable project for a certain period of time, 7 to 10 years. That has expired. Facilities that benefit was completed. So that was not available for the current quarter. That [ enables ] the profitable renewable segment. .

Understood, sir. So when would we have Nabha Power numbers getting consolidated? .

We expect in the month of June, we'll be able to complete the transaction because currently, the Nabha LNG is in the process of complying the CP, commission [indiscernible] So once it will happen, we'll consume the transaction before the in the current quarter. So we expect the June numbers will meet the Nabha Power project. .

Okay. That is 1Q '27 we'll have consolidation of Nabha? .

Yes, that is what is currently we expect. .

Okay, sir. And final question is on our gas supply. If my understanding is right, we have 3 cargoes from IC and Reliance and 3 cargoes for the summer demand. And we also have that Japan cargo that we have booked from calendar year FY '27. So if my understanding is right, so with all these cargoes, would we be able to first have the availability for SUGEN assured for FY '27, plus also generate power during the summertime in the next 1 year also?

No, Your understanding is not right. I would say in terms of first point about the [ UCL ] and gas, it's not 3 cargoes. IOCL currently is in the [indiscernible] They were getting the gas to the Qatar. So nobody is getting the gas from the IOCL right now. In terms of ONGC and the Reliance Gas, which is a domestic gas, it was a government has pulled the cargo, pulled all the gas so that they can supply to the private sector requirement, like CGD and the fertilizer kind of things. So power sector comes later. So those gas is not available to the power sector. So we are not getting the gas because the government has pulled the gas of Reliance and ONGC. So there is not available. In terms of your points about 3 cargoes, yes, the 2 cargoes we have received, One cargo is expected to get in mid of June. And any further requirement, we can meet the for [indiscernible] or maybe short-time contracts we've been able to do the course of the balance feed of the year. And in terms of cargoes coming in from the Japan and the BP basically, we'll keep on getting from the next year and onwards. So that will continue.

So right now, with the 3 cargoes that we are getting from summer demand, we are meeting availability of SUGEN, UNOSUGEN, and also we'll be able to generate if required from DGEN plant. is the understanding right, sir? .

So we 3 cargoes it's available for our distribution. We are optimizing our business requirement and supply meeting the availability criteria. Any additional gas available through this optimization will be used for the merchant seller.

And you mentioned in one of the replies that at $16 to $20, it's difficult to make money in the merchant market. Just wondering, given it will come to variable cost of around INR 19, the high-priced DAM market will have merchant prices higher than that. So just wondering why would you say that?

No, we are not saying that it will be difficult. So what we are saying is on the RTC business would be difficult. But on the peak market, which is our target market, we are able to do something about the fee market, not the RTC.

But you can't buy a cargo only for the peak market. So you need some basic demand for RTC, wherein you then book the cargo and then supply. So it is not the peak market for which you buy a cargo. So there are logistical issues also involved.

So with our peak cargo, we are optimizing our overall demand requirement and then doing it.

So final two questions. With the Japan BP cargo coming from next year, would we have enough comfort for the full year in terms relying on the summer cargo? Will that be the right understanding? .

Yes, With the JERA and BP cargo, yes. And additionally, we can always buy the spot cargoes, do the short-term contract, will be enough to host the availability for SUGEN and UNOSUGEN .

Okay. That's it. Pardon me, last question. On these 3 summer cargoes, we said we got 2. So does that mean that this is coming from the [indiscernible] source?

Yes, you are right.

The last cargo that we are expecting in June would also be [indiscernible] so it may not be impacted. Is that understanding right? .

Yes. You are right.

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

Just one clarification on the CapEx guidance which you mentioned. So roughly, you mentioned it's around INR 28,000 crores for renewables, INR 26,000 crores for whole and INR 14,000 crores was for the PSP. That takes the total to roughly INR 68,000 crores, plus your normal distribution CapEx to the tune of INR 1,500 crores or INR 2,000 crores per annum. That takes the total to INR 80,000 crores for a period of 5 years. Is this a fair assumption if we assume that annually there's no upward change in the range of 15 to 20...

Coal you said INR 26,000 crores, which is about INR 26,000 crores. Only one correction.

Yes, yes. Yes, INR 26,000 crores, sir. So total INR 80,000 crores over the next 5 years. Is that a fair assumption?

Yes, you can take this kind of assumption. We are working with..

Okay. And I know like if you go just to phrase it out, I believe probably second or third year onwards, it will be heavy CapEx depending upon the milestone which we are achieving on the construction phase. So any...

You're right.

Okay, okay. Fair enough, sir. And secondly, sir, on the connectivity part. So can you just mention how the connectivities are placed for the upcoming renewable projects?

Connectivity in most of the projects are in place right now. So connectivity is not the issue, but upcoming transition which has to come in on time so that we can execute or implement all of our renewable projects on time as per the expected schedule, I would say. So otherwise, connectivity is not an issue for our renewable projects available for the almost most of the project, I would say.

Okay, sir. Lastly, any development on the panel assessing?

No further development at this moment.

Next question is from [ Lapur ] from Jefferies India.

Sir, I just had a question on your merchant LNG gain. So you said, of course, 4Q was not material. But for the full year, could you maybe quantify how much was the overall gain during the year and how many merchant units for all?

So we don't bifurcate it between LNG sales and merchant. If I look at the total gains from both of them, it would be around INR 675 crores for the full year. In terms of units, what we sold, it would be around 1,400 MUs.

Got it, sir. And just to understand on your Nabha Power acquisition. So could you -- this is INR 6,900 crores acquisition. How much would be the debt component and equity component? Do you have sense of a rough split? And secondly, how much of this could -- second question on Nabha would be how much of this would add your fixed asset base going ahead? And thirdly, what are the tariffs you are looking at in Nabha Power, on that plant?

So in fact, it's an acquisition enterprise value as we announced about INR 6,800 crores. And equity value, we have INR 3,400 crores today, the balance is the equity value. The plan is about INR 3,000 crores to INR 4,000 crores for the funding of the project. And tariffs will be a two-part carry basically. So variable cost is passed through. That is what the business model of Nabha is.

Would you be able to share what kind of tariffs we are expecting, at least on the specific side?

We don't have information available right now, but we can share the information off-line.

Next question is from the line of Dhruv Muchhal from HDFC AMC.

Sir, a few questions on the renewable pipeline. So the MSEDCL project, when should we expect the COD?

So in fact, see, out of 67 megawatts, most of the capacity, we have commissioned, some capacity is not commissioned because of the locations of the land which we have got it from the government, which is not ideal, suitable. So we have asked for the replacement from the government. So basically leased land which was provide by the government. So we expect the replacement of the government, and we expect the next 6 to 9 months, I think, it should get replaced.

So you can do partial billing for the portion of the capacity that you have commissioned?

Commission, we have started the billing. So noncommissioning is not an issue because we [indiscernible] located various locations of projects. We have a solar project in [indiscernible] area. So once the issue is sorted out, in fact, whatever capital we have commissioned, we are starting the billing also.

Got it. And sir, for the well project COD?

COD, we have mentioned -- so we have applied extension there. It will take some time.

So should I expect, say, sometime in FY '27 to '28?

'27, I think before March '27, it may well get much.

And sir, are you still going ahead with the merchant power -- 600-megawatt merchant project? Or are there any changes? .

So we are doing that project. But Dhruv, if you recollect our past interactions, what we have said is that all the merchant right now is merchant, we are commissioning those capacities. But as and when going forward we win any tender or bit, we will be allocating that to those bids. So effectively, it may not remain merchant for the life of the project.

Yes. You go ahead with the project construction and everything. You're going at..

Yes.

Yes, yes.

And lastly, we have seen that a lot of developers are doing the switch to batteries because you also have a lot of [ dry ] projects and hybrid projects. So any configuration changes in your projects? And any cost reduction or probably improvement in [ IRS ] that you're seeing? .

Not as of now. I think most of the projects have a small battery. So some of our projects which are hybrid or RTC projects, they have metric component already built in. But these are not very large. So there will not be a significant shift in cost.

Next follow-up question is from the line of Mohit Kumar from ICICI Securities.

Sir, few clarification. One is did you use to book generation-based incentive for the RE, mainly in the fourth quarter? Is that understanding right?

No, it was across...

For the year.

For the year, every quarter.

Understood. Second question was...

One of the projects, the time of the year and the amount was used basically. So that is what's discontinued from the last quarter onwards, last quarter last year.

Understood. Sir. given the [ VA ] portfolio, how do see the impact of DSM, the new regulation? And can you please help us with the current settle of the new regulation?

It's not -- our portfolio has not been heavy. I would say it's a balanced portfolio. If you look at the 4 gigawatt capacity we are commissioning, almost 50% is coming from the green, 50% is coming from the solar. It's not a [ green ] portfolio, I would say.

What's the existing portfolio?

Sorry?

The existing portfolio, how do you see the impact of this? Do you see the...

60% -- I mean 40% solar here. Yes, some entities there in terms of PLF, I would say.

Understood. I'll take it off-line. My third question, sir, are you seeing the incremental thermal bidding opportunity for the states? And are we looking to bid for it?

Yes. There are a couple of states contemplating of announcing the thermal capacity. So we are actively looking at it.

Understood. My last question on the merchant capacity, which is put out on the RE side. Is there any configuration between the solar and wind you're looking at? And are you still looking to add battery to that to ensure that you get a higher tariff?

So if you look at our profile, our bidding pattern for the last 2 years, I would say we are more inclined towards a complex project like hydro project or [indiscernible] kind of project. That is what we are focusing more on those kinds of projects so that we can get better or equal or better to the year or higher.

Sir, my question was the main capacity to your 3-megawatt peak, which you have mentioned in the PPT. Are you making this [indiscernible] wind and solar? And are you looking to add also battery in this?

So Mohit, if you look at our 63 megawatts, it will be slightly higher on the wind side. out of which -- and there is some solar. Right now, we are not contemplating any battery usage there. So going forward, if that is required, we may add on. But as of now, we are not adding any battery because it is more of wind, which is typically nonsolar hours and where you can get better returns.

Next question is from line of [ Nhil Oswal ] from PGM India.

Sir, do you have any current capacities tied up on the C&I side? Do you plan to tie up significant future capacity on the C&I side? And what is your view on the C&I segment?

No. So I think we currently have around 860 megawatts of E&I projects under construction. We keep on looking at tying up C&I with C&I consumers as and when they are available. So we are open of tying up additional capacities. But as of now, we have 860 megawatts of C&I projects under construction.

Next follow-up question is from the line of Aditya Birla.

Am I audible?

Yes, yes.

Sir, I just wanted to understand how you're thinking about your gas-fired plant business in the long term. Given that LNG as a fuel has proven expensive for India and that's one of the reasons why we have seen Indian plants running at 15%, 20% PLF. And also their own impending global gas that was expected to come in 2027 due to increase liquidation capacity and you do run where that has also been good forward. So I just wanted to understand what kind of PLF are you expecting over long run?

So basically, you are right, there's a gas that is coming in basically, lots of gear is going to flow in. Maybe because of the Iran war, some pushback will be there in terms of timing, I would say, not in terms of availability going forward. Otherwise, we don't see any change in the situation expect some timing will be delayed, I would say, and more gas will be flown, I would say. So in terms of PLF, it would be difficult to predict the PLF. But gas availability may not be the issue going forward. Price -- we have to monitor the price and then take our call.

And the other thing is if you look at our portfolio, around 50% of our portfolio of gas, we have tied up long-term PPAs with our own DISCOMs. So there, we are getting fixed cost on the availability business. So that should not be an issue. As far as merchant capacities are concerned, we take the benefit of short-term pricing mismatches. This year, it is slightly constant because of very high cost of LNG. But if you look at last 4 to 5 years, we have been able to make decent profits out of this merchant capacity which we have. So our expectation going forward is once all this subsides, India as a market, demand should improve. And there will always be a deficit of power going forward. which will allow us to take benefit from our merchant capacities. That is the expectation right now. .

Next question is from the line of [ Savi ] from Avendus Spark.

Yes. I just forgot to ask one question. After June of this year, what is the source of cash we will have to show availability at [indiscernible]? .

It's basically short term. We have to buy from the short-term market basically, do the short-term contracts. So gas is available. Gas is not issue. Basically, at what size we are getting gas..

I think the question is the price, not our availability of gas. So for demonstrating our availability, we can -- gas is amply available. Now whether DISCOM is willing to take that gas and use that electricity at a high rate, or they can be able to manage it buying it from the merchant market, that balancing will have to be done. So as far as our availability of plant is concerned, there is no shortage of gas. It is only the price which we hire.

Sure. When you say spot, it would be gas from IDFC, something like that? Or...

No, spot cargoes. What he's trying to say is spot cargoes. Right now domestic gas is not available as government has pulled everything. So we have to import the gas.

Understood. So when the tenders are invited, you would be able to get it in a short notice?

Which sort of tenders?

The spot cargo. .

Yes, yes. So we keep on doing -- if you are procuring cargoes, we generally float a tender in the international market, and then we bid it out. .

As there are no further questions, I'll now hand the conference over to Mr. Saurabh Mashruwala for closing comments.

Thank you, everybody for joining Torrent Power earnings call. We wish everybody to stay safe and healthy thank so much. .

Thank you very much. On behalf of Torrent Power Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. .

Thank you.

Thank you, sir.