Adani Power Limited analyst Q&A

Thank you very much. The first question is from the line of Nirav Shah from GeeCee Holdings. Please go ahead.

Yes, good evening. Many congratulations for a fabulous set of numbers. Sir, a few questions. Firstly, has there been any repayment of unsecured perpetual securities during Q3? I mean, Q2, the balance was INR9,180 crores, and we are seeing INR1,000 crores deleveraging approximately on a sequential basis against our EBITDA of roughly INR5,000 crores. So I just want to understand any repayment of perpetual securities that has happened during the quarter?

Yes. You will ask the second question or I should respond now?

I think we can take it, yes.

Thank you for your compliments. Yes, perpetual outstanding now today is INR7,435 crores.

INR7,435 crores?

Yes, INR7,435 crores. The difference is what has been paid out of the surplus cash flows. I must also clarify that, we have perpetual securities, we have unsecured support received from the Group, and long-term debt. We have three baskets of the debt. We have used cash flow s judiciously to keep it balanced. We have retired and prepaid secured debt as well, unsecured debt and part of the perpetual security also.

This includes the principal and approximately INR2,000 crores that has been paid and includes the yield on that.

Okay. So total is INR2,000 plus the INR1,700-odd crores?

Total both together is INR2,000 crores plus, little above INR2,000 crores, all inclusive.

All inclusive. Makes sense. And sir, what's the EBITDA for the first nine months for Godda and Mahan? Revenue EBITDA and PAT, if you can just disclose it separately?

Actually, we don't give these numbers separately. We have given the consolidated numbers. So that number I've just read out to you for your information.

Got it. And sir, I mean, any update on Amarkantak? I mean, where is the process right now?

Nothing right now. The COC has not taken any view on this as of now. So the process is currently on, and we cannot comment on the outcome and the timelines.

The next question is from the line of Nikhil Abhyankar from ICICI Securities.

India is going through kind of a thermal capacity addition, even the government is asking everyone to add thermal capacity. Sir, basically, are we rejigging our plans to add thermal capacity in the long run?

Actually, last time, we already gave a target that currently we have a capacity of 15,250 megawatt and we have the plan to take it to 21,150 megawatts or so. So as of now, we have approximately 6,000-megawatt capacity addition plan that we have already shared.

Sir, this is purely greenfield or does it also include acquisitions?

This includes 1.1 gigawatt of acquisitions also which we thought probably could be in the offing.

It is both. Actually greenfield or brownfield as well as it may interchange also if one is not materializing, it may include the acquisition or some acquisition is not getting materialized, so we may add new capacity also.

Understood. And sir, regarding Mahan II, so what is the status of the project as in, has the EPC tender been finalized? And can you just share an update on that as well?

Yes. This is being implemented and the pro ject implementation is in full swing. Some packages have been ordered and some more are in the process of being ordered. It is not on EPC philosophy, they're on split package concept basis. BTG has been already ordered with BHEL and the rest is on the way of being placed.

Understood. And sir, does this quarter's income include any past period adjustments?

Insignificant. Not much.

Okay. Sure, sir. I've got further more questions but I'll get back in the queue.

Thank you.

The next question is from the line of Koundinya from Jefferies India. Please go ahead.

Hi, sir. Thanks for the opportunity. Sir, just a couple of questions. So firstly, on the capacity expansion plans. Outside Mahan II, can you help us understand what are the projects where you're looking at greenfield expansions? I'm not speaking about the acquisition part, but the greenfield or brownfield expansions which you may want to look at?

Our existing facilities have a potential to expand. So other than Godda, we have other plants where we can think of expanding. While Mahan's Phase II expansion is taking place, maybe at Mahan or Raigarh, we can add another 3.2 gigawatt of capacity. So if you look at what has been disclosed by us is about of 4.8 gigawatt of brownfield expansions. This could be at any of our locations. Mahan II is already underway and maybe at Raigarh, maybe at Mahan, again, we can have a Phase III as well there.

Understood, sir.

Brownfield what we are targeting is 4.8 gigawatts.

Understood, sir. And sir, on the acquisition side, you said Amarkantak which discussions are underway. But other than that, do you see any projects which are worth looking at or which -- I mean, where we will have certainty of PPA or FSA being tied up or any other assets In the pipeline which you think or what you need or even if you count or if you don't want to name the assets, what is the kind of pipeline at an aggregate level that is existing already, if you can help us understand that, please?

You would have read our announcement about Coastal Energen Pvt. Ltd. The COC has given us the LoI and now it has to go through the NCLT process. So that is something which is definitely in the sights.

Understood, sir. Thank you very much and all the best.

Thank you.

Thank you. Next question is from the line of Nirav Shah from GeeCee Holdings. Please go ahead.

Yes, sir. Thanks for the follow up. So just one question. On our rating upgrade efforts, any update on that, when can we expect or any update on our efforts on the rating update?

You will have to wait for some time for that.

Okay, sir. Thank you.

Thank you. Next question is from the line of Haresh from SVS Securities. Please go ahead.

Hello. Good evening. Congratulations on a great set of numbers. Sir, can you just give a highlight -- I mean, just for the coming quarter, how much interest expense we are expecting to reduce? And can you just throw a light on the fuel cost for the coming quarters, please? Thank you.

As far as interest is concerned, now we are having a senior debt of about INR25,000 crores, which also takes into account the debt from Godda project, the interest on which was getting capitalized till the commissioning time. Now post the commissioning, that interest is getting added. So on the INR25,000 crores, we will have to incur the interest on that. There is no significant unsecured debt that is outstanding. Plus you can add about INR5,000 crores of working capital. So on INR30,000 crores, 9% give or take.

Okay. Can you throw light on fuel cost for the coming quarters?

It will depend on how index moves. All the imported coal indices have settled now. They have come down significantly from last year's level. We'll not be able to comment on that. But in our view, prices have stabilized now. I think they will remain at steady levels. We don't see any further increase in the fuel cost.

Next question is from the line of Aryan from Mehta Equities.

Yes. First of all, congrats on a good set of numbers. I wanted to ask that as the things is being asked already, are there going forward, any debt reduction plans as of now, could you throw some light on it, please?

Thank you. See, in last 12 months or so, we have demonstrated as to how the surplus cash flow has been judiciously used by us in terms of reducing debt on our balance sheet. We have prepaid in Mahan Energen the entire debt for the Phase 1 project, which was acquired by us through the NCLT process, it is debt- free now. Although there's no written policy, but as and when surplus cash flow is there, we'll definitely look to reduce the high-cost borrowing. That is something we keep monitoring and take a decision as the need arises.

In terms of per megawatt debt, it is less than INR2 crores per megawatt, which is the best in the industry.

If I can be very precise, INR1.65 crores per megawatt is our senior debt now.

Right. And I meant to ask that going forward, like our margins are improving subsequently. So moving forward, what can be seen towards the margins, PAT margins like to what extent can we see the rise in it?

I don't think we'll be able to give you any forward-looking guidance on this.

Okay. Right. And this is sustainable as of now, what we have achieved?

Right.

The next follow -up question is from the line of Nikhil Abhyankar from ICICI Securities.

Just a couple of questions. Sir, how are we meeting our coal requirement for Godda? Are we importing it or is it through e-auctions?

It is a mix of both. We are importing as well as using e-auctions.

And sir, what are the prices in e-auctions right now?

Something around INR3.5 per unit.

Yes. We have paid INR809 crores in Q3 FY ’24 of the senior debt and INR2,000 crores of perpetual including yield on that. In January ‘24 also we have prepaid INR250 crores.

Understood. Okay. And sir, can you give us the quantum of merchant sales plant- wise?

No, that will not be possible.

Okay. And sir, just a final one. What will be the capex requirement for FY '24-25? And we are also in talks to acquire Coastal Energen. So what will be the total consideration for it and will it require any more capex?

Yes, consideration for Coastal Energen is around INR3,450 crores. That is our bid to COC, which has been accepted.

Okay. And will it require additional capex?

Maybe very small amount, not really a big amount because the plant is well maintained and in operational condition.

Okay. So should we -- after acquisition, will it be up and running from day 1 as...

It is already running. You must be seeing, both units are generating power and supplying it.

As there are no further questions, I will now hand the conference over to the management for closing comments.

Thank you, friends. Appreciate your interest in Adani Power Limited. And in case you have any follow -up questions, Nishit and team, and myself will be happy to respond to your queries. Thank you so very much. Thank you.

Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

Thank you.