NTPC Limited analyst Q&A

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

My first question is, could you speak about your revised targets for capacity addition in NTPC Green, both at the JV level as well as at the consolidated level? And what has been -- and why are the challenges seemingly delaying your original plans? Management Yes. Mr. Sarit Maheshwari, the CEO of NGEL will take your question. CEO NGEL See, as far as our capacity addition plan for this year was concerned, we had promised that we would be doing around 5,200 MW on a year-on-year basis. That is this year, we had to add 5 GW of power. We are well on track for it. We have already added 2,000-odd MW. And in the balance 2 months, our capacity additions are well on track. We are going to add around 1,000 MW more at Khavda, 200 MW more at Bhadla and 250 MW at Kalasar, together around 300 MW of wind will come from our Gujarat plants and also around 500 to 550 MW will be coming from our Ayana portfolio. This would take us to another 2,300 to 2,400 of structured capacity addition planned in the next 2 months. So the capacity addition plan is very much on track, and we would be touching our 5 GW target.

So 2,000 MW is done. 2,300 to 2,400 can be done in next 2 months that will be 4,400 MW? CEO NGEL No. So far, we have done -- we have already done as on date -- as on -- till the last quarter, around 2,100 and around 500 so 2,600-odd MW we have already done. So as I told you, for the balance one also around 2,500 MW is on target. So that will take us to 5 gigawatts. That is what we have planned.

Okay. And for the next financial year, what's the NTPC Green target at the consolidated level? CEO NGEL Our plan as of now for FY '27 is 8 GW. And we have already commenced work on the various plants which have to give the capacities next year. And likewise, for FY '28 also, we are targeting 8 GW of capacity addition.

So sir, NTPC Green again, the next question is, what is your solar and wind generation, which has happened in 9 month FY '26 at the consolidated level and the JV level? And also please share your calculated PLF. My humble request is that the key performance like for NTPC Green should be uploaded along with the results because it is very difficult to interpret performance in the absence of these basic numbers. Management Key financial numbers, operational and financial numbers of the NGEL have already been uploaded, you may please verify or you can get it directly from the company also.

Okay. It was not in not on BSE as of now. Management It is in the NGEL website, you can just check. Okay?

Okay. Okay. I was checking on BSE. So, the last question is what explains loss contribution for JVs in NTPC Green in Q3? CEO NGEL The work in all the NGEL JVs are still in progress, except for Ayana contribution, which has also been explicitly mentioned there.

Okay. So the loss is attributable to Ayana? CEO NGEL No, if you see on a quarter-on-quarter basis, definitely, there is -- in Q2 to Q3, there is a dip in the profit but on the 9-month consolidation basis, you can see that our -- both PBT has grown by 26% on a consolidated basis. And so is the PAT, which has grown by 35%. But if you just tend to analyze Q2 to Q3, there are various reasons because of which the profitability has gone down. that primarily involves some loss of generation at Khavda wherein we had brought in the largest capacity, and this is the initial stabilization period because of which the generation is not to the tune what has been -- what should have come from there. But that is very normal in any renewable companies. And I can tell you that as on date, whatever capacity we have brought it at Khavda, which is around 1,500 MW. All the capacities are running at full load. So there is absolutely no loss of capacity because of performance because the stabilization period is now over for the capacities that we added there. Management Just to explain the stabilization here, the peculiar thing here is when the capacity addition happened on an odd date, the benefit of the revenue is accrued from the odd date, whereas the depreciation for the capacity cost is booked for the entire month, depreciation particularly. So in the next quarter, it gets normalized.

The next question is from the line of Nidhi Shah from ICICI Securities.

So my first question is that we recently got the 400 MW of the 1 GW bid of UPPCL, the PPA has been given out. So what is the status of the remaining 600 MW as well as there was another bid that NTPC won in March from UPPCL. So again, what is the progress on the PPA for that bid? CEO NGEL No, we have already 1,400 MW of UPPCL power that we had. Out of that, 1 gigawatt is already PPA tied at -- the work is going on at Chitrakoot and Lalitpur on that. The balance 400 MW, we do not have the PPA, and we haven't started the work on that as of -- till now.

All right. And what -- but isn't the total 2 gigawatt, 1 gigawatt in Jan and 1 gigawatt in March? So Chitrakoot and the other one that you mentioned, that is from the first tranche in Jan. The second one, 1 gigawatt in March, what is the status of that? CEO NGEL Ma'am, as regards NGEL, we have only with UP 1,400 MW. We can get offline to understand this, which capacities you are talking.

All right. Lastly, what percentage of the 23.5 GW that is in our contracted and awarded total, is PPA tied and what percentage is not PPA tied? CEO NGEL I can give you the figures on a year-on-year basis, what is the PPA tied capacities. In FY '26, the capacities that we will now be adding will be -- is almost 82% PPA tied. FY '27, it moves to 83% FY '28 capacity as on date is 60% is tied up. And if you pick up total of all on a consolidated basis, we are 74% PPA tied. And I would also like to add here this we have not included some of the plants where the PPA dialogue is going up with government, like 600-MW odd we are in advanced stages of tie-up at Barethi from MP government. So that also we haven't considered. So if you consider that as the PPA, which will definitely happen, this percentage would further go up. Likewise, we have also some comfort letters with our group company, NVVN. That is also because there is no firm PPA over there, we haven't included that.

The next question is from the line of Satyadeep Jain from AMBIT Capital.

Just first on NTPC. Just wanted to check on the decision to participate in Section 63 tenders, there have been about 11, 12 gigawatt of awards. Is this a conscious decision for NTPC not to participate in Section 63, just trying to understand? Management Yes, NTPC has always hitherto maintained the position that it will, first of all, channelize all its resources and equity as far as the Section 62 is concerned. So we are -- by merit order, we are all going through brownfield projects only. And so after exhausting this, the next level of strategy would be thought of. But right at this moment, you are correct that we are restricting ourselves for Section 62 as far as thermal plants are concerned, but that doesn't limit us from going in for acquisition of pre- existing assets. As you know, we have recently acquired Sinnar Thermal Power Plant. So that that would be a case-to-case decision. But definitely, at this moment, we are not bidding for any greenfield projects, which are coming under Section 63..

Just wanted to touch on this further. So a lot of these tenders -- and maybe you can share a thought why are we seeing a lot of flurry of tenders to 63. And you have pipeline -- we're waiting for more visibility for pipeline beyond '28, '29, commissioning some tenders which are still not awarded, which we are waiting in '27. So why not build this pipeline beyond the brownfield that you already have? Maybe -- so till you tender out and look at the remaining capacity that you have, you will not participate in 63 at all? And does it limit your optionality because all these states are tendering 63 basis. Would that limit option once you exhaust brownfield? Just trying to understand the thought process of this. Management No, no, we are not ruling anything out forever. But right at this moment, as I said that on a purely merit order, we are right now restricting ourselves to Section 62. We'll evaluate the proposition as we go ahead. But at the same time, my allocation of resources from the NTPC holding company would be towards all the committed projects, which includes hydro projects of its subsidiaries. We have commitments -- increasing commitments to nuclear. So keeping all this to balance everything, right now, the strategy is to participate in going for Section 62. But as we go ahead, we'll evaluate our strategy afresh.

And maybe, sir, any thoughts maybe from your front why push towards 63 from states? Anything you can add or maybe -- if not, I can move to the next question. Management No, I'm not clear about your question.

Why is there a flurry of tenders through 63 and why are states not looking at 62? Just trying to understand what is driving this activity on 63 front? Management I mean, as far as our capacity addition is concerned under 62, we have a sufficient response and we have taken from the state. We have been successfully able to tie up our projects. So beyond this, if there are certain considerations at the state level -- individual state level, I won't be able to explain to you.

Okay. And sir, secondly, on NGEL, I just wanted to understand, so you're looking at 2.5 GW in the next 2 months and 8 GW, just next year, just how -- are you looking at right of way connectivity? So these are -- you have a very high reasonable surety that these plants have connectivity commissioned and that we will be able to commission 2.5 GW in the next 2 months, just the level of confidence you have for these 2.5 GW in the next 2 months? Management See, as Mr. Sarit was explaining around 20 GW that we are targeting over the next 3 years, the entire PPA -- the PPA up to 75% is in place. But on a more immediate basis, the land connectivity is in place. So I think we are pretty sure that whatever is in the hand, we'll be able to finish it, we are fully geared up for that.

No, sir. Just specifically the 2.5 for the next 2 months, you're talking about. I know land connectivity, everything is secured. But in terms of connectivity, the energizing of the plant and the connectivity being available, this would be contingent on connectivity being there, right, the 2.5 GW. Just trying to understand the level of confidence you have that the connectivity will be ready and we will be able to energize these assets by the end of March, obviously. Management Yes, Mr. Sarit. CEO NGEL See, I'll answer this in 2 parts. One is the physical progress on the ground to give you some idea how we are going to add 2.5 GW in the coming 2 months. Our bulk of the capacity in this - around 1,000-odd MW - is coming from Khavda alone. So this Khavda already 700 to 800 MW of module capacities have already been erected. So now when we will be adding the further capacity over there, all the connectivity related challenges in terms of transformers and all are already back charged. So these capacities are going to come in the coming 2 months step by step. we have already commissioned at Bhadla 300 MW, so every system over there is also charged and the balance 200 MW, we will bring there also. So this gives a very clear 1,200 MW, which is very much ready and can be commissioned within the next 1 to 1.5 months only. In addition to that, we have from our Ayana platform also 500 to 550 MW, which is in advanced stage of commissioning. We also have our wind projects at 3 locations, which is Vanki, Jamjodhpur and Dwarka. At Vanki and Jamjodhpur, we will be bringing in another 200-odd MW from these 2 locations. And from Dayapar, we are also targeting around 150 MW. In addition, there is one more plant, as I explained before, also, Kalasar, which is 250 MW. So if you sum up all these, we are on track for the -- our capacity addition as we had promised. On the connectivity front, as you can say that our firm capacities currently are at the Khavda region is 865MW. From February onwards, we will get further connectivities over there. And the balance, any additional generation from there as now is going on TGNA. It will go on TGNA from there.

Okay. Sir, just a clarification on Ayana 500 MW. This is the Hindalco RE-RTC that you expect to commission by March 2026. Is that right? CEO NGEL That includes a part of that also, but there are other projects also. One is in Rajasthan. We can give you the breakup offline, especially of the 500 MW of Ayana platform also.

The next question is from the line of Khushwant Pahwa from KPAC.

Congratulations on a good set of numbers. First is, I understood the capacity that come online on the NGEL group side. Can you please give some color on what capacity will come online on the thermal side, the time lines, basically? This year, remaining 3 months and next year and the year thereafter? Management Yes. As far as thermal for the current year is concerned, see, as you know that we already -- in my opening statement, we have said that how much is the actual that has been commissioned till 31st Dec 2025, 2,780 MW is already commissioned. So I think thermal, we will end up at this. No further thermal capacity is expected during the current year. But however, the next year, we are expecting Patratu Unit 2 and 3 to be commissioned in Q1 and Q3, respectively. So that would add around 1,600 MW, 2 units of 800.

So I mean, I see the capacity coming online is 16,520 MW. So do you have any broad time lines for that or difficult at this stage? Management Over the next 3-year period, 6,500 MW would be added, 2,780 during the current year; next year, it is 2 units of 800, 1,600; and the year next, it would be 2,120 MW, this is coming from TTPS Stage 3 1320 MW and Lara -Stage 2, this is 800 MW. So that adds to 2,120 MW. So all this put together 6.5 GW over the next 3 years, including the current year.

The next question is from the line of Ketan Jain from Avendus Spark.

Thank you. My question got answered earlier.

The next question is from the line of Mahesh Patil from ICICI Securities. .

Yes. Sir, my first question is what is the impact of curtailment on our generation? Is it possible to quantify it in any way? Management You're talking about thermal or...

Yes, yes, the renewables for Rajasthan, Gujarat. Management On the renewable, okay. CEO NGEL Yes, we had -- you're right, we had significant curtailments. Yes, I can give you the figures. We had a total in this -- for the 9 months that have gone by, we lost around 420 million units on account of curtailment in NGEL alone. And in NREL also, we had lost around 212 million units of generation. So I think this answers you that curtailment has been a significant issue in the past that we had faced. But I'm happy to inform you that as regards NGEL, now the curtailment will be zero because the line through which the curtailment was happening was Narela K3 line that is commissioned. And hence forth, there will be no curtailment loss on to NGEL on account of this. There will be minor curtailment losses in NREL from Khavda because our complete GNA is 865, which is going to be firmed up in sequence next year onwards. And by October, we will be having the complete capacities over there also. So with respect to NGEL growth, the curtailment will not have that kind of an effect that is happening elsewhere in Gujarat and Rajasthan.

Okay. And sir, my second question is on the thermal award that we are looking at for next year, FY '27?

Next year, we are looking at an award of 4 gigawatt that will be Lara-2 1,600 MW. Jhabua, BRBCL, Bhilai 800 MW each. The next financial year, we are planning Talcher thermal-based extension of another 800 MW at this instance. And we have various other options also. Depending on the conditions we may add further.

The next question is from the line of Nikhil from Bernstein.

My first question is on the green ammonia project that we won. I mean, outside in the bids look aggressive. So I wanted to check, do they fall within our return thresholds? Or are there any plans to reconsider that project. Management Will you please repeat the question?

So the question is on the green ammonia project. I'm saying the green ammonia project that we won, could you please clarify outside in the bids look aggressive to us, so I wanted to check, does the project meet our return threshold of 11%, 12% for higher equity IRR or are there any plans to reconsider that green ammonia project? CEO NGEL I'll take this query. In fact, if you see the IRR calculations for this, this would primary number that has to come is from RE-RTC on that. And the RE-RTC prices are quite competitive these days, and we would be maintaining the healthy IRR as we do for other projects in this project also.

Okay. Got it. My second and last question is on the nuclear side. So the future projects planned on nuclear, the technology partnerships you're looking for are abroad, no plans to do it on domestic tie-ups?

As you know, currently, we are working along with NPCIL in our Mahi Banswara project. That is predominantly on PSWR technology. As far as the balance technologies are concerned, we already come out with an MOU, and we have shortlisted EDF France for India and as far as Rosatom part -- this PWR. So with these 2, we are planning to have MOU, then we will take it forward in working in this technology, PWR technology predominantly. So in the meantime, we have started studies in various stages. One of the site in Andhra Pradesh is in advanced condition. Another one MP is in progress. Once you select a site, then we will go and try to award these by tenderingfor this PWR technology.

The next question is from the line of Aniket Mittal from SBI Mutual Fund.

Sir, just a clarification on thermal awarding. When do we expect Meja to get awarded, and it seems you pushed out Lara also to FY '27 now. So just to understand what's leading to these delays in incremental coal awarding? Management See, in case of this Meja -- basically, it's the equity is crossing the threshold limit, both government of UP and NTPC has to get the necessary approvals. So the approval process is pending otherwise, everything is tied up. It's a matter of time. We are expected to finish this in this quarter. As regards Lara, we are postponing because the parties which are supposed to quote they are asking for an extension. We are trying to consider them. Though we have put as a first quarter next financial year, it may be quite possible to have it in this quarter itself.

Okay. And what about Patratu, sir? When do you expect to award Phase 2 of Patratu?

Phase II of Patratu right now it all depends on concerned the state government. Right now, it is not on the table. It may be -- after the 4.8 gigawatt which I was telling earlier, that we are having a lot of options with us. Under those options, Patratu and other will be seen

Okay. Just one question on the financials. I think this quarter, when I look at the profitability there seems to be a very big rise on a Y-o-Y basis on the fertilizer JV that we have, could you quantify that number for this quarter? And then what's driving this increase in profitability over there? Management Just give me a moment. See, sales volume growth has been 22%. So that has increased the fixed cost recovery by INR 992 crores and there is a reduction in gas under recovery by INR 224 crores on account of improved efficiency. This is 5.04 gigacal/MT from 5.207 gigacal/MT. So both this has been a contributing factor. And there is an increase in the trading margin by INR159 crores. So all these 3 things accounts for increase by around INR357 crores of profit.

Got that. And just lastly, there's obviously been news about us and NIIF trying to sell IntelliSmart. What's the way out over there? Management IntelliSmart -- still under process. So we will be able to tell you definitively later on, not at this moment.

Ladies and gentlemen, we will take that as a last question for today. I now hand the conference over to the management for closing comments. Over to you, sir. Management I thank you all of you for your active participation in this earnings call for the Q3 FY '26. And for your pertinent queries on the operational and financial aspects of NTPC, NGEL way ahead. Wherever we could not give you the precise number can raise a separate query, and we'll be glad to clarify that, and we'll have it provided through our Investor Relations cell. Thanks once again to all of you for the active participation. Thank you so much.

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

This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings.