Release Date: July 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JSW Energy Ltd (BOM:533148, Financial) reported an 80% year-on-year increase in profit after tax, reaching INR522 crores.
- The company achieved a strong EBITDA growth of 21% year-on-year, amounting to INR1,580 crores.
- JSW Energy Ltd added 291 megawatts of capacity in the quarter, primarily from wind energy.
- The company's hydro generation increased by 61% year-on-year, marking the highest generation for Q1 in the last five years.
- JSW Energy Ltd maintains a healthy balance sheet with a net debt to EBITDA ratio of 2.2, excluding CWIP debt.
Negative Points
- The company faced some teething issues during the initial commissioning of the Utkal unit one, impacting performance.
- There was a severe landslide at the Kutehr project site, affecting project activities and causing delays.
- The weighted average cost of debt increased marginally to 8.75% at the end of June.
- The Vijayanagar station showed variability in PLF due to its dependence on opportunistic trading in the merchant markets.
- The Barmer plant experienced lower PLF in Q1 due to planned outages, leading to under-recovery for the quarter.
Q & A Highlights
Q: For the pipeline project of 5.65 gigawatt, what is the general expectation for PPA signing and realistic commissioning in FY27?
A: We have signed PPAs for 2 gigawatt, and the rest are in the process of being finalized. Typically, it takes 30 to 70 days for PPA signing. Projects with signed PPAs are expected to be commissioned within 18 to 24 months.
Q: How do you foresee the load following FDRE rates settling down in the coming quarters with evolving battery prices?
A: The exact tariff depends on the project design and requirements. Recent bids have shown tariffs around INR3.42 for single discharge solar plus storage. With moderation in battery prices, we expect tariffs to range between INR4.6 to INR4.8.
Q: Are you running the Ratnagiri unit one on a case basis?
A: Yes, the Ratnagiri unit one is being operated on a case basis.
Q: Do you expect to commence work on new power plants or tie up PPAs for Ind-Barath in the near term?
A: Currently, we see significant opportunities in the merchant market for the next one to two years. We will consider new thermal capacity additions based on PPA opportunities and government announcements.
Q: Can you explain the underperformance at the Vijayanagar station and low PLF at Barmer?
A: Vijayanagar has only 310 MW tied under PPAs, with the rest sold in the merchant market based on unit economics. Barmer had planned outages in Q1, but is running at high PLF currently.
Q: Are there any transmission evacuation capacity problems for under-construction wind projects?
A: No, all under-construction wind projects have their transmission capacities tied up.
Q: What type of realizations and input costs are you seeing in Ind-Barath and Vijayanagar plants?
A: Ind-Barath sources coal through auctions with an average cost of INR2.75 to INR3. Imported coal-based stations like Ratnagiri and Vijayanagar have costs influenced by API 4 indices, with Vijayanagar having higher costs due to inland transportation.
Q: What is the expected capacity addition from FY25 to FY30?
A: We are confident of achieving 20 gigawatts significantly earlier than FY30, given the current pipeline and opportunities.
Q: Are there any supply chain tightness issues in substations or transformers?
A: We have already lined up our supply chain requirements, including transformers, to ensure timely project completion.
Q: What is the status of the green hydrogen project and BESS project?
A: The green hydrogen project is under construction with a capacity of 3,800 tonnes per annum of green hydrogen and 30,000 tonnes per annum of green oxygen, expected to be commissioned before March '25. The BESS project with 1 gigawatt hour capacity is scheduled for commissioning before June '25.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
