Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nava Ltd (BOM:513023, Financial) achieved its highest ever quarterly income of INR1,258.4 crores, marking a 16.7% increase year on year.
- Profit before tax reached a record INR530.8 crores, reflecting a 27.6% growth compared to the same period last year.
- The Maamba Energy Limited power plant operated at near perfect 100% plant availability, significantly contributing to consolidated revenue and profitability.
- The metals division reported a profit before tax of INR23.2 crores compared to a loss of INR1.6 crores last year, driven by higher realization and successful product diversification to Ferro Silicon.
- Nava Bharat Singapore Private Limited has started paying dividends to Nava Ltd (BOM:513023), and Maamba Energy Limited has commenced discharging accumulative interest to the sponsors with USD19.5 million received since April 2024.
Negative Points
- Interest costs have come down significantly due to debt repayment, but there are no immediate plans to bring back debt, which could limit future leverage opportunities.
- The gross margins increase from 65% to 70% year over year is partly due to a decrease in coal prices, which may not be sustainable.
- The tariff for the new 300-megawatt plant in Zambia is lower at $0.095 compared to $0.103 for the existing plant, potentially impacting future revenue.
- The expected revenue from the Avocado project in the next financial year is relatively small at $3 million to $4 million, with peak revenue not expected until 2027-2028.
- The company is not yet debt-free on a consolidated level, with plans to take on debt for the Phase 2 expansion of the Maamba Energy Limited plant.
Q & A Highlights
Highlights from Nava Ltd (BOM:513023) Q1 FY '25 Earnings Call
Q: Do we have a PPA in place for the 300-megawatt Maamba Energy Limited plant? What are the terms?
A: Yes, a 20-year PPA has been signed and approved by the Energy Regulation Board. The offtake starts two years from now. - D. Ashwin, CEO
Q: Could we have the revenue, EBITDA, and PAT numbers for Nava Bharat Energy?
A: Total revenue for the first quarter was INR201 crores, profit before tax was INR68.2 crores, and profit after tax was INR44.4 crores. The plant operated at 91%-plus PLF. - Unidentified Corporate Representative
Q: The interest cost has come down significantly this quarter. Is this a one-off?
A: The debt has been completely repaid at Nava, Maamba Collieries, Maamba Energy, and Nava Bharat Energy, resulting in no interest cost. - Unidentified Corporate Representative
Q: What is the expected revenue from Avocado products in the next financial year?
A: Next financial year revenue will be small, about $3 million to $4 million, with peak revenue expected from '27, '28 onwards. - D. Ashwin, CEO
Q: What was the free cash flow in Q1 and are there any non-core asset sales planned?
A: Free cash flow at the group level was about INR500 crores. We are evaluating opportunities for land parcels but there is no urgency to sell. - D. Ashwin, CEO
Q: What are the planned uses of the cash pile given the net cash position?
A: We are focusing on growth capital for projects like Maamba expansion, Avocado project, and Ivory Coast project. We will also consider corporate actions to benefit shareholders as more funds become available. - D. Ashwin, CEO
Q: What is the CapEx expenditure for the full year and how is it planned across quarters?
A: No large CapEx plans for Indian operations. Most planned M&As are from overseas operations, including Maamba Energy expansion, Avocado project, and exploration activities in Ivory Coast and lithium assets. - D. Ashwin, CEO
Q: What is the status on the magnetite exploration?
A: Exploration activities are ongoing, and we believe there is high-grade magnetite. Results will be available later. - D. Ashwin, CEO
Q: What is the current tariff applicable in the present PPA for Maamba Energy?
A: The Phase 1 tariff is $0.103. The new PPA tariff is $0.095, indexed to US PPA inflation annually. - D. Ashwin, CEO
Q: What is the tax rate for Zambia Phase 1 after the current financial year?
A: After the current financial year, the tax rate will be 30%. - Unidentified Corporate Representative
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
