Release Date: May 07, 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 the highest ever adjusted EBITDA and PAT, driven by renewable energy (RE) capacity additions and strong thermal performance.
- The company saw a significant increase in overall net generation, which rose by 27% year-on-year.
- JSW Energy Ltd (BOM:533148) successfully completed a QIP, raising substantial funds to support future growth.
- The company has a robust pipeline with a total capacity of 13.2 gigawatts, including work in progress, commissioned capacity, and order book.
- JSW Energy Ltd (BOM:533148) has been successful in turning around the performance of acquired assets, such as the Mytrah asset, which saw a 12% increase in generation within one year of acquisition.
Negative Points
- Hydrology has not been favorable, leading to a 17% decline in large hydro generation in FY24.
- The average tariff in the merchant market was lower at INR5.24 compared to INR5.94 in the previous year.
- The company's net debt-to-EBITDA ratio, excluding CWIP, stands at 2.9x, indicating a significant level of debt.
- There are challenges related to the stabilization of new units, such as the Ind-Barath project, which initially faced higher O&M costs.
- The company faces potential risks from regulatory changes, such as the recent CERC paper that proposes capping tariffs for merchant power.
Q & A Highlights
Q: Congratulations on the successful fund raise. What is the reason for the Board approving the raising of funds worth [100 billion]? Are you looking to raise the fund in FY25?
A: (Sharad Mahendra, CEO) The fund raise is to support our growth plans, including reaching 20 gigawatts by 2030. We are confident of accelerating this growth, possibly achieving it earlier than planned. The Board approval is an enabling resolution to take advantage of opportunities as they arise. (Pritesh Vinay, CFO) This is an enabling resolution, similar to what we've had since 2016. It allows us to be ready for any opportunities, including inorganic growth.
Q: Given the pipeline, what would be the CapEx in FY25 and FY26?
A: (Sharad Mahendra, CEO) We are on track to reach 10 gigawatts by FY25. (Pritesh Vinay, CFO) For the 2.7 gigawatts needed to hit the 10 gigawatt mark and the battery storage project, we are looking at a total CapEx of about INR15,000 crore in FY25. For FY26, we will provide guidance at the end of the current fiscal year.
Q: What is the reason for setting up a wind manufacturing capacity?
A: (Pritesh Vinay, CFO) We are evaluating battery cell manufacturing to address grid stability and intermittency issues. This is crucial for complex bids that require battery storage solutions. (Sharad Mahendra, CEO) The storage capacity in India is currently minimal, and the projected demand for storage solutions is significant. We are evaluating this to ensure we can meet future needs.
Q: Can you provide the FY24 consolidated numbers for JSW Neo Energy?
A: (Pritesh Vinay, CFO) Please connect with the IR team for detailed numbers.
Q: What is the CapEx breakdown for the INR150 billion? How much is for battery storage?
A: (Pritesh Vinay, CFO) We are in advanced stages of finalizing negotiations with suppliers. By next quarter, we should be able to share the final project cost for battery storage.
Q: What is the timeline for the 3.6 gigawatts of recently won capacity?
A: (Sharad Mahendra, CEO) The PPA signing process will start soon. Typically, it takes about two years from the date of PPA signing to commission the capacity.
Q: What is the average merchant tariff realized in the quarter or FY24?
A: (Pritesh Vinay, CFO) The average day-ahead market price on exchanges for the quarter was about INR4.30. Our realization is significantly higher than that.
Q: What is the EBITDA for Mytrah for the quarter and year?
A: (Sharad Mahendra, CEO) Mytrah's annual EBITDA was INR1,403 crore, and for the quarter, it was INR244 crore.
Q: What is the variable cost per unit for Ind-Barath?
A: (Pritesh Vinay, CFO) The landed cost of coal from Shakti auctions is between INR2.7 to INR2.9 per unit. Recent auctions have secured coal at nil premium, reducing the cost to under INR2.50 per unit.
Q: What is the biggest challenge in achieving FY25-26 renewable capacity addition plans?
A: (Sharad Mahendra, CEO) Key challenges include land acquisition, evacuation and connectivity, and availability of solar modules and wind turbines. We have already secured significant capacities and are building the required land bank to meet our targets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
