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00:00 We are now joined by the management of Tata Power to get some perspective on its latest Q4 numbers and the outlook for the company.
00:07 Joining us today is Dr. Praveer Sinha, who is the CEO and Managing Director at Tata Power.
00:12 Good morning, Dr. Sinha.
00:14 Good morning. Thank you for having me on your show.
00:17 Yes. So congratulations on the Q4 numbers.
00:20 My first question would be, what was your perspective on how the quarter went by for the company?
00:26 Thank you. In fact, Q4 has been very good.
00:31 And what we have seen is that there is huge consistency in the way the company has been operating.
00:38 Its performance has been consistently improving.
00:42 And this is the 18th consecutive quarter in which we have seen the growth impact.
00:48 We continue to work on all our operational plans and operational parameters.
00:56 And those get reflected in the financial results that we see every quarter.
01:02 Very good foundation laid for future growth.
01:06 And we expect that the speed of growth in subsequent quarters will be better than what we have seen in the earlier quarters.
01:17 And many of the initiatives that we have done, whether it is the distribution in Odisha,
01:22 where we have stabilized the operations and huge improvements will be seen in subsequent quarters.
01:29 Similarly, the 4 gigawatt manufacturing plant for solar cells and modules.
01:35 The module plant is already operational and the cell will become operational next month.
01:40 So I think the benefits of all that will start coming in the subsequent quarters.
01:45 Similarly, capacity addition in our renewal projects where we have very much focused both for utility scale as well as group capital.
01:54 You will see much better results with more projects getting implemented.
01:59 Rooftop business is doing exceedingly well.
02:02 So I think all in all, our existing as well as new businesses have started showing results.
02:09 And in this year, you will start seeing the full impact of many of these new investments that we have made.
02:17 Okay. My next question is regarding margins.
02:20 Now, there was a slight contraction this quarter when compared to the previous year.
02:23 What could be attributed to this contraction and what's the company's expectations or maybe a range for FY25?
02:32 So, margins, we need to see more on infrastructure projects on a yearly basis rather than on a quarterly basis.
02:41 Because it's a question of timing of some of the investments and costs that gets incurred.
02:47 So if you see on a 12-month basis, our margins have actually improved.
02:52 And we constantly endeavor to see that there is a better improvement in the margins.
03:00 And you would see that now that many of the businesses have stabilized, like I mentioned, Visa and new manufacturing,
03:09 you will see the results of that start coming in the next quarter onward.
03:14 So you will only see improvement in the margins.
03:17 And let's not just look at a quarterly basis, but on a 12-month basis, you would find that we are doing very good.
03:25 And what's the kind of range that the company wants to achieve for maybe FY25?
03:31 Well, we don't give any forward-looking numbers, but it will be better than what we have performed in the last year.
03:42 Okay. My next one question is about the revenue mix.
03:45 Now, on your basis, there was a shift. Transmission contribution was down while there was growth seeing in the renewables and generation.
03:54 What's the target and mix that the company has for the near term?
03:59 So if you see our revenue mix today, there is more revenue that comes out of transmission and distribution business,
04:08 mainly in the distribution, because it is about sale of power.
04:12 But what is important in power business is not the revenue, because the revenue is guided by the cost of input material, coal or gas.
04:22 But it is more about the EBITDA and the PAT of the company.
04:28 And in both of them, we have shown substantial improvement.
04:33 Our EBITDA for the year has gone up by more than 27%.
04:37 Our PAT has gone up by more than 10%, 11%.
04:42 So I think what is important is about the consistency of the performance.
04:49 And we have shown that consistently we have improved the performance.
04:54 And that's why the company is in very solid foundation and we keep on improving year after year.
05:03 Yes. And in terms of growth for the generation business, what's the expected growth that the company has?
05:10 Would it be single digit or double digit?
05:13 Well, in generation, we are already having a renewal of 4.5 gigawatt and another 5.5 is under implementation.
05:23 So we'll become 10 gigawatt virtually in the next 12 to 24 months.
05:28 And we will, of course, add more projects.
05:33 And during this year, we have now taken a call that we will do more of 24/7 power supply solutions,
05:43 which will be a mix of solar, wind and storage battery.
05:47 And at some stage when our pumped hydro comes up, that will get bundled into this power.
05:52 So you will see the capacity addition and growth happening more in the clean energy space.
05:58 And we are very focused on that to improve our performance.
06:02 My next question is the solar utility EPC order book currently at 13,385.
06:08 What's the execution timeline of the current order book and how much of revenue can we expect to realize in FY25?
06:16 So by FY25, we are expecting nearly 4 gigawatt of projects to be implemented.
06:25 Nearly 2.5 will be third party EPC projects and 1.5 will be our own internal projects.
06:32 And similar quantity will get implemented in the subsequent year, which primarily will be our own utility scale projects.
06:40 So I think we are all geared up to do enhanced level of implementation of projects.
06:49 And you will see that over the next few years, all the projects that we have in the pipeline will get implemented.
06:57 And many of the new projects that we get in this year in FY25 will also get implemented in '26 and '27.
07:05 So I think we have a very healthy order book.
07:10 We will implement all of them and ensure that we get better margins while implementing these projects.
07:17 And what is the per megawatt revenue run rate for this solar segment?
07:24 As I mentioned to you, now we are more focused on hybrid solutions.
07:29 So those are a mix of solar and wind and solar, wind and storage.
07:34 And it also depends on the location where these projects are being set up.
07:39 A project in Rajasthan will be very different in structure than what it is in Karnataka or in Gujarat or in Tamil Nadu.
07:48 So I think we need to look at each one of them in terms of how efficient they are in terms of the generation cost
07:57 and how efficiently we can generate and supply to the consumers.
08:03 And what kind of order book growth, what kind of order inflows is the company seeing in Q1 and what are the expectations for FY25?
08:11 So we have a plan which we have shared in the analyst call some few months back.
08:21 And that clearly brings out what is our growth plan and how we will be doing it over a period of time.
08:29 And of course, we don't break it on quarter on quarter, but more on an annual basis
08:34 because many of the bids sometimes get delayed in terms of their auctioning or their opening of the bids.
08:42 But we are very confident that we will build a very healthy pipeline of projects during the year,
08:49 considering that a huge amount of bids are expected to come in this year.
08:53 My next question is regarding the 4.3 gigawatt solar module plant that did start.
08:59 What were the revenues realized from the plant itself?
09:02 And is the plant currently fully commercialized or is just a phase wise production currently?
09:08 So the 4 gigawatt module plant is fully operational.
09:14 We supplied nearly 150 megawatt of modules from the plant in the month of March.
09:20 And now regularly the production is taking place and dispatches are happening.
09:27 So the module plant is fully operational and we will see in this full year the full visibility of the module production.
09:36 Our cell plant will get operational next month and we do expect it will take about two, three months for it to stabilize.
09:44 And hopefully by September the plant will be fully operational.
09:50 So I think you will start seeing the results of this plant in this year itself and also in the subsequent years.
09:58 And in terms of percentage of the self-produced panels, how much percentage is used in the company's group capital or the order book itself?
10:08 So out of the 4 gigawatt, nearly 3 will be consumed internally for our group capital, utility scale as well as rooftop.
10:19 And about 1 gigawatt we will be selling.
10:22 And we also wanted to get an update on the Odisha Discoms.
10:25 How have they been performing and what's the profitability target that the company does have?
10:32 So Odisha Discoms has been making profit right from day one, which is a big turnaround story of public-private initiative in Odisha.
10:43 It has also performed very well on all the operational and customer services parameters.
10:51 And I think it has made profit, all the 4 Discoms have made profit in last year also.
11:00 It's about 300 odd crores.
11:02 And going forward, this will further improve because many of the issues which were there regarding billing and collection have been resolved.
11:11 And the full benefit will start coming from FY25 onwards.
11:16 [Music]