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NTPC Ltd
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Ladies and gentlemen, good day, and welcome to Q3 FY '22 Earnings Conference Call of NTPC Limited, hosted by IIFL Securities. [Operator Instructions]I now hand the conference over to Mr. Harshavardhan Dole from IIFL Securities. Thank you, and over to you, sir.
Thank you, Margaret. Greetings, everyone.On behalf of IIFL Securities, I welcome you all for the third quarter earnings call of NTPC. To discuss the stellar performance of the NTPC Group, we have today the entire senior management team of NTPC, whom I'd like to congratulate and also like to congratulate and appreciate the Board's token of paying out a handsome dividend.To discuss the numbers in detail and share the performance outlook, we have Mr. A.K. Gautam; Director, Finance; Mr. Dillip Kumar Patel, Director, Human Resources; Mr. Ramesh Babu V., Director, Operations; Mr. Chandan Kumar Mondol, Director, Commercial; Mr. Ujjwal Kanti Bhattacharya, Director, Projects.Without much of a delay, I'd like to hand over the line to NTPC management, who will make the opening remarks, subsequent to which the floor can be opened for Q&A. Over to you, sir.
Thank you, Harsh. A very good evening to everybody. I, A.K. Gautam, Director of Finance, welcome all of you to the Q3 FY '22 con call of NTPC Limited. I have with me, Shri. Dillip Kumar Patel, Director, Human Resources; Shri. Ramesh Babu V, Director, Operations; Shri. Chandan Kumar Mondol, Director, Commercial; and Shri. Ujjwal Kanti Bhattacharya; Director, Projects. I have also with me the other key members of NTPC team.Company has announced the unaudited financial results for the third quarter and 9 months of FY '22 today. The key performance highlights for the third quarter and 9 months ended 31 December, '21, have already been disclosed on both our stock exchanges.Now briefly upon operational highlights for Q3 and 9 months of FY '22. NTPC standalone gross generation in Q3 FY '22 is 72.70 billion units and in 9 months FY '22 is 219.26 billion units as compared to 65.42 billion units and 193.28 billion units in the corresponding previous period, registering an increase of 11.13% and 13.44%, respectively. Gross generation of NTPC Group in Q3 FY '22 is 87.92 billion units and in 9 months FY '22 is 264.70 billion units, as compared to 76.53 million units and 222.41 billion units in the corresponding previous period, registering an increase of 14.88% and 19.01%, respectively.In Q3 FY '22, we have added 1,327.42 megawatt to our commercial capacity, comprising 660 megawatts at Barh, 80 megawatt solar capacity at Jetsar, 49.92 megawatt solar capacity at Fatehgarh, 37.50 megawatt floating solar capacity at Ramagundam, 250 megawatt at Barauni, and 250 megawatt at Bhartiya Rail Bijlee Company Limited. Also, after the expiry of validity of the PPA entered into with the erstwhile BSEB, the Board of Directors of NTPC has accorded approval for discontinuation of operations of Muzaffarpur Thermal Power Station, Stage-I 2x110 megawatts of our wholly-owned subsidiary company, Kanti Bijlee Utpadan Nigam Limited.With this, the commercial capacity of NTPC has become 54,302.42 megawatts on a standalone basis and 67,757.42 megawatts for the group as on 31 December 2021. NTPC Group has already commissioned 1,557.42 megawatt for RE projects under EPC mode. 2,999.58 megawatts of solar projects, including ongoing projects of NTPC REL are presently under implementation. In addition, 3,115 megawatt capacity has been won through tariff-based competitive bidding.For 9 months FY '22, NTPC Korba Station has ranked first with PLF of 94.07%, among the top 10 performing stations in the country in terms of PLF. During 9 months FY '22, PLF of coal stations of NTPC was 68.95% as against the national average of 57.02%, thereby, maintaining a spread of almost 12%.During the period, we have suffered losses due to grid restrictions and fuel supply. The generation loss due to grid restriction in coal-based stations was 53.52 billion units in 9 months FY '22, as compared to 84.12 billion units in 9 months FY '21. For the gas-based stations, the loss was 22.75 billion units in 9 months FY '22, as compared to 20.25 billion units in 9 months FY '21. The generation loss on account of fuel supply constraint was 6.02 billion units for 9 months FY '22.Now regarding the status of fuel supply. During the 9 month FY '22, materialization of coal against ACQ was 96.20% as against 88.71% in 9 months FY '21. Coal supply during 9 months FY '22 was 143.42 billion metric tons, comprising of 142.02 million metric tons of domestic coal and 1.40 million metric tons of imported coal. The coal supply during the corresponding previous period was 124.57 million metric tons, with 123.96 million metric tons of domestic coal and 0.61 million metric tons of imported coal.NTPC has achieved a total coal production of 9.65 million metric tons during 9 months FY '22. 9 month FY '21 was 7.12 million metric tons. Cumulatively, 42.03 million metric tons of coal has been excavated from Pakri-Barwadih, Dulanga, Talaipalli coal mines till 31 December 2021. Cumulative expenditure of INR 7,527.16 crores has been incurred on the development of coal mines till 31 December 2021.Environmental management initiative for preserving environment. Flue gas desulphurization are under various stages of implementation for 64 gigawatts of group capacity. FGD systems have already been commissioned for 1,340 megawatt capacity. FGD systems packaged for 60.94 gigawatt capacity are under implementation and FGD system package for 1.45 gigawatts capacity are under various stages of tendering.Now some update over the financial highlights. Gross sales for Q3 FY '22 is INR 28,705.04 crores as against corresponding quarter of previous year gross sales of INR 24,471.07 crores, registering an increase of 17.30%. On a 9-month basis, there is an increase of 14.28% in the gross sales. That is from INR 72,504.83 crores in 9 months FY '21 to INR 82,860.67 crores in 9 months FY '22.Total income for Q3 FY '22 is INR 29,837.13 crores as against corresponding quarter of previous year. Total income of INR 25,268.56 crores, registering an increase of 18.08%. On 9 month basis, there is an increase of 14.07% in the total income, that is from INR 75,312.89 crores in 9 months FY '21 to INR 85,912.38 crores in 9 months FY '22.Profit before tax for Q3 FY '22 is INR 5,409.01 crores as against INR 3,561.59 crores in the corresponding quarter of the previous year, registering an increase of 51.87%. On a 9 month basis, PBT is INR 12,678.27 crores as against INR 10,126.31 crores in 9 month FY '21, registering an increase of 25.02%.Profit after tax for Q3 FY '22 is INR 4,131.99 crores as against INR 3,315.34 crores in the corresponding quarter of the previous year, registering an increase of 24.63%. On a 9 month basis, PAT is INR 10,489.53 crore as against INR 9,290.30 crores in 9 months FY '21, registering an increase of 12.91%.Total income of group for 9 months FY '22 is INR 97,269.89 crores as against INR 83,859.59 crores in the corresponding period of the previous year, registering an increase of 16%. Profit after tax of the group for 9 months FY '22 is INR 11,760.78 crores as against INR 10,319.91 crores in the corresponding period of the previous year, registering an increase of 13.96%.The Board has declared interim dividend at the rate of 40% of the paid-up share capital, that is INR 4 per share. During the Q3 FY '22, we have accounted dividend income of INR 628.39 crores from our subsidies and joint venture companies as against INR 5 crores received during the Q3 of FY '21.An update on various other financial activities. The regulated equity as on 31 December '21 was INR 70,452.69 crores. Now some update about fund mobilization. NTPC has issued unsecured debentures aggregating to INR 1,175 crores at a yearly coupon of 6.74% on 20 December 2021, for a period of 10 years, 3 months and 25 days. Average cost of borrowing for 9 months FY '22 is 5.95% as compared to 6.26% in 9 months FY '21. During Q3 FY '21, NTPC has signed term loan agreements of INR 3,000 crores and INR 1,500 crores with HDFC Bank and IndusInd Bank, respectively, totaling to INR 4,500 crores.Now certain update about CapEx. In 9 months FY '22, we have incurred a group CapEx of INR 25,064.10 crores as compared to INR 12,983.14 crores in the previous period. NTPC Limited has awarded project of standalone fuel cell-based microgrids with hydrogen production using electrolyzers at NTPC Simhadri that is in Andhra Pradesh. This will be India's first green hydrogen-based energy storage project. It would be precursor to large-scale hydrogen energy storage projects and would be useful for studying and developing multiple microgrids in various off-grid and strategic locations of the country.The hydrogen would be produced using the advanced 240 kilowatt solid oxide electrolyzer by taking input power from the nearby floating solar power project. This unique project contribution is designed in-house by NTPC. This unique project for India would open doors for decarbonizing the far-off regions of the country like Ladakh, Jammu-Kashmir, et cetera, hitherto dependent on diesel generators.The project is in line with the vision of honorable Prime Minister for becoming carbon-neutral by 2070 and making Ladakh a carbon-neutral territory. NTPC and EDF France has signed an MOU to explore power sector related investment opportunities in Middle East, Europe, Africa and Asia. The MOU also envisage collaboration in the areas of R&D, efficiency improvement, consultancy, capacity building, hydrogen economy, electricity distribution, apart from joint development of power generation projects, including, but not limited to solar, wind, hydro and waste-to-energy projects.NTPC, along with ISA, signed grant agreement with Comoros and Ethiopia, for implementation of solarization projects as a PMC consultant for ISA. NTPC has been supporting 19 member countries of ISA under this solarization program for last one year under a partnership agreement with ISA. NTPC and Indian oil signed a memorandum of understanding to collaborate in the field of renewable energy and mutually explore opportunities for supply of low-carbon/RE RTC captive power. This is a first-of-its-kind novel initiative by 2 leading national energy majors of India, to support the country's commitment to achieve renewable energy targets and reduce greenhouse gas emissions.An MOU for cooperation in overseas power sector was signed between NTPC and Inter Rao-Export LLC. MOU was signed for cooperation in taking up project development, capacity building and consultancy assignments outside India. NTPC NETRA signed MOU with Greater Noida Industrial Development Authority for long-term supply of 20 tonnes per day refused derived fuel for Greater Noida Authority to NTPC NETRA. This initiative will help NETRA to demonstrate an environment-friendly technology to produce green power and chemical from RDF, and is planned under the theme of NETRA Green Campus, where the campus will have 24/7 green power from solar PV, battery storage, hydrogen and RDF.Now, I will briefly touch upon some of the NTPC group companies. The performance of our JV and subsidiaries is exemplary. In 9 months FY '22, our subsidiaries have earned a profit of INR 1,788.04 crores in 9 months FY '22, as compared to INR 1,042.54 crores in the corresponding period of the previous year, registering an increase of 71.51%. The share of NTPC in JV profit has increased by 73.66% from INR 480.50 crores in 9 month FY '21 to INR 834.44 crores in 9 months FY '22.NVVN, our trading subsidy, transacted 17.92 billion units during the 9 months FY '22 as against 12.70 billion units during 9 months FY '21, registering a growth of over 41%. In an endeavor towards sustainable development, NTPC with NTPC Vidyut Vyapar Nigam Limited, a wholly-owned subsidiary of NTPC Limited, has signed an agreement with Varanasi Nagar Nigam, for setting up a waste-to-energy plant. The plant shall help in mitigating environmental hazards caused by solid waste and bring clean surroundings, contributing towards Swachh Bharat. The plant shall be a milestone for the Holy City of Varanasi towards Atmanirbhar Bharat, using the latest indigenous Make in India technology for solid waste management in the country.Varanasi Nagar Nigam has allocated about 20 acres of land for setting up the plant. NVVN has signed a similar agreement with Bhopal Municipal Corporation also. NTPC continues to win laurels and awards in various fields. Major awards received in Q3 FY '22 are as follows. NTPC has received ESG India Leadership Award 2021 for playing a key role in air pollution management. The award was presented for excellent practices for reducing and monitoring air pollutant emissions.NTPC has been conferred prestigious SHRM Special Recognition for Learning and Development for the year 2021. NTPC has been honored with 7 CSR Impact awards in the wash water, sanitation and hygiene, large category for the project revival of municipal solid waste plant, Karsada, at the India CSR Summit. NTPC received Company with the Best CSR Practice Award in 8th Asia Business Responsibility Summit organized by Asian Centre for Corporate Governance and Sustainability. These were some of the highlights I wanted to share before we begin with the question-and-answer session. Thank you.
Margaret, can we open the floor for Q&A?
[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.
And congratulations on very good set of numbers. Sir, my first question is on the adjustable profit. Is it possible to share the adjusted profit for the quarter. And in Notes to Accounts 3B, you mentioned 6.7 billion as prior period. Is there any amount, which is also recognized in the fuel?
Yes. Regarding adjusted profit, you can contact Aditya Dar. He will be submitting separately. And regarding -- you were asking about Note #3B…
3B, out of 6.7 billion of income which we recognized...
It also includes the previous year fuel of 61.81 crores in Q3 FY '22.
Understood, sir. Sir, my second question is I understand that you have roughly around 7.4 gigawatts of renewables portfolio, which includes under operation, under implementation and the amount, which you have won in the bids. But how much you expect to commission over the next 3 years based on the contractual commitments at this point of time? Is it possible to share that number over the next 3 years?
Sure. I will request Mohit to answer this question, please? Mohit?
Yes. Next 3 years, contractually, there is certainly no commitment because the lead time is about 18 months to 24 months only. But over the next 2 years, our target is to do over -- close to about 3.5 gigawatts. And beyond that, once we get the LoAs, we'll start working on that also.
Understood. Sir, lastly, is there a proposal to transfer the standalone renewables portfolio to NTPC Renewables Limited?
Yes. Today, we made a disclosure in the Board. We have decided that we will be creating FPV, under which the certain identified solar assets will be transferred through, which, a monetization, we are planning to do some monetization.
The next question is from the line of Deepika Mundra from JPMorgan.
Sir, I just wanted over the next 2, 3-year period guidance on CapEx and how much of that is likely to go towards renewables? Also, you mentioned certain projects in green hydrogen and battery storage. Are those CapEx commitments that will be going in from NTPC?
Director, Project, maybe answering this question. See, this year, we have a CapEx target of [ INR 23,736 crores ], and we are more than 90% already. And we are sure to achieve this and maybe we'll try to go a bit more. Next year, our target is [ INR 22,500 crores ] and out of which, the proportion of renewable will be of the order of 40%. This is the position today.
Second portion, regarding RE?
Regarding hydrogen and battery solutions.
Yes. So regarding hydrogen, I think one of the points was mentioned earlier that we already started work on a hydrogen-based microgrid. We also intend to take up a couple of other pilot projects, green hydrogen, green hydrogen-based mobility and then also for our green hydrogen blending. Other than that, we have already issued a tender for procurement of 3,000 megawatt hours of storage capacity, which we intend to use mainly for entering into contracts for supplying round the clock power to the customer. And we also intend to come out separately with CapEx-based battery solutions also.
I understood. And sir, can you talk a little bit about the procurement strategy for these kind of projects for battery as well as for electrolyzers for the green hydrogen project?
You see, as a government-owned company, all our procurement has to be through a transparent bidding process only. But what we intend to do in the case based on the electrolyzer side is that we intend to come out with a medium-term partnership basis, the lowest price offered by the manufacturers. So that's on the anvil. And on the battery side, like I said, we've already come up with 3,000 megawatt hour bid, which will be used. And once we are able to tie that up, we'll be coming out with large capacities also.
Right, sir. If you can just give a CapEx number for [indiscernible], it would be helpful.
It will be tied up once we have the numbers on the table, once we have the final bids with us.
The next question is from the line of Apoorva Bahadur from Investec.
Sir, any updates on the renewable business, IP, or possible monetization now that we are planning to add the standalone renewable assets as well, so time lines on that?
Yes. As already told that identified renewable assets will be transferred to our SPV or a separate subsidiary company, for which we will be seeking an exemption from the Government of India regarding exemption from the capital gain tax. And as soon as that exemption is available, we will be doing -- most probably, this will be done in the next financial year, say, by October '22.
Okay. Very useful, sir. Sir, secondly, on the storage tender, for which we have come out with recently. So can you throw some light on the economics there? So, will we be doing like a back-to-back agreement? Or will it be more like we will be tying up that capacity and as and when the opportunity comes up for RTC Power, we will be bidding based on that? Also, the renewable capacity, which will be used to charge this storage, will this be separate from our existing pipeline? Or do we intend to use the curtailed electricity from our existing projects?
Okay. I think part of that, you've answered yourself because this tender for battery will be used largely for back-to-back orders only. Obviously, we cannot be sitting on this capacity. So once we have this capacity in place, people [indiscernible]. Secondly, the charging power, and these are all expected to be RE-based storage solutions only. So all that RE capacity is not yet included in the pipeline and would be taken up once we enter into firm contracts out there.
Okay. So, we had also come out with a domestic module EoI. So wanted to check what sort of interest have we received, given that there is probably going to be a module shortage since the government will be imposing BCD and Chinese modules and domestic capacity is not yet there?
So, we have received interest on practically all the module manufacturers, including the guys who have applied for the PLI scheme, practically all of them. And we intend to come out with a firm RFP maybe by the end of March.
Okay. Sir, last question from my side, if I may, and this is on the thermal capacity addition. So any new projects have been added to the pipeline? I think there were discussions on Talcher.
Yes, yes. I think Ujjwal, Director, Projects, will be giving this answer.
As we told earlier also, and we are consistent to that, we are going for higher of renewable capacity addition in our portfolio and reducing our dependence on coal, per se, and fossil fuel in general. But we are also going through a transition process. You know that Government of India has declared 2070 as the net zero. So, we, in consultation with Ministry of Power are now on the drawing board and creating a new paradigm. Some capacity on the thermal are going to be added. And we have already advertised an NIT for a 1,320 megawatt of coal-based power project at Talcher. And you must have seen it in the newspaper already. So the process of Talcher expansion by 1,320 megawatts based on coal is on.
[Operator Instructions] The next question is from the line of Subhadip Mitra from JM Financial.
So, my question is largely with regard to the CapEx that you're looking at, while I think you gave us the FY '22 and the '23 numbers. Any clarity on what the FY '24 CapEx number will look like and how that gets bifurcated between thermal as well as renewables?
Yes. That FY '24 are being built up now. What we have frozen so far is 18,921 and we'll definitely add much more. As I told the current year is 23,736. Next year, we have already firmed up 22,454 and for the FY '24, as I told, 18,291 has been firmed up, and we'll be adding much more on that. I will come back to you as we engage.
Sir, within this 18,291, how much would be the renewable part?
I told that for the next financial year, approximately 40% is the renewables and going progressively forward, the renewables will be more. But since we have started adding some of the thermal capacities, I think in FY '24, also the proportion of renewables will remain around 40% to 45%, then it will go up progressively very high.
Understood. Lastly, if you can also help us with the plant-wise capacity additions that we are looking at in FY '23 and '24?
Okay. For FY '23, that North Karanpura, Unit 1, 660 megawatt. Then Barh, Unit 2, 660 megawatt; Telangana, one unit of 800 megawatt Unit #1, and then Telangana Unit #2 also 800 megawatt. Then Durgapur, there is a small unit of 40 megawatt. Bangladesh is going to be completed, both Unit 1 and 2, 1,320 megawatt and solar, 1,207, and we'll be adding probably more and working on that. And these are stand-alone.If you look at the group, the THDC hydro pumped storage at Tehri, 4x250 megawatt will come, 1,000 megawatts. And through NREL, we'll be adding probably another 820 to 1,200 megawatts more. So if I concluded the NTPC Group, the capacity will be something between 7,300 megawatts to 8,000 megawatts. And for the FY '24, the total capacity on the board is 4,034. And as we told that we are going to go, add more and more renewable, so we'll add some more renewable capacity. As of now, it is 4,034. Predominantly, thermal Barh Unit 1 -- sorry, Barh Stage 1 Unit #3, 660, North Karanpura, Unit #2, 660 megawatt, North Karanpura Unit #3, 660 megawatt, Patratu in the Jharkhand state near Ranchi, 800 megawatt, first unit. Then on the THDC Thermal, which is near Khurja, first unit of 660 megawatt and the THDC hydro project at Vishnugad Pipalkoti, 444 megawatt. Through NREL, we are planning 150, but definitely, 150 is a capacity to become, in my opinion, no less than 3,000 by that time. So on the drawing board as on date, it is 4,034 roughly, but likely to go around 6,000.
Thank you so much. Sorry, sir, you were saying something.
No, no. I told that beyond this, we are not projecting because we are reworking on the thing. And regarding thermal, I was just answering the question of somebody a couple of minutes ago. And as we are going increasingly to renewables, but considering the transition and the transition to fuel [ deferment ], we are going for addition of some thermal power station. Talcher, we have started. We're also looking out at some other power projects like Singrauli, Lara, Talaipalli, et cetera, amounting to 5,320 megawatt.But one thing I will like to share with all of you, with our investors that consistent with our approach of reaching the decarbonization process and net zero, ultimately, by 2070, these thermal capacities will not be business as usual. We'll be going for what we are terming as blue coal technology, but the carbon footprint we are trying to bring down as progressively lower and possibly, if we can up to the level of CCGT. But that is all talk. Let's see what we can do.
And these incremental thermal additions will all be on the ROV-based mechanism?
The incremental thermal capacity will be based on ROV.
Yes. For sure, ROV.
Understood. One last question, if I may sneak in. So while I think there was an earlier question on your divestment of the solar assets, just wanted to get some clarity. I think there has been a lot of news flow around the fact that you are looking at probably a strategic partner or a strategic scale happening at the renewable subsidiary level. So, I just wanted to understand that this exemption on capital gains for sale of certain solar assets that you mentioned, this would be separate from the strategic partner that we're looking at for the overall solar subsidiary?
No, no. As I mentioned earlier also, we will be transferring certain identified solar assets to the new subsidiary or a new FPV, through which we will be doing this monetization, either through IPO, regular IPO or through some strategic partners. But these transfers will be made only after we receive exemption regarding the capital gain tax from the Ministry of Finance.
The next question is from the line of Puneet Gulati from HSBC.
Can you talk a bit about what is the plan for the FGD completion? When can we expect all these FGDs to be commissioned, at least around which have been tendered out?
See, FGD, as you are probably aware, that we have already started working on 660 into 2 megawatt of FGD, all across the country, out of which 1,340 has already been completed, right? That spans 5 units, another [ 1 billion ] units we are working. At Dadri, Unit 5 and Unit 6 will be commissioned by June. Dadri Unit 5 is already commissioned, so to say, and we'll declare it in another 7 days' time. Jhajjar, which is at the [indiscernible] one unit will be ready by, you can say, February, commissioned, and then progressively 4 months afterwards, second and third unit. These are the things, which are commissioned -- which are going to be commissioned in this financial year itself. And then we are also expecting the Khargone 660 megawatt in this financial year '21-'22 and Unchahar, 500 megawatt in this financial year itself. Then Tanda 220 megawatt, and that takes us to a total of 2,370 megawatt.Should I give in totality the numbers?
Yes. I think [indiscernible] 2,370.
Yes, yes. The total is 62,280 megawatts, of which 1,340 has been completed. '22, '23 FY, we will be completing around 22,790 megawatts. '23-'24, we have a target of 15,270 megawatt and balance 22,880 megawatts, we will be completing in '24-'25.
And can you also talk a bit about what kind of EBITDA are you expecting from your renewable assets getting into '23 or FY '24?
What kind of -- EBITDA, it is very immature to say. Yes -- but we are expecting return on equity, what we are expecting in case of our thermal power projects because normally, the thermal power projects, they take a minimum gestation period of 6 years to 6 years. Here, in case of renewable energy projects, it is, say, 12 months to 18 months. So corresponding, we are considering the corresponding ROE in case of renewable energy projects.
On an IRR basis.
Yes.
Okay. So IRR of about 13% odd is something that you would be looking at since you get [ 15.5% ] ROE.
12%. Not 13%, 12%, you can say. 11% to 12%.
Equity IRR.
Yes.
My last question is while you've been doing a lot of work on solar, there is also talk on storage. So far, what I know is there is only a 50-megawatt wind. Am I missing something? Or are you deliberately not doing wind? Or is there any hurdle in doing wind?
So can you come again? What was the question?
Not clear.
Yes. So to my knowledge, there is only 50 megawatts of wind in your portfolio so far? Have I got it wrong? Or is this correct and you are deliberately trying to avoid wind? Or is there a reason to avoid doing winds?
No, no, that number is correct. But we are not avoiding that. We've already started work on another 150 megawatt, and we intend to take up wind in a major way. So, there's no deliberate avoidance of any kind.
Okay. And I would presume hybrids would follow post that as well?
Yes. So for your information, we've already won a 450-megawatt hybrid tender 4 months ago [indiscernible] SECI. So we are well into that, and we are also participating now in new hybrid and wind tenders also.
The next question is from the line of Anuj Upadhyay from HDFC Securities.
And congrats on a good set of numbers, sir. Sir, 2 questions. One is the reason for low availability during the quarter? And was there any under recovery for the quarter and 9 months? If you can provide, it would be very helpful, sir. And secondly, I missed on the figure of NTPC share across the JV and subsidiary for 3Q and 9 months, if you can share those would be helpful, sir.
So regarding first question, our Director, Operations, Mr. Ramesh Babu will be answering this question.
The low availability was because we have taken the planned outage of our units compared to last year. It was 4.4%. It was a planned outage. This year it is around 7.67%. So due to COVID, whichever units that we could not take for outage, all these units have been taken. In the last year, in the first 9 months, we did only [ 20 overhauls ]. This year, we've done already 35, another 5 overhauls are in progress. So that was the reason why there was an availability loss. But nevertheless, it's more than the required 85%.Regarding the under recovery, there has been around INR 650 crores is the under recovery as of now. And by the end of the year, it would come down to around INR 350 crores. As of now, already, it is less than another INR 50 crores. Now it's also [ INR 590 crores ] as of today. So by end of the year, we are around INR 350 crores. In this also, another -- around INR 70 crores, we will be approaching the CRC because 3 of our units have actually yet to take overall for a longer time due to COVID. So for this, we will be approaching CRC for relaxations. So it would be around [ INR 364 crores ] at the end of the year, under recovery.[
Just to confirm, sir -- sorry, sir, just to confirm, you mentioned 9 months under recovery was in the range of INR 650 crores? Am I right, sir?
Yes.
And target is to bring it down to [ INR 350 crores ].
As we move along, another 3 months is there. The DC would increase and slowly, we'll be reducing the under recovery.
Okay. And for the quarter, sir, if you can quantify, Q3?
But this under recovery, we generally consider it on a cumulative basis only. Under recovery always comes under cumulative basis.
Fair point, sir.
INR 218 crores.
2-1-8 or 2-8-0?
Yes. INR 218 crores.
And on the JV share, sir?
Yes, yes. With respect to your second part, the subsidiaries, they have contributed INR 1,788.5 crores in 9-month period and quarter, it is INR 814.52 crores, and joint ventures INR 834.44 crores and INR 307.99 crores.
The next question is from the line of Anupam Goswami from B&K Securities.
First of all, congratulations on the good set of numbers. Sir, my first question is a follow-up of the previous question. You mentioned about the capacities that are likely to come up in FY '22 and '24. Sir, my question is on the CWIP amount, equivalent amount that will be transferred from CWIP to gross block in FY '23 to '24?
We just can't mention right now, but you can estimate based on the -- this -- which has been mentioned by Director, Projects, regarding commissioning target, multiplied by, you can identify how much CWIP will be converted into fixed assets. But right now, it will be difficult to tell.
Otherwise, can we think about a ballpark?
You can roughly multiply it by around INR 5 crores, around INR 5 crores per megawatt.
And sir, what is our receivables amount at the end of quarter 3?
Receivables. Trade receivables.
Trade receivables will be well within the 45 days. Right now, if you see our outstanding dues beyond due date, it's only approximately INR 4,500 crores. And more or less, we'll -- I think by 31 March also, it will remain like that only. And total outstanding will be within the 45 days.
And sir, last question on your capacity additions on '23 and '24, how much would be brownfield and how much would be greenfield on the thermal side?
It will be all brownfield only. It will all be brownfield.
We have stopped going from greenfield projects. Whatever expansion we will go for, these are all will be brownfield. And where we don't need to go for fresh land acquisition, we have water availability and we have also grid connectivity around that.
The next question is from the line of Atul Tiwari from Citi.
Yes, sir. Sir, what will be the regulatory equity at the end of third quarter?
It is 70,453 crores.
Okay. 70,430 crores in the equity. And sir, you mentioned about...
70,453.
Okay, 70,453. Okay, sir. And sir, what was the total amount of dividends received from subsidiaries and JVs in the quarter, INR 600 odd crores, right? I mean I did not get that number correctly. Can you please repeat that?
Yes, yes. It is October to December quarter, it is INR 631 crores.
And what was it last year in the same quarter?
Last year was only INR 7 crores.
Okay. So sir, I mean, if I exclude the dividends from the other income of both the last year and this year, it looks like other income has come off quite meaningfully year-on-year. So, what will be the reason for that?
There is a reduction in surcharge amount.
Okay. Okay. And sir, broadly speaking, I mean, if I kind of reduce the prior period sales of INR 600 odd crores and the dividend from subsidiaries of INR 600 odd crores, it looks like that the recurring PAT has declined year-on-year. Is that a right understanding? Or is there some other one-off items which [ I am missing ] here?
No, it has not declined. I think you are going towards the adjusted PAT numbers. So, I think Aditya would be giving you separately.
Okay, sir. Okay. We'll wait for that.
The next question is from the line of Rahul Modi from ICICI Securities.
And big congratulations on a great set of numbers. Sir, just a couple of questions I had. Sir, where are we in the process of moving Nabinagar and Kanti into the standalone entity? We were looking to do that. When do we expect to conclude that?
Actually, that issue is pending in the MCA. We are -- we were thinking that this process will be completed by 31 March, but probably this will go up to June.
Sir, my second question is, sir, in the [Technical Difficulty] the older tenders are also in the renewable space. Obviously, there has been a significant increase in the module prices. So, are we facing any delays or cost overruns on that account? Or we are fairly confident that the delivery will be met on schedule and on the contracted price?
There are definitely delays because -- not only because of the increase in module prices, but also on account of COVID and all. But we don't expect any price increase because mostly these are fixed price contracts. And if there is any sale, that is mainly on account of [indiscernible].
Right. And sir, for the CPSU tender, what is the progress there, the 2 gigawatts that we had won?
On the CPSU tender for 2 gigawatt, we've already signed the power purchase agreements for 1,000 megawatt, and we hope to start work on that by the end of March. And for balance capacity also, we hope to start work in another 6 months.
Right. So sir, in the -- so in this, we are in these 2 gigawatts, we'll have to procure models locally from -- this is under DCR?
Yes. It is under DCR. So the sales and modules have to procure from domestic. That's why the time given -- which is why the time given is also slightly longer by the government.
Right. Noted. And sir, what are the tenders which you are expected to see in the market? Any quantification on that in the both -- in renewables overall over the next 12 months?
I'm not very clear what you want to know. You want the tenders which we plan to issue or tenders which…
Tenders, which we are expecting. Quantum of tenders which we are expecting you will be participating in the bids?
So that's a very rough number. SECI says they might be coming around with tenders or close to 10 gigawatts in the next 6 months. So that's all based on information not available within SECI.
The next question is from the line of Sumit Kishore from Axis Capital.
And congrats on a good set of numbers. My first question is, what is the total commercial capacity, which has completed 25-year PPA period currently? And how much of this capacity has seen an extension of PPA? And also, if you could clarify what is the current status on the bargaining PPA with BSES and Tata within the news flow that we have seen in news here?
On the total -- by March '22, I think around 14,000 megawatts we'll complete 25 years.
What was the second question?
Update about Dadri.
And for the 14 gigawatt, has the PPA being extended and for what duration?
So PPA is already there. All our PPAs in 14 gigawatt. As far as we are concerned, it is only a perpetual PPA. So, there is no exit close from this PPA. It is only that government has come out with a guideline by virtue of the guidelines, discom can exit from the PPA, right, if they are following that guideline. Otherwise, there is no clause in the PPA to exit after 25 years.
Sure. And the Dadri?
Yes. Dadri, I think this Delhi discom, they approached CERC, and CERC has given orders that they can exit. Subject to that, government deallocated power because as far as we are concerned, this government under the sovereign power, they are allocating this power. Our PPA does not talk about any megawatt. It is only -- this allocation is done by Government of India. So, they have challenged. All of the discom, they have challenged it in APTEL. So that hearing is complete. So order is expected any time. Another discom went to Delhi High Court for redressal of this issue. That was rejected by Delhi High Court. So again, that discom has also landed up in APTEL.
Okay. So you mentioned that for Muzaffarnagar, a couple of 110 megawatt unit, the Board has approved for shutdown. In the next 5 years, what is expected for shutdown as far as thermal units are concerned because of [indiscernible]?
We have in Tanda, 4 units, 110 megawatt and in Barauni, 2 units. So, these are the only units, which previously constrained or shutdown. So other 110 megawatt unit, we will be running them. It is required with proper R&M.
Okay. Finally, what was the late payment surcharge for Q3 and the 9 month period?
Yes. For the 9-month period, it is INR 1,695 crores in the April to December '20 and corresponding current period, it is INR 593 crores. If you go through the quarter, October to December '20 is INR 565 crores. And October to December '21, it is INR 173 crores.
Okay. Finally, one bookkeeping question. What is the addition to regulated equity based from the commissioned capital coal mines? So is there any regulated income that you're earning on the state of Pakri-Barwadih, where the project is commissioned for some time now?
Yes, yes, we are running. But I think right now, readily, this figure is not available with me. You can obtain this from Mr. Aditya Dar.
[ It would be around ] 14% RE.
Yes.
14% RE.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to Mr. Harshavardhan Dole for closing comments.
Thank you, Margaret. I sincerely like to thank NTPC management for explaining the results in detail and taking up Q&A. I also like to thank the management for giving us an opportunity to host the call. And ladies and gentlemen, thank you very much for attending this call.Sir, any last comments that you would like to make?
No, no. Thank you very much, Harsh. And you people should be very happy that this time, we have announced a very good dividend. And NTPC, I can only say that we will continue to perform better.
Yes. We are on a growth path and we are showing results.
Yes.
So market should cheer up.
Thank you. On behalf of IIFL Securities, that concludes the conference. Thank you for joining us, and you may now disconnect your lines.