Power Grid Corporation of India Ltd
NSE:POWERGRID
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
Abbvie Inc
NYSE:ABBV
|
Biotechnology
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Realty Income Corp
NYSE:O
|
Real Estate
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
This note will be permanently deleted.
Power Grid Corporation of India Ltd
You don't have any saved screeners yet
On behalf of Power Grid Corporation of India Limited, we welcome you to the analyst meet to discuss the fourth quarter and annual financial statement for the financial year 2023, '24. I now invite Mr. Satyaprakash Dash, Company Secretary, to initiate the proceedings.
Thank you. Good morning, ladies and gentlemen. On behalf of Power Grid, I welcome you all to this investors and analyst meet. Today, our senior management is there with us to discuss the company's business performance and financial things of -- based on the recently published financial results. It's my pleasure to welcome the senior management of Power Grid and introduce them. Mr. R.K. Tyagi, our Chairman and Managing Director; Mr. Abhay Choudhary, Director projects; Mr. G. Ravisankar, Director, Finance and CFO. Before proceeding further, we are presenting a short video on Power Grid. [Presentation]
I will now request our Chairman and managing director to address the gathering. Subsequent to this, the floor will be open for question and answers. Chairman, sir.
Good morning, everyone. Honorable investors, our partners and colleagues, I -- behalf of Power Grid, I want to thank everyone for attending this investors meet. Along with my Board colleagues, Mr. Abhay Choudhary, Mr. G. Ravisankar, are there. Our director personal, Dr. Yatindra Dwivedi, has gone to U.S. for receiving One of the very prestigious ATT Best Award 2024, which we have received for the third time. It is a matter of pride for all of us. I also want to congratulate each one of us for surpassing market cap of INR 3 lak crore on 20th May 2024. And the speed at which it has surpassed from INR 2 lakh crore in first week of December '23 by 20th May '24 almost 5.5 months. So there are many more achievements, milestones in future to come. On behalf of Power Grid, I assure every one of you that we are committed to achieve many more milestones in future. Today, I will cover Power Grid overview, Major highlights, performance of Power Grid, what is the growth outlook in next 7 to 8 years? And what awards and accolades we have received in recent past. As you know, we are a Maharatna company, [indiscernible]. As per DP, we are third profit-making CPSE after ONGC and NTPC. Market cap, as I told that it has -- we have achieved on 20th May INR 3 lakh crore. We have our operations throughout India with neighboring countries like Nepal, Bhutan, Bangladesh, we have cross-border interconnection of about 4,000 megawatts. We also have footprints in 23 countries with 47 subsidiaries, 12 joint venture companies and 4 associates. We are handling huge asset base, 1 of the largest transmission company in the world. Our operations -- our credit rating are excellent. It is at par with sovereign rating, credit rating domestically and international. As I told that this widespread transmission asset about 177,000 circuit kilometer and 1,503 transmission lines are spread across India. You go to any state, our transmission tower is there. We had 278 substations, 5,27,000 [indiscernible] capacity; interregional capacity about 99,580 megawatts, which is almost 83% of interregional capacity. This indicates that more than 100,000 megawatt can be transmitted from one corner of the country to another corner of the country. Power generated in Tamil Nadu, can be transmitted to Leh and Ladakh. Similarly, power generated in -- hydro power generated in Arunachal Pradesh can be fed to Delhi and Haryana. We are handling almost 99% system availability. We are achieving -- last year, it was over 99.80% availability, which is one of the highest in the world. Our trippings also, it is one of the best in the world. So our operations are excellent. And our experts technical expert team is working day and night to ensure availability and reliability of power system in India. Two years back, in 2021, 2022, during COVID period, we have -- everyone witnessed that power supply was maintained reliably. And our dedicated manpower worked day and night even in COVID days and ensured that reliability of power be it Leh, be it Arunachal Pradesh, be it Sikkim. So everywhere, it was maintained. We have HVDC systems about 18 stations 800 kV and 500 kV, which is one of the highest system voltage. One multiple carries almost 6,000 megawatts. That means one tower of HBDC client, it can carry 6,000 megawatts, which is more than the requirement of cities -- metro cities like Mumbai, Hyderabad, Chennai, and other cities, except Delhi, where power demand is about 8,000 megawatts. Otherwise, 1 tower of HVDC can feed 1 full big city -- metro city. We have 62 765 kV substations, 167 400 kV substations and four, reliability and dynamic compensation. For [indiscernible] Power Management, we have dynamic compensation of SVC, static var compensator and STATCOMs 20 numbers. 63 GIS, especially where land scarcity is there. We have state-of-the-art technology through GIS up to 765 kV. And our transmission towers, which are spread on hills, mountain top, river everywhere, whether it be desert, be it dense forest everywhere our towers are spread across country. We have more than 3,800 transformers [indiscernible]. Major highlights. We have won 13 ISTS TBCB projects in financial year '24 -- 2024, like Bidar, which is Bidar Substations and Bidar to Maheshwaram Transmission line, 765 kV level, Sikar-Khetri transmission system. That is 2 transmission lines from Sikar to Khetri and Narela. Koppal II and Gadag II Transmission Limited, which is also 2 numbers of 765 kV lines and one 400 kV line with 2 stations, one 400 kV and 165 kV. Vataman Transmission Limited, it is for evacuation of power to be generated in khavda area. Khavda, it is -- huge potential is there or 40,000 megawatt. So it is part of that transmission evacuation system. Neemrana II Bareilly Transmission Limited, Bikaner to Neemrana. This is for evacuation system of Rajasthan have enabled Power, Bikaner III substation and associated Bikaner III to Neemrana II transmission line. Ramgarh II Transmission Limited. It is Ramgarh substation plus Ramgarh to Bhadla III 765 kV transmission line. Then [indiscernible] 765 kV, Anantapur Kurnool Transmission Limited, Rajasthan, we have Barmer complex -- Jaisalmer and Barmer Complex. It is part of 5.5 gigawatt Part E and Part C. Then Khavda area of Gujarat Phase IV Part II Part E2, which is basically augmentation capacity of Khavda II and Khavda III, KPS 2, KPS 3. In terms of NCT coast, it was about 65% of total projects which were bid in '23, '24 and annual tariff is about 64% of the total. Other highlights. The cabinet approved green energy corridor especially for Ladakh, Pang to Kaithal HVDC and at Pang and Kaithal VSC stations and associated AC transmission line at Pag and [indiscernible]. This was approved in the financial year '23 '24. Then MOU, we have signed with RV P&L, Rajasthan for formation of 76-24 JV company for intrastate transmission projects initially for about INR 10,000 crores, transmission system and maybe later on, many more will be there. Similarly, we are also in discussion with draped transmission company, APTransco, for formation of JV company, similar to Rajasthan and also with Assam and UP. So intra-state transmission system also is likely to be developed by Power Grid through joint venture or through TBCB -- intrastate TBCB companies. We have successfully completed 5 numbers TBCB projects in financial year. We are not only winning the project but also completing. Power Grid Ramgarh Transmission Limited, which is the execution or setting up of Fatehgarh III substation and Fatehgarh III to Fatehgarh II transmission line. Fatehgarh III to Jaisalmer transmission line at 400 kV level. Power Grid Bikaner Transmission Systems Limited, which is setting up of Bikaner 2 substation than from Bikaner 1 to Bikaner 2 400 kV line and then Bikaner 2 to Khetri, 2 numbers of 400 kV double circuit line, then Khetri to Bhiwadi. Then Power Grid Meerut Simbhaoli Transmission Limited. It was basically interstate transmission system part of UP where we have set up Meerut substation, 765 by 400 kV and Simbhaoli, 400 kV substation with the 400 kV transmission line between Meerut and Simbhaoli; and LILO Hapur Noida at Meerut, then Muradnagar to Simbhaoli 400 kV line. So this was commissioned in financial year FY '24. Then most prestigious Power Grid Neemuch Transmission Limited, which was linked with the generation of solar power in Neemuch area. This we have completed in last financial year, which involved Neemuch substation at 400 kV by 220 kV and 400 kV transmission line from Neemuch to Mandsaur and Neemuch to Chittorgarh. Then another intrastate transmission line, Gongti Yamunanagar, Yumuna Transmission Limited, which involved setting up of 400 kV mohanlalganj substation, which is close to Lucknow and associated transmission line in UP. That was also completed last year. Then we also signed a supplementary agreement with Ladakh, Power Development department for setting up of border area works for Ladakh duty sanctioned under RDS as a scheme of Government of India. We also granted patent for thermal energy storage, based air conditioning system and [indiscernible] to manufacture the same. It is a matter of pride for Power Grid that we have been -- our operations have been certified for ISO 55001. For Asset Management System Certification, only limited companies worldwide have been certified for ISO 55001 in recent past. It ensures that reliability of our system is maintained. All risk be it political, be it financial, be it safety, be it reliability of system are taken care if we have ISO 55001 and our reliability is maintained. There will not be any surprise for the management that something has gone bad. So if the system is implemented, then our systems are in place and all risks are taken care beforehand. So it is a very prestigious, I want to complement Power Grid team for achieving this ISO 55001. Your company has also shown transparency. We have been certified by for implementation of anti-bribery management system. ISO 37001 2016. It was recently certified by BIS. So the court of integrity pack transparency and ethics in Power Grid will be insured. They are already there in place, but we have been certified also now. Performance highlights. We have -- as I told, we have executed those 5 TBCB companies, which enrolled 19,0720 MVA capacity, 6 numbers of substations and 4,036 circuit kilometer of transmission line. The name of transmission line are, as I told Bikaner to Khetri, 2 number double circuit lines. Then lower Subansiri, Biswanath Chariali, which is linked with hydro generation of about 2,000 megawatt at Lower Subansiri of NHPC. So these have been commissioned before generation. So 1 line was commissioned in '22, second line has been commissioned now, second double circuit line. Then Khetri Bhiwadi, this I had told Neemuch, Chittorgarh, Sitamarhi, [indiscernible] the international line between Nepal and India. Fatehgarh 3 to Jaisalmer 2, and these are the stations at Meerut, for Fatehgarh 3, Bikaner 2, Simbhaoli, Mohanlalganj and Neemuch. In project execution, we had a target of about INR 8,800 crores last year in FY '24, but with the support of our partners, we were able to achieve INR 12,500 crores CapEx in FY '24, which is about 4% of our -- more than -- over 4% of our gross group block, which is about INR 275,000 crores. This year, we have a target of about 6% growth from 4% to 6%, even which will be around $2 billion, maybe about INR 17,000 crores or we will try to achieve even better than INR 17,000 crores. Capitalization, it was INR 7,638 crores. This year, we will try to double it. And we have many projects in pipeline, and we are working day and night to achieve our capitalization double of what we achieved last year. maybe around INR 15,000 crores to INR 16,000 crores. Our operational efficiency, I told that it is one of the best in the world. And continuously, we have been achieving. That means our operations are in safe hand. Our experts are working day and night. We were able to achieve 95% availability last year, and tripping was 0.28 tripping per line that indicates that 4 lines -- out of 4 lines, only 1 line trips in -- or 1 line trips in 4 years, 0.28 trippings per line. And this has been possible by adoption of latest technology, intelligent inspection in Power Grid. We are using head gears to ensure that every activity is monitored by experts sitting at control center and person working at site will be transmitting the picture or the details of the work being done at site through head gear to the experts sitting in control center, the reliability centered maintenance I told that all assets are being mapped and we are mapping each asset if we have 290,000 towers or 3,800 transformers and reactors, around 15,000 breakers, about 20,000 current transformers, about 14,000 [ CBTs ], 12,000 about [indiscernible]. So put together, we have about 400,000 equipments together. So manually, it is not possible to monitor and analyze and map the risk involved in each asset. So we have mapped each and every asset digitally, and we have mapped risk associated with each element digitally and action taken for repair and maintenance, monitoring are being done, considering risk involved in each element or each equipment. So through reliability center maintenance, we will be able to ensure that there is no surprise for the management. Everything will appear on the dashboard and all this will be mitigated before time. The remote operation of substations. As you know that our all substations are being remotely operated from our control center at Manesar and digital control center in each region. So all stations are unmanned operations are remotely done. So chances of human error are minimized to ensure that reliability and federal accidents and everything can be ensured in a better way. Then equipment through pumps Power Grid asset light management system. Digital substations, we have implemented at Malerkotla, and Chandigarh. Now we have 2 more stations, 1 at Navsari, 765 kV and Kanpur 400 kV. Through petroling of transmission line, we are using high Zoom camera and drone petrolling is also being done. Once picture is taken through camera through drone or manually, this picture is transmitted to the software through internet -- through our internal communication system, then automatically defects are identified and effects will be identified in each and every tower and automatically, through artificial intelligence and machine learning, the data will be transmitted to the maintenance engineer or maintenance crew at site and automatically defect will be communicated and the defect report will be made. So that action can be taken by the concerned maintenance engineer. So without waiting for the report from site, the report is generated automatically so that action and reliability of the system can be maintained. We have center of excellence for control and protection system at our control center in Manesar, and PG-DARPAN and other applications are in place to ensure that our transmission network is safe, it is reliable, it is properly maintained. I will tell that we are in process of implementing asset management performance. Through world-renowned vendors like IBM, Accenture, G, TCS, LTI, Mindtree [indiscernible], and this asset performance management system has been implemented by will best utilities like Terna Italy, Fingrid Finland, ISA Colombia, National Grid U.K., Tenet Netherland, TNB Malaysia, OETC Oman, then AIR Grid Ireland, DEWA in UAE. Our experts have visited Terna Italy, ISA Colombia, Fingrid Finland and ElectraNet Australia to see their system so that best of these utilities can be implemented in Power Grid. These utilities claim that the operations cost can be optimized. It can be reduced by 15% to 20%. So after implementation of this asset performance management system, we are hopeful that at least 10% operations cost can be reduced in Power Grid also apart from ensuring reliability and security and risk management. The financial performance. If we talk of quarter 4 FY '24, income was about INR 12,254 crores. Profit is INR 4,128 crores. There was some -- then in -- on consol basis, this was INR 12,305 crore and profit is INR 4,156 crore. So there is a slight dip in Q4 because of onetime order of [indiscernible], we got some areas in last quarter of financial year 2023. And there was some year pending. There were some CRC order received in the last quarter of FY '23, and we got somewhere about INR 200 crores for Nagapattinam, our TBCB project, which was spending for some time. And we got some onetime tariff for these assets. So that is why last year, it was slightly more as compared to this year if you see the profit, so it is slightly different. So this is because of that reason. If we talk of total financial year, we have achieved about INR 45,815 crores income, profit of INR 15,475 crores. which is slightly higher than the total income we achieved in FY '23. On consol basis, also, it is slightly better than INR 46,913 crores and profit is against INR 15,420 crores. Our overall on consol basis, profit was INR 15,873 crores. So on Q4 to Q4 comparison, we are slightly lower considering our onetime order for [indiscernible] and Nagapattinam, but on overall basis for the financial year, we are slightly almost 1% higher than the last 1 year -- last year FY '23. These are the details of our financial performance. In Q4, the total income from operations was INR 12,254 crores. For complete year, it was INR 45,815 crores. EBITDA margin was 10,358 crores and for complete year, it was INR 40,045 crores. Profit after tax, INR 4,128 crores and INR 15,475 consol basis. Also, it is slightly better than last year, almost 1% higher than last year. If we see our overall financial performance, as I told that on a consol basis, we have INR 2,75,991 crores fixed asset or gross block, and we achieved about INR 12,500 crores CapEx, which was more than 4%. So this year, we will -- we are targeting to be more about 6% to 7%. Work in progress, we have INR 19,468 crore projects in progress. Long-term debts have decreased from last year. It was earlier INR 1,25,000 crores. Now it is INR 1,20,000 crores. Earning per network is INR 87,000 from INR 83,000. Earnings per share, INR 16.74. Then book value per share, INR 93.70. Debt equity has improved from INR 6,139 to INR 5, 941 and return on net worth is INR 17.87. Other key financial parameters income for previous periods, consol basis, INR 826 crores, interest on differential tariff INR 966 crores, interest from subsidiaries and JVs, INR 1,459, surcharge INR 146, incentive INR 573. Dividends from JVs dividend from subsidiaries, INR 891; dividend from associates, the companies which we have given to PG InvIT about INR 79 crores, CSR expenses, INR 312 crores, FERV INR 191 crores, equity in TBCB operation, we have about INR 3,809 crores equity in TBCB. Under construction, INR 598 crores short-term loan, about INR 2,694 crores. If we talk of dividend, so next -- yes. This year, happy to announce that this year, financial year '23, '24. We are the highest dividend payer company in the history of Power Grid, which is INR 15,463 crores as compared to -- sorry, INR 10,463 crores as compared to INR 10,289 crores last year. Last year, it was 67% of PAT. And this year, it is about 68% of PAT. In terms of dividend per share, in September '23, we have given bonus share, 1 share in -- for every 3 shares. If we consider that, last year, we gave a dividend of INR 14.75 per share. This year, we have -- if we don't consider the dividend [indiscernible] on a share, then it will be INR 15 per share. If we consider 1 share, then this year, it is 11.25%. Last year, it was somewhere about INR 10. 11 or something like that. So it is better than last year if we consider 1:1. Next. As I told in the starting that in last 4 years, our market cap, Power Grid market cap, your market -- your company market cap has increased by 210%. On 17 November 2016, we were -- market cap was about INR 1 lakh crore. On December 5, 2023, it crossed INR 2 crores and within almost 5.5 months on 21st -- 20th May, we achieved more than INR 3 lakh crores. So future is bright. Company is in safe hand. And we are committed to achieve many more milestones in future. Share price, which Power Grid share has achieved is about INR 328 crores on 22 May. In consultancy, we have -- last year, we have earned about INR 553 crores. We have 9 international assignments, new 19 ongoing international assignments, 21 new domestic assignments and 79 ongoing domestic assignments. We have international assignments from Denisco, Tanzania, Zambia transmission line in Africa. Then Fiji, we have transmission line construction work than UE TCL in Uganda, then Nepal Gorakhpur Butwal, we are executing that transmission line for international cross-border interconnection. The telecom performance also has improved from INR 720 crores to INR 822 crores in FY '23, '24. 121 new customers have been added, INR 870 crore multiple year orders have been received 3,000 locations, pan-India locations. We have our telecom network is spread across the country. We have about 1,000 circuit kilometer -- 1,000 kilometer of OPGW network and our backbone availability is 100%. Business segments, lease lines, MPLS, VPN, data services, infrastructure services, upcoming services like ILD connectivity with neighboring countries like Nepal, Bhutan, Bangladesh and Myanmar. In terms of commercial performance, we have built about INR 42,793 crores last year. We have achieved INR 42,820 crores have been realized, which is 100.06% of realization -- of total. Next. If we look at sectoral outlook energy transition is to happen. We are committed -- Power Grid is committed to participate and contribute for energy transition, which is the vision of country, vision of the world. In this direction, India to be a $5 trillion economy by 2030. So a lot of growth is expected. So if growth is there, transmission sector has to grow. Without electricity, growth is not possible. So if the GDP growth is 6%, so it has to be -- the electricity growth has to be more than what GDP growth will be there. Then 50% non fossil fuel capacity by 2030, 500 gigawatt is to be installed by 2030 than government has announced green hydrogen mission, for that also about 125 gigawatt power requirement will be there for producing green hydrogen local conception and for export. We have intermittent renewable power. So for grid stability and for reliability of our network, energy storage is required in terms of pump storage or battery storage. So Power Grid will play a role in connecting these battery storage system and pump hydro stations. And international connection, if sun energy has to be utilized by all countries of the world, 1 sun, 1 world, 1 grid mission of Government of India and international commitment. We had to have international interconnection like India to Singapore, India to Oman, India to UAE and other countries. Similarly, there will be interconnection from Middle East to Africa, Africa to Europe and many interconnections between Europe and countries so that the concept of 1 sun, 1 word, 1 grid can be achieved. So that means many more projects are in pipeline for which also Power Grid is getting ready, and we are hopeful that we will also contribute for 1 sun, 1 world, 1 grid. In this concept, the power generated maybe in Maine mark, Thailand and other countries in East can be transmitted to Europe. And once sun is there in Europe, that power can come to various other part of the countries, various other countries. So 1 sun, 1 word, we are committed, and we are seeing the potential in this aspect also. We see Power Grid how it looks like by another 7, 8 years. We have mainly outlook in transmission business. Intrastate, we see it is on conservative side. I will say 136,000 or 136,000 is on conservative side. We are hopeful that it will be much more than 136,000, but even if we consider 136,000. The intra-state transmission system, about INR 37,000 crores. Cross-border like dairy countries, about INR 10,000 crores international projects like we have won in Kenya, which is getting matured now. We have got the in-principle approval and final details are being worked out and work will start shortly. The subtotal of transmission system will be about INR 1 lakh 90,500 crores. If we consider other businesses of Powergate, solar generation, smart metering, data center. So put together, this is about INR 2 lakh 7,000 crores by 2032. I will say it is on the conservative side. We are expecting that this to increase. Work in hand as on today, and I told that Work in progress was 19,000. Apart from that, we have work in hand about INR 86,000 crores, INR 700 crores and more than 80% towards renewable energy evacuation out of which we have INR 11,200 crores RTM projects, INR 24,700 crores new RTM project, about INR 50,000 crores, other projects. These are RE linked projects. This year, I told that we have -- as per our MOU target with government of -- we have 15,000, but actually, it will be about $2 billion. or even more than that towards sustainability aspirations. We are committed to reduce our electricity consumption from fossil fuel by 2025 that more than 50% power will be through renewable for our ordinary consumption and other requirements. We are committed for net water positive organization by 2030, then 0 waste to landfill status by 2030, net-zero by 2040. These are some of the awards, as I told that Platts Global Energy Award, International CSR, ATT Best Award 2024, Brand Hall Group Human Capital Management Award, East Coast Gold Award and many more awards are expected in future. Our papers, our contributions have been -- given ours, they have been recognized by ISG Innovation Awards 2024. In the smart technology, energy transition and gold award adoption of artificial intelligence, machine learning, and robotics for our transmission line for human capital excellence certificate of excellence in learning and development at HR excellence of ours. Thank you very much. Thank you for your patience in hearing. Thank you.
Thank you, sir. That was a really comprehensive and very, very enriching presentation. I now open the floor for questions and answers. [Operator Instructions]. Yes, gentlemen.
Sir, I'm Sumit Kishore from Axis Capital. My compliments on a year where you have garnered almost 65% share of the -- without TBCB projects? My first question on TBCB that could you outline how the EBITDA and profit contribution of your TBCB portfolio has moved from FY '23 to FY '24 given now the equity base of operational TBC projects has increased slightly. That's my first question. If you could also -- in relation to TBCB, touch upon the fact that cap to EBITDA ratios or CapEx to annuity ratios rather that you have been winning in TBCB over the past few years have shown a deteriorating trend as in the annuity that you earn for the CapEx for a TBCB project has reduced, if I look at the trend over the last 5, 6 years. How do you read that as implications for the IRR that you would make for the TBCB projects? That's my first question here.
For TBCB projects, when we bid for any project, we are very particular about IRR, and we maintained that by ensuring our timely completion cost overrun and financial cost is not there. And we try to maintain about 10% to 12%. So it is -- we ensure that. Regarding your EBITDA related question, I will request director finance to kindly intervene and reply.
The EBITDA margin will be almost equivalent to the RTM. It will be something like 85%, 87% and that range will be there because the IRR like if we say like 10% to 12%, if you say if we maintain -- and there are some projects as a package, if you see all the -- like we have 47 TBCB's mostly in [indiscernible] everything gets completed as a package, if you see the EBITDA will be a decent one.
Sure. So if you look at the total consolidated profit, the question was, what is the total consolidated EBITDA and profit of TBCB subs from FY '23 to '24.
No. As such, we have not worked out separately for this thing. But if you see a stand-alone to console, it's on the higher side. So naturally, it means difference between stand-alone and consolidation is only the -- when you see this quarter 4 to quarter 4 and if you see 84% EBITDA, if you see stand-alone and if it's 87.2%, 87.3%, the consolidated basis means the EBITDA in the TBCB's are not allowing.
Sure. Only the thing is that the total profit of subsidiaries, as mentioned in your BSE filing, subsidiaries. The profit that is mentioned has come down on a year-on-year basis versus the last year, the number of subsidiaries and the profit mentioned there. So I was trying to understand what is driving the reduction in subsidiary profit.
No, no. You mean to say profit per subsidiary?
Not profit per subsidiary, but the total profit of subsidiaries that you had mentioned in your FY '23 BSE filing, for some 37, 38 subs versus 43 subs right now, was a higher number last year as compared to this.
Last time, actually, we had 1 Nagapatnum transmission system, which was the first which acquired in 2011, and we were actually filing the petition for a change in Leh for which we got an income of INR 200 crores for all the years together. So that was a one-off item, which we got in the last year. That's why probably if you compare exactly, so it may be like that. Otherwise, if you see -- if you remove that one-off item, as such, I don't think in this availability transmission tariff process, there is no chance of us turbulence.
Just a bookkeeping question. The capitalization that you mentioned for FY '24 on a full year basis, there was a strict mark there and mentioned that there were assets capitalized on finance lease basis that were included there.
That is interest rate.
Yes. That is how much is the finance lease on the asset capitalization on finance lease basis?
I think it is something like INR 1500 crores to INR 1600 crores.
Because when we subtract the net block for FY '24, minus FY '23 and add back the consolidated depreciation, we got a number below INR 60 billion. So maybe that INR 1,500, INR 1,600 crores is expanding.
You may be getting a figure [indiscernible].
That's why we -- we thought that the numbers were.
This is Subhadip here from Nuvama Institutional Equities. Firstly, thank you for such a detailed presentation. My first question is with regard to the interest rate model that you mentioned right, where the MOUs are getting signed and the JVs are getting signed. What quantum -- I remember, I think in your slide, you were mentioning about INR 37,000 crores of potential by FY '32, but would you see this to be more front-ended or back-ended winning these projects and execution, et cetera.
Can you repeat what is for attended and...
No. What I mean by that is, would this come up in the next couple of years? Or would this be for a longer period of time?
Yes. Okay. So the model with Rajasthan is we are going to have about 10,000 worth transmission projects in next 3 to 4 years. And they have about INR 2,000 crores projects, especially from their solar generation. In next 2 to 3 months, they want to give to us about INR 1,500 crores to INR 2,000 crores. So from 2 to 3 months to next 3 to 4 years, these INR 10,000 crore projects are to be executed or started to be executed and subsequently, many more projects as per them are in pipeline. And models that 76-24, that means 76% equity will be done by Power Grid and -- sorry, 26% by them and 74% by Power Grid. Similarly, for Andra also, they are also targeting INR 10,000 crores because if you see interstate transmission system is coming in a big way. In case interstate transmission system is there and intrastate transmission system is not there. Then this power cannot go smoothly to load centers or to the consumer. We require intrastate transmission system. So they cannot wait. Now it is to be done on an immediate basis. So that is why we are getting requests from Orissa. We are getting requests from Mandra. We are getting a request from Assam and UP for setting up JV companies with them.
And these would be on regulated ROE basis or...
It will be unregulated, but it will be on state level regulation. It will not be through CRC, it will be through SCRC.
Through the SCRC. Okay. And the voltage level at which these lines would come up, would be what around 400 kV or 220 kV.
There will be some 400 kV also, even people are talking about 765 kV. But mostly, I will say it will be at 132 kV and 220 kV. There will be some at 400 kV level and 765 kV.
So bulk of it is 132 kV and 220 kV.
132 kV and 220 kV.
Understood. Sir, second question is with regard to your dividend payout. We've been seeing very healthy dividend payouts, given that you were surplus on cash. But as you move towards an annual CapEx, which is probably between INR 25,000 crores to INR 30,000 crores, would you see the dividend payout also probably coming off a little bit because you will have pressure on cash?
No, not really. Like if we see the profit this year, it is INR 15,475 crores. And what I was taking that CapEx, it will be about INR 17,000 crores to INR 20,000 crores, even if we consider INR 20,000 crores. So we require only INR 4,000 crores, INR 20,000 into 20, so INR 4,000 crores. So out of, say, INR 15,475 even if we take out 4,000, it still we have more than what we have paid dividend this year. So we don't see any reduction in dividend in the near future. And whatever additional CapEx will be required. So we expect that more and more projects are to be -- will be commissioned, and we will have more profit to take that CapEx requirement.
And roughly 20% equity contributions what you're looking at.
Yes. Normally, in TPC projects, we are maintaining about 20% equity.
Sir, my final question on a booking keeping basis, can you also help us with what is the regulated equity number that we have assumed.
Regulated equity?
Yes, on which we earn the regulated ROEs for the regulated part of the business.
You see we have like INR 86,000 crores we were showing in console. And then we have showed the equity as like INR 3,500 as the amount we have put it in TBCB [indiscernible] deduct that and then it will be there.
So this INR 86,000 crores is the consolidated?
Consolidated.
Is there something that is also sitting in cash, work in progress, et cetera. So the amount that is actually earning...
Not much that's rolling, I don't think we don't have much idle cash or something like that. And 1 small correction in that PPT, like it's not 76-24, it is 74-26 RVP. Just there is a typo.
I'm Atul Tiwari from Citi Research. Sir, just one question on one of the slides where you showed outlook till 2032. So about INR 2 lakh crores worth of potential CapEx in the sector. So fair to assume that this is FY '25 to FY '32, right? And given that now there is a lot of talk about new uses of energy from the data center, which India is beginning to see in a big way. I mean, can you share your thought process on what government or the CAs thinking about kind of revising this number, is there a chance that this number over the next 3, 4, 5 years gets revised up? And if it happens, what that number could be?
As I told -- a very good question. As I told that these are very conservative figures, and we are expecting numbers to increase. As per the requirements, especially for green hydrogen data center and other requirements, maybe EV vehicles. So requirement is going to increase. So we are expecting these numbers to be increased. Apart from this, we are -- as per the gold and -- yes, that report that say that up to 2050 for energy transition, $1.68 trillion are to be spent only in transmission system. So $1.68 trillion. That means maybe around INR 135 lakh crores to INR 140 lakh crores are to be spent by 2050 for energy transition and for transmission system. So that number will be much higher than what we are projecting now. So we see a better future as compared to what we have shown.
And sir, my second question is on the smart metering initiative that you were involved and what is the status of that? How much money has been spent? Or is it going slow?
Yes. We have already awarded about 69 lakh meters for Gujarat, Madhya Gujarat and Uttar Gujarat and about 30,000 meters have been installed. So because this metering system prepaid, but now -- earlier days, it was postpaid basis. Now it is on a prepaid basis. So there will be some teething problems. So we are facing some teething problems, which will be -- which are being taken care, especially in software. And very shortly, this will be taken care and our progress will improve. So yes, so far, we have been going slow comparatively, what we expected earlier.
Any idea of how much money has been spent on that? Or is that not a big number yet.
Not a big one.
Sir, a quick guidance. We have 5 more minutes, and I think we'll have to wrap up very quickly. So last 2 questions, if possible.
For the first few years, the TBCB projects that Power Grid had won, we had seen a annuity schedule where for the first 5 years, there was a higher number, and then it fell to a lower number remain like that. So given that 4, 5 years have now passed a few initial portfolio assets got transferred to the InvIT, so they are not in convention. But for the others, the 5-year period may be coming to a close. So does the EBITDA actually for those projects as it comes to the new and with reduced annuity base? Will that have an impact on the EBITDA earned for the gross block.
No. But actually, if you see we have like 47 now, 2 more to acquire, 49. The TBCB may be indicating maybe like after the -- if you take out this 5, which we have given it for it InvIT, maybe some 7, 8 will be there. On an overall basis, if you see their contribution will be very less. And it doesn't -- and also like there is a method of quoting year on the year that there cannot be much variations like they have a limit like some -- like can be only were between year-to-year. And I don't see any much big drop because of that. So the weightage of that will be hardly seen.
One suggestion is that in your presentation, if you can put a consolidated P&L for TBCB subsidiaries. It will be really helpful for us.
That is the only thing we have given to you.
That will be really helpful.
One last question over there.
[indiscernible] from Jefferies. Sir, I just want to understand, what does big pipeline look like at the moment? And also if you can exclude the 3 HVDC projects in that and comment a little bit on the status of those HVDC projects as well, please?
As you know, that almost INR 1 lakh crore projects are already under bidding and another INR 28,000 crore to INR 30,000 crore projects in near future, they will be ready for bidding. So maybe about 1 lakh 30,000 in the near future -- including the near future, yes.
And the INR 1 lakh crore includes all the 3 HVDC projects.
Yes.
And what's the status of the first 1 that was supposed to be bid out, I think, last year, and it's getting delayed. Any comments on that?
Yes, OBD was already done on 7 May. Now very shortly, maybe next week or so, the reverse auction may be there, it maybe should do. So very shortly, it is going to be finalized.
I now invite Mr. Satyaprakash Dash to deliver the vote of thanks.
Thank you. We express our sincere thanks to all the esteemed investors for coming here and attending this conference. We also express our sincere thanks to Chairman and other directors for sharing the business outlook and performance of the Power Grid. Thank you, everybody. Thank you.