Thank you, Ananya. Good afternoon to all.

On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings call of Nava Limited. Today, we have with us from the management Mr.

Ashwin Devineni, Managing Director and CEO; Mr. GRK Prasad, Executive Director; Mr.

Nikhil Devineni, Executive Director; Mr. B.

Sreenivasa Rao, CFO; and Mr. VSN Raju, Company Secretary.

We will begin with the opening remarks from the management, which will be followed by a Q&A. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining us.

I am pleased to share Nava's performance for the first quarter of FY27. We have started the year on a strong note, with consolidated total income reaching an all-time quarterly high of ₹1,269 crore.

The quarter reflects the strength of our diversified portfolio and the benefits of disciplined cost management. Our energy and mining business delivered healthy operating performance, with MCL's 300 megawatt plant operating at a strong 89.3% PLF.

Our international foray also continued to provide value through dividend flows and to retain financial strength to pursue investments. At the standalone level, the total income reached a record ₹689 crore.

Lower coal and manufacturing costs, along with dividend income from Nava Global, supported this improvement. We continue to make measured progress on our next phase of growth in the energy and commercial agriculture segments.

Our thermal energy, renewable energy, avocado, and sugar projects in Zambia are in active implementation, and some are set to yield revenue shortly. Phase two of MCL is expected to commence operations next year, later than originally envisaged, owing to certain challenges beyond our control, with no material impact on project CapEx.

It is, however, heartening that the 100 megawatt solar power project, set to be commissioned shortly, would establish a new niche for Nava, prompting further investments in this space. We are cognizant of the significant challenges arising from the geopolitical and supply chain disruptions, and are taking appropriate remedial actions.

Our diversified portfolio, financial strength, and operational resilience should, however, position us well to navigate these challenges while remaining focused on long-term value creation. With that, I open the call for

political party. We've been through many political parties' changes since we've started, yeah, we are not affected.

That's nice. Thanks for that, sir.

Good afternoon, sir. Sir, my question is because there was some problem in connection, I could not hear your last 5 minutes' speech.

I just wanted to know what is the expected date of commissioning of this 300 megawatt thermal, because earlier it was Mr.

I am speaking, madam. Can you hear me?

Hello? Hello?

Are you able to hear me? Hello?

Hello, first of all, may I know if I am audible? I've got disconnected several times.

I did not hear anything from the other side. My first question is regarding the company's assets, how they are taken into the books.

We have 65 acres of land in Hyderabad. We have some 200 acres in Samalkot, and another 20 acres in [Khammam?]

, I believe, or maybe the other way around. How are these assets taken in the books?

Mr. Vijay, can you hear us?

Now, I can hear you. I don't know, this conference call has been jinxed.

I've tried three or four times to get into it.

You can hear us now, right? Did you hear the prior questions

and answers? Now I can hear you very clearly.

Can I ask my question again or you heard it?

No, no, no. No, we just wanted to make sure we are audible.

With regard to your question, and all this land is recorded in the books at a historical cost.

You have got these real estate assets, the land assets, the land bank, recorded at historical price. What is the reason why they are not being revalued and taken at current value, current market price, or at least the current realistic cost?

Because that will change your book value considerably, the book value per share, because

the book value per share is

the book value per share is very much depressed.

Yeah. The accounting standard allows us to carry at the historical cost, that is why we are carrying at historical cost.

I see. What are the management's plans to make these assets work to the benefit of the company and the shareholders?

I think we've been holding these assets for a while, and I think the fruits of that are kind of showing with valuations really going up. It's good that we did not sell these assets at an earlier stage, otherwise we wouldn't be realizing the greater valuations.

What we have done is just to understand what opportunities we have today, we have engaged a third party to study, investigate, with the current asset values, what are the possible options that are available for us in the event we want to do anything today. That study is currently ongoing.

We've been hearing this for quite some time, but we have to make these assets work towards company's plans. For example, company has recently changed its memorandum of association and brought in lot of additional avenues for power generation, such as solar, wind, nuclear, etc.

With these, you will need capital, and that capital can come only from these assets, rather than borrow.

Yes, I don't think we have an issue in terms of capital right now. All the projects that we are envisaging and that are currently underway are adequately funded, and we have enough equity and cash in our books to fund that.

We don't need to sell the assets in distress or to basically generate cash at this point. As a company, we feel that and I think it has paid off that we have held on to these assets.

Yes, we have been saying that, but for example, if we had sold these assets years ago when we were being questioned about the assets, I don't think we would have realized the appreciation that the assets have in terms of how they've gone up.

Very true, Mr. Ashwin, but if you had invested that asset value at that time into newer projects, that newer projects would have also generated additional profits.

Once again, Mr. Vijay, I'd like to state that it's not a situation where we are not undertaking projects because we don't have cash.

Whatever projects we deem fit, where we look at the risk and so on and that we want to undertake, we have adequate cash to fund those projects.

Thank you. My next question is about the holding of Zambia assets.

Initially, Zambia project was created out of Nava Limited profits, Nava Limited funds. Subsequently, Nava Global seems to have taken over these assets and they are now being shown as profits accruing to Nava Global, and Nava Global giving dividend or buying back its own shares from Nava Limited with that money, etc.

Who is the ultimate owner of the Zambia project, number one? Number two, is there any plan for spinning it off the way the foreign projects are going, and spinning it off or demerging it and going in for an IPO?

First and foremost, with regards to the large asset, and I'm sure you're talking about the Maamba asset, it was always under Nava Global. The only difference was Nava Global was called Nava Bharat Singapore in the past.

It was not like it started with Nava and then we moved it to Nava Global or anything of that sort. We always had Nava Global as the international asset holding company that we wanted to grow.

Today, Nava Global has multiple assets. It's got the current Maamba power plant, it's got Maamba Solar Energy as a company, and we have got the mine in the Ivory Coast, and there may be other international assets that could fall under it.

It does operate independently. The ultimate owner, yes, is Nava because it owns 100% of Nava Global.

You are telling me that Nava Limited is a 100% ultimate owner, beneficial owner of Nava Global.

Yes, that's right.

I'll go back in the queue. Provided, I'll remain on the line because I got disconnected several times.

Thank you for the opportunity, sir. My first question is regarding the Zambia.

How is the situation in Zambia currently? Due to West Asia crisis, do we have any power reception in Zambia?

Sorry, can you repeat the question? I think and a little slowly.

Am I audible? Hello?

Yes, yes. Just go a little slow.

Yes, my first question is regarding the Zambia currently, how is the situation is there right now? Due to West Asia crisis, are we facing any power receptions?

Do we have any power receptions? Disruptions,

yeah. Oh no, yeah, the situation is fine.

Currently, there are no power disruptions there.

My second question is, due to West Asia crisis, are we anticipating any increase in the supply of coal in Zambia?

In supply of coal in Zambia? Sorry, can you repeat the question?

One more question I had was the deferred tax expense that you have shown in the books. Is there any scope of stabilizing it or will the 160, 200 crore per year mark will be always there as deferred tax expense?

You are talking about at console level?

On the console level, I'm talking about. Last year, it was 261 crores, and this quarter you have again shown 40 Cr.

The last quarter, it was 163 crores because of that Zambian and USD currency problem. What is the situation over there?

Now,

the Zambian Kwacha, USD exchange rate is around 18 rupees as on 30th June. It is stabilizing as on today.

You never know what happens in the future, it depends upon the prevailing exchange rate as on the date of report.

If the currency stabilizes, then this 40 crore the next quarter it'll not be there, right?

Yes, it may get even reversed also.

It can get reversed. Okay.

Make sense. Moreover, like the previous question about the assets that you have, if I may know what is the current value of those assets?

What assets are you referring to?

The Hyderabad assets, the 200 acres that you have.

historical cost of Nacharam land is around 40 lakhs in our books of account.

What will be the current value approx?

I think that's something that the report that we have commissioned to the third party that I've mentioned will possibly bring out. The value is moving, I think every call it's moving, fortunately, upwards too.

It's appreciated a lot from, I think, the past few years.

If we can get an idea, then it'll be great for shareholders. Around

Yes, but I don't think we would want to speculate on giving a number because this is real estate at the end of the day.

Yeah. No issues,

no issues.

Moreover, the mining that you were taking on the exploration part, what is the status on that?

There are two parts to it. I think you may be referring to the manganese mining or exploration?

Manganese and the lithium mining that you were exploring.

Yeah. In terms of the lithium, it's very large area, the exploration is currently underway.

There's been a slight slowdown because of the elections and so on, but the exploration is still underway. On the manganese too, it is a fairly large area.

You're talking about 360 square kilometers, which is part of the concession. Out of this, we have done detailed exploration in only 2 square kilometers.

Based on those results, I think the prima facie indications are that it does look promising. We are currently working on converting the exploration license into an exploitation one.

By when can we expect that if it's

fine.

Good afternoon, sir. Sir, my question because I was initially not participating in the discussion because my line was disconnected for 5 minutes, I couldn't hear your speech.

I just wanted to know what is the expected date of commissioning of this 300 megawatt thermal power plant, because earlier it was, I think, planned for Jan '27. What is now the expected date of commissioning of this plant?

Hello?

Right now, we're looking at the total commissioning of both the units by Q2 of FY27-28, around the July timeframe of next year.

Sir. My one question was that whether any planned shutdown in the current quarter for Maamba plant, sir?

Current quarter. We have a bi-annual shutdown that is scheduled in the current quarter.

In the current quarter. Okay.

Which is a bi-annual maintenance basically. It's the regular bi-annual maintenance that we conduct.

Ha,

yes. That's fine, no sir.

Okay. Thank you, sir.

Yeah. My question is regarding the return on equity on the additional 300 megawatt that you have set up.

What would be the taxation as far as the 300 megawatt is going to be?

Give us a second, please.

Am I audible?

My question was because the cost entailed in this next 300 megawatt is much lesser than the earlier plant and even the PPA is also signed, what is the expected return on equity on the investment, and what is the taxation that will be applicable on this?

Give us a second, please. The return on equity that we envisaged is about 15%, and with regards to the second phase, we currently don't have a tax holiday, but that is something that we are actively pursuing with the government.

Thanks.

Hi sir, am I audible?

Yes.

Thank you for open opportunity, sir. My first question is, sir, can you please explain what is the reason behind Zambia energy EBITDA margin being declined over the years?

What is the sustainable margin going forward for the Zambian energy?

The reason for decrease in EBITDA is on account of less reversals of ECL credits.

Okay. What is the sustainable margin going forward, sir, for the Zambian energy segment?

Around 45% to 50% is the EBITDA.

45%

to 50%. Yeah.

Okay. My second question is, sir, how do the inter-segment eliminations work?

Is there any ratio which we can use to estimate the consolidated EBITDA from segment EBITDA? Because there is a lot of inter-segment eliminations.

We adopt some transfer pricing between power and metal sector in Indian operations and also for coal consumed in energy from mines. This gets eliminated, the transfer price adopted for transfer gets eliminated, and when it comes to consolidated EBITDA, it will be around between 35% to 40%.

The segments EBITDA 35% to 40% will be considered for the consolidated EBITDA.

At console level, yes.

Okay. One last question, sir.

How is the interest cost being calculated? Because are we capitalizing it during the construction time?

What is the industry practice? Because there is no big increase in the finance cost despite of having a higher loan.

The finance cost incurred on phase two gets capitalized.

Okay. Is this a industry practice?

It is required by IFRS and Ind AS as well.

Sir. Thank you.

I'll get back to the queue.

Sorry. I might have missed some of your initial comments or initial answers because I was disconnected.

The recent amendment which is made to the company's memorandum, the new clause about power generation which are introduced with new avenues of nuclear and solar, etc., could you enlighten the shareholders about what are the company's plans for expanding its power generation operations in India in this particular fields?

I think Are you talking particularly with respect to India? Because I'm going to be talking in general with India and internationally.

We, as a company, are looking seriously at the renewables space. Not just solar.

We're looking at solar, we're looking at wind, we're looking a combination of both of them with battery storage, you have round-the-clock power. There are certain opportunities that we are currently investigating and assessing.

With regards to nuclear, I think the whole concept of the small modular reactor, which we term as SMRs now, seems to be gaining a lot of traction, and given that we are in the power space, we have been also looking at that sector in terms of developments. I think the SMR space is very new, and it will take a little more time to evolve, but we are actively looking at all the developments that are taking place there.

All these activities are going to be international and not in India?

No, I don't think we're saying they will be international and not in India. We're looking at it in all geographies, including India.

I think, Mr. Vijay, we are quite location agnostic.

I think what we do look for is where the best returns for the risk that you're going to be taking come from. That could be very well in India or elsewhere.

I'm sorry if I have misrepresented, but what I meant was for a long time we have not expanded any of our Indian operations. That's why I asked, because in India today there is a lot of scope for this particular activities.

Yes, so, like we said, we look at returns and we look at the risk. In the renewable space, although there's been a lot of expansion in India, sometimes it's been a hit or a miss given the tariffs and the grid situation.

We look at the geographies without being partial to India or international. We're looking at the best returns and risk, and that's really played out well for us.

If you look at Zambia today, it's generating good revenue and good profits, and helping the growth of our company in various verticals.

Yes, I agree with you. The Zambia operation has been a runaway success.

Coming to the Ivory Coast operation, when we are looking for manganese there, you had also stated that you are likely to put up a manganese alloy plant there. Is there any progress on that?

I think with respect to the mine, we have disclosed that the exploration results have yielded promising returns, we are in process of converting that into exploitation. This particular mine that we have worked on is exclusively targeting the Indian operations.

In order to set up a factory in Ivory Coast, there is another mine which is right now controlled by the government, for which we are looking to be JV partners. That's still under the approval phase, but once that does come through, then we could evaluate setting it up there.

Thank you for the now. I will go back in the queue if there is still time.

Sir, does the reported OCF of Nava Limited include 100% of Zambian cash flows or is it adjusted as per Nava's 65% share?

100%, 100% consolidation.

Sorry, sir?

There is 100% consolidation.

Okay. One last question is sir, the metals business is struggling in terms of margin.

What is the outlook going forward for margins and sales growth going forward?

See, I think the metals business, as it's volume driven rather than margin driven.

Okay.

Quarter-on-quarter basis, we have seen actually a slight improvement in terms of pricing on the spot market to the extent of about 5% to 10%. Going forward, we are quite well ring-fenced against any volatilities because almost 70% of our production is already committed either under long-term contracts or on quarterly contract.

I think if to answer your question with respect to margins, we could probably either see a stability in terms of where we are today or, if not, a slight increase. I don't see a downward trend at least until the end of the financial [unclear].

Okay. What about the sales, sir?

It is stagnant from last few years. That's the reason I'm asking.

Your question was not clear. Can you please come again?

Sir, I'm talking about the sales growth. What is the expected sales growth?

Hello?

I think this particular quarter, as we disclosed, the Odisha unit was under shutdown for long-term maintenance activities. That's the reason the sales numbers have slightly decreased.

Anyhow, that is behind us now. We have resumed operations from Odisha as well on 1st of August.

Sir. Thank you.

Thank you once again for joining us today and for your continued interest in Nava. We believe the resilience of our core businesses and the progress of our growth platforms position us well for sustainable long-term value creation.

If you have any further questions or require additional information, please feel free to reach out to our investor relations team. Thank you, and have a pleasant evening.