Thank you, and a very good day to everyone. I welcome you all to the Q2 and H1 FY27 earnings call of AESL.

We hope you had an opportunity to review the earnings presentation and financial results that we shared on our website. To outline the flow of today's call, we will begin with the opening remarks from our CEO, Mr.

Kandarp Patel, following which we will open the floor for Q&A. The call will conclude with closing remarks from CFO Mr.

Ashok Jagetia. For those who wish to ask the questions, we request you to start joining the question queue a little in advance to help us manage the Q&A efficiently.

Thank you, and with that I would like to hand over to Mr. Kandarp Patel for his opening remarks.

Sir, over to you.

Hello, good morning, everyone. Thank you for joining Q2 FY27 call today.

This quarter marks another important milestone for AESL evolution. Our performance in this quarter demonstrate that AESL is now becoming mature India's leading integrated infrastructure platform and utility.

It is supported by all our four business, which is in a growth mode, that's a transmission, distribution, smart metering, and energy solution. Our focus obviously remains on a building long-duration utility assets.

Currently we have asset base of about ₹83,000 crore, and we have already locked-in capex of more than ₹1 lakh crore, and that we will be delivering in another 4 to 5 years. Asset will grow almost 1.3, 1.4 times from what we have today in next 5 years.

In fact, since we have been focusing continuously on capex delivery on the ground, and we see now results coming up, the capex in this first half of the year is the all-time high. We have deployed about ₹7,850 crore of capex among all our businesses.

As far as transmission is concerned, during this quarter, we added another two projects. One is at Vizag, Pendurthi, and second one is Satara.

With these two projects, our order book remains at about ₹87,000 crore. As we said earlier, we have been focusing on those critical transmission assets where large renewable and consumption that we are integrating.

These two project obviously is very, very important. Satara is important for development of PSP projects, and Pendurthi is for data centers that is coming up in Vizag region.

We will continue to focus on those large and critical projects like HVDC and this kind of a project where we are enabling renewable integration into the grid, and also enabling rapid consumption in our economy. As far as distribution is concerned, both at AEML and MUL, we have been continue to deliver exceptional operational performance.

Our distribution losses in Mumbai has reduced further to 4.29% in the first half. This despite the fact that consumption has also increased by more than 10%.

We also continue to focus on reliability, customer service, and operational excellence as far as distribution is concerned. Smart metering, we have now delivered about 14.8 million meters so far, and around 60% of our order book that we have delivered, and balance portion we wish to complete in another 12 to 14 month time.

As far as C&I and energy solution platform is concerned, we are steadily transitioning from incubation to scale now. During this quarter, the platform delivered revenue of over ₹2,000 crore and EBITDA of over ₹800 crore.

We already have a tie-up of 4 GW of renewable and 3.5 GW of base capacity. While we are tying up on a supply side, we have also now started tie up on a consumer side.

We executed that 2,500 MW RE-RTC contract with MSEDCL, and we also expect to further scale up on both sides, on a supply as well as consumer side, significantly in going forward. Financially as well, we deliver another strong quarter with the total income growing over 50%, EBITDA also increasing close to 67%, and PAT growing 145%.

As we made commitment and we continue to focus on governance and ESG part, we are happy to say that now in S&P Global electric utility category, we are number one globally, getting 90 out of 100 rank, whereas industry average is about 40. We will continue to focus on those aspect going forward as well.

On our funding and balance sheet side, significant portion of our debt is also fixed rate or hedged appropriately. We don't expect much of the volatility due to foreign exchange or interest rate variation in our P&L or balance sheet.

Overall, in all segments, be it transmission, distribution, smart metering, or C&I, we see a great opportunities going forward. Those opportunity pipeline remains robust, and we are well positioned to take advantage of the opportunity available to us in all the segments.

We will continue to focus on, besides ESG, as I said, on capex delivery. This is in a nutshell, and I hope you must have received all the details and material on our financials.

I thank all of you, and now we will be happy to take questions from all friends. Thank you.

Good morning, and congratulations on a strong quarter and first half. I did have a couple of questions.

Maybe to kick it off on IntelliSmart, when should we expect that transaction to close?

Thank you, Manish bhai, for your question. IntelliSmart, the approval from CCI is pending, and we expect this approval very soon.

In fact, we had a couple of meetings with them, and they wanted various information on transactions as well as on the market. We have provided all those information.

We also had approval from all the utilities where IntelliSmart has concessions, we also are required to take their approval. We have secured all those approvals, and we expect the CCI approval very soon.

Once we have that CCI approval, we will complete that transaction immediately. We expect that to happen in next one month's time.

That's super helpful. Then on the legacy smart meter business, you had installations of about 1.3 million in the second quarter.

It did show that the quarter was a little bit of a slower deployment. Maybe if you can just help us understand how we should think about the second half deployment, and perhaps what's really happening on the ground that might potentially speed up the deployment in the second half?

Yes, obviously the deployment on the first half was lower than even our expectation, and those reasons were mainly extraneous, but we are working on those. Those reasons are obviously resistance from people for a smart meter where we have now ramped up our campaign to educate those customers.

The second one was that few of the distribution companies wanted to focus on a specific type of smart meter installation. Point in case was that Maharashtra was expecting us to install mainly HT consumer meters, and once you target a very specific consumer, obviously your speed will reduce because you won't be able to capture that entire geography.

They were wanting to do it for a right reason because they wanted to complete that energy accounting at least for real-time energy accounting for HT consumer. We also supported them, but now that they have asked us to deploy all and every meter which is pending, we expect that speed will increase significantly.

Similarly in Bihar, they wanted us to do the tagging of all the customers before we install that meter. We also have completed those activity now in Bihar and Maharashtra where the pace was slow.

We expect that to increase significantly.

Okay. Then just lastly on transmission, if I can just add one more question.

I think you said that the second half capitalization should be much better than the first half, and perhaps if you can just help us understand the two or three projects that might really bump up the second half versus the first half? Thank you so much.

If you see the track record or the past few years' performance, the capex performance obviously is little lesser in first two quarter as compared to second two quarter, and mainly because of the weather conditions. Lot of transmission capex get hindered in monsoon and summer.

We expect to do total capex of transmission in the range of about ₹14,000 crore. We will be doing about ₹8,000 to ₹9,000 crore of capex in the second half.

We are fully lined up for that. All the contracts has been awarded, teams has been mobilized, contractor has been mobilized, and you will see lot of execution activity on the ground scaling up in the second half.

Super helpful. I'm going to get back in the queue.

Thank you so much.

Thank you so much for the opportunity, sir, and a very good morning. A couple of questions regarding the energy solutions platform.

First, I gather that we have been selling in the merchant market in the previous quarter, and now will tie up with MSEDCL. Will the margins go down?

Second, how do we see the progress of this segment, say, in the H2 and FY28? Thank you.

Rohan, our long-term strategy is to make sure that we have substantial capacity tied up on a long-term basis on a both side. We would obviously not want a large exposure of market as far as AESL platform is concerned.

When we started and scale up this activity, obviously we started with tying up a generating capacity, and we have now started tying up on a consumer side as well. You must have seen that we have done this long-term PPA with MSEDCL, which will start operating from last quarter of this year.

We were fortunate enough that between this period where we start our long-term supply, the market was good and we have been able to earn a good margin. In a long run, we wanted to have a stabilized revenue profile rather than creating a volatility based on a market in our P&L.

Okay. What about the long-term strategy, sir, in terms of volumes?

In terms of volume, we will certainly continue to scale up this, and currently we have about this 2,500 MW of MSEDCL PPA. We will be doing another PPA with AEML where regulatory approval has already been achieved, we will be doing that PPA.

We will continue to scale up this volume, and we will reach to about total aggregate capacity on a both side about 7,000 to 8,000 MW of tie-up over a 3 to 4 year.

Thank you so much.

Hi, sir. Sir, my first question is on our transmission order book.

We have reported around ₹870 billion of work-in-hand, I guess this doesn't include the recently won APTO project, right, which is around ₹120 billion?

This includes Vizag and Satara, which we recently won.

Okay. Sir, on the transmission commissioning, right, H1 I think we haven't commissioned any meaningful capacity.

I see in CEA data that it's largely due to the ROW issues, some clearances, etc., right, including some capacity in Khavda. Are we expecting this three, four projects that have delayed in H1 to get commissioned in H2 or what are we doing to kind of accelerate this project?

Mahesh, we recently commissioned one element of Phase 4, which is Khavda-Bhuj recently. Hello?

Hello?

Yes, sir. You are audible.

Yeah. We have recently commissioned one element of Phase 4 Khavda-Bhuj recently.

The work on Khavda-Lakadia and Khavda-Halvad is also going on. Halvad is stuck up because of this ROW problem, and we expect resolution very soon.

In fact, it is being discussed at government of Gujarat as well as government of India level very frequently. The other project that we expect to commission would be WRSR in this year also this year.

We are trying to push that project. We might complete the Navinal project in the current year, or maybe it may spill over in the next year, first half.

We'll be commissioning WRSR, Khavda Phase 4, Halvad. These three project are the sure shot, and Navinal probably we might be able to commission.

In Mahan as well, Phase 1 will get commissioned. The Phase 2 will be in the second next year, first quarter.

Mahesh, you must have seen, despite this ROW challenges, we have been able to scale up our capex deployment as far as transmission is concerned. With the resolution of this ROW in Gujarat, we are hopeful that we will be able to scale up even further.

Got it, sir. Thank you.

Sir, my second question is on the energy solutions segment. We've sold around 12.2 billion units this quarter.

Can we have the breakup of how much of this is sold through our long-term contracts and how much on short-term basis?

In quarter two, we sold about 14,500 million unit. Out of this 14,500, about 3,500 is the unit that we take a position and sell in a market, whether to third party or exchange.

Where there we have a long-term tie-up in terms of supply and sell it in a market, that is 3,500. The second volume, which is about 9,500 million unit, is where we do power trading, we sell on behalf of someone, which is 9,500.

There are about 1,500 million unit where we manage or provide the power management services. Totaling that 3,500, 9,500, and 1,500, so that's a total volume of 14,500 million unit that we handled this quarter.

Okay. Sir, this quarter I was just checking the numbers out of 25 BU we have reported in H1, right, and in Q1 we had reported 13, around 13 BU.

I thought this quarter we have sold around 12 BU, but I think the number is not matching.

H1 number is 28,540, and Q2 number is 14,583.

Sir. Got it.

Sir, lastly, in the P&L we have booked some assets, right, some deferred assets of around 17 billion. Could you throw some light on what is this exactly?

Yes. There are two companies, MEGPTCL and ATIL, where company has decided to go to the new tax regime and recognized the past paid MAT assets in the books of account close to around ₹1,500 crore.

Since these are section 62 assets, and therefore corresponding adjustable recoverable liabilities has also been created, and to that extent there is no impact on P&L.

Correct, sir. Got it.

Thank you so much, sir.

Hi, thank you for taking my question. My questions are on the energy solutions business.

Earlier you had said you plan to scale it up to 7,000, 8,000 MW in a few years. Just wanted to clarify, you meant that on the sourcing side or on the power sales side you wanted to scale it up to that level?

Nikhil, this is Raj. It's largely on the supply-stack, or say, the consumer stack side.

Obviously, there would be capacities which will be required to match that demand, so that would be higher. Yes, this is the consumer stack side, that is what we are targeting.

Understood, Raj. In terms of the entities you're targeting, you mentioned this Maharashtra contract, beyond that, are we targeting small C&I customers as well, or are we sticking to the large data center kind of opportunities primarily?

We have a diverse set of consumer stack even today. One, obviously, you have 2,500 MW of the MSEDCL thing, 750 MW AEML, so that's 3.25.

We are targeting multiple data center customers, we are in advanced discussions with them, then further we also have close to 400 MW of C&I clients which are smaller ones, as well as we are also managing some of the other demand and provide our services for a competitive power to various internal consumers. We are making it diverse to ensure that the margins reflect the complete solutions.

Got it, Raj. On the sourcing side, then do we also plan to source coal-based generation and pump storage, or would we largely stick to renewables, solar plus BESS kind of setups, solar, wind, BESS?

The sourcing would reflect the consumption per se as we want to match on a long-term basis on both the sides. Obviously, the demand from our consumers is also diverse, as you can understand based on the mix which we are talking.

There it will be having all kinds of sources, including thermal, PSP, wind, renewables, BESS, and what not. It will be full diverse, including third-party clients and the market sourcing.

Perfect. One last question, when this Maharashtra PPA starts, how much of the BESS already contracted or to be contracted would transition to this PPA?

I would say it this way that within the Maharashtra one, 2,500 MW, we are broadly covered 50% right now based on our sourcing. Obviously, we are further in the market discussing with various parties for further sourcing of various types of capacities.

That's how we're currently positioned.

Perfect. Thank you so much.

This is across the sources, not only the battery.

Solar plus BESS is what you got it. Thank you.

Hi, sir. Thanks for the opportunity.

My first question, carrying on on the energy trading business, you've of course given the volume breakups, would it also be possible to share the revenue and EBITDA breakups as you had given in the last quarter for the three segments within this, the long-term trading, C&I trading, and power management?

See, the average realization as far as trading is concerned is about ₹5.75, and what we sell on exchange on behalf of others, we get about 2 to 3 paise per unit.

Got it, sir.

Just to add further, the total sell for the H1 is about 3,800, and that's purchase sell revenue. For rest of the category, we do accounting on a net basis, means it's only a margin part.

Sell from a long-term contract we have done is about ₹3,688 crore, and the balance in other category, power trading or those C&I customer and power management, those revenue which are margins are about ₹52 crore, ₹57 crore, and ₹32 crore, respectively.

Got it, sir. Just secondly, the EBITDA that you would have earned on the long-term trading would just be, you're saying 2 to 3 paise as a fair estimate to take on the power management and C&I trading, and the balance is all coming from the long-term trading, is that of the 800?

Yes, correct.

Got it. Sir.

Just secondly, on the transmission business, you mentioned that you're expecting to commission three projects this year, WRSR, Halvad, and Khavda Phase 4. Earlier you had given a guidance of around ₹15,000 crore of capitalization.

Are you revising that downward given that maybe some projects have been pushed to the next year?

Not immediately because we are still hopeful that we will be able to complete what we planned in the current year. Because now we expect the next six month will be a fair season for transmission project working, and we expect those constraint which were there relating to ROW in Gujarat we will be able to sort it out.

In fact, we have started handling that and started working on the ground. As I mentioned, we already completed one element of Khavda Phase 4.

Element second, Lakadia, is also progressing very fast. In Halvad, only 50 location is pending, and we expect that also to get completed very soon.

WRSR project is also on a fag end of commissioning. Both the substation on both the side is completed.

The line portion is limited issue or balance work is pending. Now we are doing stringing also the last phase of stringing there in WRSR.

We have started utilizing drone to avoid ROW problem for a stringing, we expect that to complete in this year only. We don't see requirement currently as of now to revise the capex guideline, and we hope that we will be able to do it in next six month of this year.

Right, sir. Lastly on your smart meters business, you're earlier guided for about 10 million installations this year itself.

You've done 3.4 on the first half. Just wondering whether you're still on track for meeting that 10 million this year?

We planned for about 80 to 90 lakh meters this year, and the balance about 40, 40-45, we hope that we will be able to complete in the next half year.

Got it, sir. Thanks.

I'll come back in the queue for further questions.

Okay.

Sir. Thanks for the opportunity.

Sir, on this energy solution platform, I think the contract where we take a position, last quarter we have done almost 3.3 billion units where the spread is higher, margins are higher, and this time we have done 3.5 billion units. Can you give some perspective at the end of the year or maybe on a quarterly basis how this ramp-up can happen on this particular portfolio for us?

I think two points which are very relevant here. One is, as we answered earlier, we are ramping up this particular portfolio starting end of or the last quarter where we would be having capacities going to Maharashtra.

That's where a lot of this capacity, which is currently available with us, would be deployed towards, and the margins would reflect the PPAs, which is what is our long-term strategy. You would see that the volumes what you see today are expected to only increase as we ramp up more capacities on the sourcing side.

This is broadly the business model that you would find as we tying up the capacities prior to our deployment. That's what you would see in our results.

Okay. Basically the 3.5 billion quarterly run rate, a jump is expected in quarter four.

Because if you do that working of 1 to 2 paise in other portfolios that we make, then we are making more than ₹2.20 in this particular side of the business. Then in RE-RTC, the numbers are in similar trajectory that is there for us for the Maharashtra one, or probably it is a little different?

See, I think one first question on the volume, as I mentioned that there will be a steady increase in our volumes as we increase our tie-ups on both the sides. What you see today, obviously there is seasonal weather variations, but at the same time, on a trajectory basis, we are expected to increase the volumes.

Now margins is a question of what the underlying tie-ups are on both on supply as well as the deployment side. The margins in the PPAs are reflecting the long-term return profile of those PPAs, and you will see that happening.

We believe that we will continue to maintain healthy margins in our businesses across the diversified consumer base, and that's what you would see.

Okay. Then just maybe one last question is on the smart metering.

I think though the sir has already given clarification, target for this year and next year. In terms of further build-up of order book, are you seeing activities on the ground, any tendering opportunity that is kind of probably scaling up, or where we are bidding, any colors that can be provided will be helpful, sir?

On the smart meter side, yes, the market right now is still untapped for large capacities to be coming for the auctions. There are already current auctions which are there in the market.

We are participating, and we believe that the deployment will only ramp up because the market is seeing the benefits of it coming in, and we are fully positioned to actually tap that opportunity.

There could also be an opportunity of acquisition in the market on top of what we get through bidding.

Okay. Got it.

Sure, sir. I think that's all from my side.

Thank you.

Thanks so much for the opportunity, and congratulations on

Is this better?

Hello.

Hello. Is this better?

Sorry. Apologies for that.

Thanks for the opportunity, and congratulations on a good set of numbers. Just to kind of clarify on the question on the previous participant, obviously the new contracts that you have will scale up from 4Q of 2027, and the portfolio mix will obviously change going into fiscal 2028.

Could you just give us a sense that from the very strong quarter that we've witnessed, would it be fair to say that there could be some softening as we get into the more cooler periods from a merchant perspective given that your more longer-term volumes will only commence meaningfully from fiscal 2028 onwards? Is that a fair statement?

I think yes, see, as we have said in earlier answer as well, we are transitioning more and more merchant volumes which are currently available with us to long-term PPAs. We will again in future are likely to have timing mismatches, and we will have the volumes available to us for those timing mismatches as we tie up capacities in advancement of our deployment.

Now what we realize on that merchant capacity is based on the market conditions, and we obviously try to maneuver our strategy in a manner that we are able to realize healthy returns on those things. Now within that framework, obviously there are PPAs which we want to tie up, and we are already have roughly 3.25 GW of PPAs, which also have very healthy returns.

With volumes picking up and all of the PPAs coming in, we expect to maintain a very good EBITDA margin in this business.

Vivek, as I said earlier, in the long run we would not want a major volatility in our C&I profitability, and therefore we would not take a long-term or a large volume exposure to market. We will continue to tie up capacity on both sides on a long-term basis so that we have a stability in revenue as well as profitability.

Obviously, to leverage the advantage of having this diverse portfolio of supply as well as consumer side, we will keep certain capacity open, but it will not be a significant one. What you will see in a long run is a steady and growing cash flow as well as volume and profitability.

Got you, sir. Just a second question on smart meters, if I may.

I'm sorry, is this better?

I'm sorry.

Hi, thanks. Just one question.

Adani Green has added more battery capacity in 2Q, just wanted to know if we are going to take that over as well and operate for the rest of the year?

See, I think we are in active discussions with the multiple parties, including Adani Green, for whatever capacity they deploy. If they find it attractive to tie up with us independently based on the market benchmarks, they would do with us.

Obviously, we connect with them as well for these capacities, and you would see some of those happening in the near future. Purely on the market benchmarks where the value is available for both the entities, if at all those transactions happen.

If we do take over, it need not necessarily be at the ₹4.85 tariff, I believe?

I won't stick to a particular number. Number is a result of where the market benchmarks are.

It could be lower, it could be higher, depending upon how the market costs are moving. What you should be looking at is whether I am tying up at the numbers which are market benchmarks or not.

Whether it is SECI, NTPC, or other bids which are available to me, or similar players are available to me when I'm going in the market and tying up with them versus what opportunities they may have in their own portfolio. That's where I think there is a good meeting of minds happening, and we have been able to tie up large capacities and based on that understanding in past where they get their market returns and we get capacities at that thing, and they're able to do this without having risk of SECI PSA tie-ups or any of those things which you see in the center.

At the same time, we are able to tap large resources, it's a mutual win-win. At the same time, both parties would decide based on how the market benchmarks are moving.

For a similar credit profile, for a similar long-term tie-ups, and similar terms and conditions.

Sure. Thanks.

Hi. Thank you for this opportunity.

I had an industry-related question. Now China is putting a ban on solar tech exports, and possibly it could lead to a slowdown in solar in India.

Can you see a reduction in the need for transmission lines going ahead if that happens?

Sorry, Philip, you said they are putting a ban on solar, and

No, no, putting a ban on export of technology in solar, India is still not fully integrated in the solar value chain. If that leads to a possible slowdown in solar capacity addition, do you see there will be a lesser need for adding new transmission lines?

I think, Philip, per se, we do not see the equipment bans in China, because it's largely on a high-tech side that there have been some reservation in exporting technology outside China, largely focus on I would rather say more towards the ingot and wafer or the earlier part of the value chain in these solar manufacturing. At the same time, if you look at India, per se, India is today on the solar side manufacturing side is an overcapacity market, which is available in the ALMM schedules and all of that, those are available.

We do not necessarily see any impact on solar, but I don't think that is the way we should be looking at transmission. The transmission opportunity is coming from multi-faceted, not only based on solar deployment.

You have a huge amount of pipeline right now which is coming from the states upgrading their networks because they need to absorb capacities for their increased demands. A lot of cities now looking for solutions to bring more power to their own consumption centers.

You can see a lot of demand have coming from the Mumbai area as well or Maharashtra area as well, similar things are getting replicated in other metros. Obviously, the third pace is also now coming up with more than 100 GW of capacities coming on thermal, so that entire thing is also pushing the capacities on the transmission side, a requirement of that.

Similarly, you have PSPs coming in in a very big way. Solar is one component.

At the same time, we do not see any meaningful slowdown in solar for the reasons which you just alluded to. It's basically a market where we can decide how much opportunity we want to tap in rather than there is any dearth of opportunity.

Sure, thanks. Just to extend that thought on thermal, this 100 GW of thermal, I think bulk of it is brownfield expansions, where I think transmission lines are already present.

If we move to more towards thermal to offset any reduction in solar, do you see the overall transmission pipeline shrinking a bit than what it would have had been had it been entirely renewables?

No, no, no, it's not correct because even though it is brownfield expansion, the original transmission line planned for that original capacity, and obviously when you add that capacity, you will also require additional transmission capacity for that. For whatever capacity is getting added in new or brownfield, the capacity requirement as far as transmission would be the similar one.

Sure, but would it trend more towards a 400 kV line rather than a 765 kV or HVDC line? Because it will be incremental transmission capacity that can come in.

No, no, no. I don't think it will also be pushing towards 400 kV line because those brownfield expansions are also a large scale.

If the two units are getting added, then it's a 1,600 MW, and obviously there are multiple thermal projects getting develop in the vicinity. Probably it will also require a similar kind of a solution like HVDC.

Recently, you must have seen the one one mega project that has been approved by government of India, which itself is more than ₹80,000 crore, right, Raj? That is from East to North transmission corridor.

As Raj said, transmission demand is coming from a various sector. Now you will see lot of transmission opportunities coming from the project which is aimed at a system upgradation, and also on a consumption side, and especially around those city areas.

Sure, sure. Thank you very much, sir.

Thank you for the heads-up.

Hi, sir. Thanks for the opportunity.

Just a clarification. You mentioned that you have about 3.25 GW of PPAs signed up already on the energy trading.

That would be the 2.5 GW MSEDCL and 750 MW AEML, is that correct? Is the AEML one operational already or is that also yet to be operationalized?

In terms of timelines and the capacity, 2.5 GW MSEDCL are signed. The capacity starts being deployed from end of February this year, 1,000 MW, then 1,000 MW from end of April, and another 500 end of July in the next year.

As far as 750 MW is concerned, that's already approved by the regulator, all process already done. We are in the process of executing that, expect that to happen over the course of next three to four weeks.

The capacity in that particular PPA would be two years from the date of signing that PPA, so that flexibility is there in terms of our deployment. Hope that answers your question.

That's clear, sir. Just secondly, on coming back to the transmission side, if you could quantify, you recently won an intrastate project as well a few weeks ago.

Could you quantify what the project value for that would be and what is the pipeline ahead, this ₹1.4 trillion tender pipeline that you're talking about, how much of that is interstate versus intrastate, and how you see that progress on the intrastate side specifically?

Both the project that we have won last quarter, one is Satara as well as second is Pendurthi. Both are interstate project.

Right now, see, I think the tendered pipeline itself at the country level is around ₹1,40,000 crore. It's spread across the states and the central.

Obviously, central includes a lot of or some of the HVDCs as well, the tilt is in favor of the center in terms of the proportion of the tenders which are out. As we mentioned earlier is there is significant amount of capacity build-out, and the new GEC-II category as well, which has been recently approved, is more focused towards creating intrastate network.

This breakup is more evolving breakup and would have its own spread as we move forward. We obviously decide where it is more suitable for us, which projects are more suitable for us, and focus on them to ensure that we make value for our bids and add value to our portfolio.

Directionally, you will see a lot of new project and opportunity coming from state side as I said earlier. There will be a lot of project that will have to be developed on a consumption side, and especially for those areas where huge amount of consumptions in terms of data center or manufacturing are coming up.

Also around those city which is growing like this year we see consumption increase in the city of Mumbai of the order of 11 to 12%. Those kind of consumption growth in the cities will also push for need of additional transmission capacity around those city areas.

Right, sir. Just continuing on the intrastate pipeline, you're saying directionally we'll see more opportunities coming up.

How is the competitive landscape in the intrastate side versus interstate, and do you see your typical project IRRs, ROEs being a little bit lower on the intrastate side versus the typical interstate ROEs?

Intrastate typically it is little better as compared to interstate because obviously those developers will see as an state regulatory versus central regulatory landscape. Typically in state, the ROE would tend little better.

Got it, sir. Thank you so much.

Hi. The capitalization target for this year and next year if I

Yeah. Could you restate the capitalization target for FY27 and '28, please, for the transmission business?

See, as we said in the earlier question, we actually expect to incur ₹8,000 crore of additional capex in the second half of this year, and another ₹18,000 to ₹19,000 crore in the FY28. That's the pipeline we are projecting as far as transmission is concerned.

Sir, capitalization also, addition to gross block?

The capitalization also would be of the order of ₹8,000 to ₹9,000 crore. If we take WRSR, Khavda Phase 3, Halvad, that's a Halvad project, and Khavda Phase 4, if we take these three only, then it will be close to ₹9,000 crore.

Next year we should be closer to ₹10,000 crore, sir?

In terms of capitalization?

Yes.

Or capex?

Capitalization.

Capitalization would be about... Just give me a minute, huh...

That will also be of the order of ₹10,000 crore. Capitalization will jump after the subsequent, means after next year, because of commissioning of those HVDC projects.

That will add capitalization in lump.

Agreed. One question on the borrowing side, of the total net debt of ₹41,000 crore odd, how much is from ECB?

On the borrowing side, ECB is around 10%. On the overall debt of ₹51,000 crore, 10% is around from the ECB.

10% is from ECB, okay. You heard the currency is hedged, as you had mentioned earlier, but is the interest rate also fixed for a few years, or that is completely variable?

No, no, no. All our USD bonds and ECBs, the interest rates are fixed.

So 70 to 75 to 80% of our debt portfolio is on fixed coupon basis.

Perfect. That is very helpful.

Thank you.

Hey, hi, sir. Thanks for the opportunity.

Sir, just one clarification. The 4.6 GW tie-up and 3.5 GWh of battery storage is entirely from Adani Green, right?

There is no tie-up which includes Adani Power as of now.

There is no tie-up with Adani Power as of now, but out of that total capacity around 700 is from third party as well, 650.

Okay. You mentioned that of the total volume which we traded under the energy solution, close to around 3.5 billion was on the merchant basis and rest was on a trading where we earned around 2 to 3 paise as a margin.

You just mentioned what was the margin on the merchant basis, sir, EBITDA basis?

Margin, yeah, yeah, of the order of ₹1.70 to ₹2.

Okay. Previous interactions, sir, you have mentioned that we would be eyeing close to around 10 GW of PPA with the C&I and data center category where the average spread could come in the range of 80 paise to ₹1.

Now the offtaker-side PPA which we are signing as on date, it's like with AEML we have signed 700 MW, with MSEDCL we have signed 2.5 GW. Even on this 3.5 GW, we expect to have similar kind of a margin or margins out here are more of a regulated basis where it would be much lower?

No, no, it would not be much lower, but it would also not be this high because this is because of market condition prevalent in these two quarter. As we said earlier, we expect Hello?

Hello?

Sir.

As I said earlier, we would not want to have this kind of market volatility that in certain quarter because of market condition you have a bumper margin and maybe subsequently you may not have that significant margin. We will tie up on a long-term basis where those margins would be in the order of 80 paise to ₹1 on a consistent basis.

Fair enough, sir. Is it fair to assume, sir, based on the tie-up which we have as of now on the supply side, that is from Adani Green and the 600-700 from the third party, the available volume which we have to trade on a merchant basis would be in the range of 13 to 14 billion on an annual basis based on the current contract?

Because just on a very simplistic calculation which I did, on a 4.6 GW, that gives us close to around 10 billion of unit to be traded, and 3.5 GWh of battery, assuming that battery again is charged through the power if we take it from the grid at a very lower rate during the solar hour, it gives somewhere close to 14 billion of an unit. Just going by your quarterly run rate, this quarter we sold somewhere in the range of 3.3 billion on a merchant basis.

Is it fair to assume based on our current tie-ups we have this quarterly run rate of 3.3 or 3.5 billion of units available to be traded on merchant till the time the PPAs get executed?

You're right. Again, we have to be mindful of the fact that renewable, both wind and solar, would be a seasonal profile.

On an overall basis, it would be of the order of 3,500 million units per quarter.

This MSEDCL PPA about 1,000 MW will starts supply towards the end of February. Some part will go there.

Got it. Got it, sir.

Thanks for this. Very helpful.

Hi, sir. Thank you for taking my question.

Just wanted to understand that our contracts with Adani Green are on take-or-pay basis, given the curtailment is a larger issue, if the power is not scheduled or the grid backs it down, who bears the cost?

It's basically whatever they are giving me the power, I am paying that the cost for that power. On the generation side, obviously, the grid issue is with the generator.

We are like any other buyer, like they would have PPAs with like SECI or anyone else, they pay for the power which is provided.

If the power is not reaching to you, then Adani Green would be paying for the curtailment, is it?

That's the risk they have in their business.

Essentially how it is being done is that in any PPAs that you would have, whether it is with AESL or whether it is with any utility, generator is to schedule that power, and once it is scheduled, that becomes your responsibility to offtake and pay for that. Currently, they have not been able to schedule corresponding to the curtailment that is being enforced.

Our responsibility starts the moment the power is scheduled.

Got it. Secondly, sir, you mentioned that there is no PPA yet with Adani Power, but I believe this MSEDCL PPA also includes some thermal component to supply the round-the-clock power, you could give some sense will there be a tie-up with Adani Power for how much thermal capacity do we need to tie up under this particular contract?

In MSEDCL PPA, there is no compulsion that we need to have a thermal. There is a full flexibility.

It is energy supply contract rather than a conventional PPA tied up with a particular source. I can do any kind of combination there.

Obviously, we will require a thermal capacity, and we are exploring various other options of taking thermal capacity on a long-term basis. It could be Adani Power, it could be other as well, and we have been talking to third party for thermal PPA as well.

Okay. At this point, we cannot quantify how much of thermal will be required for this particular PPA.

Correct. We also don't want to lock those kind of a capacity.

We wanted to retain that full flexibility on a supply side, I can leverage that entire supply stack in a most optimal manner both in terms of technical and commercial side.

Got it, sir. Thank you.

Those were my questions.

Thank you, everyone, for taking time out and joining this call. If any other questions left out, you please share one-to-one, and we will be happy to answer that.

Thank you.