Thanks, Anand. Good morning.

On behalf of ICICI Securities, I welcome you all to the Q1 FY27 earnings webinar of Power Grid Corporation of India Limited. We will start with detailed presentation, which will be followed by Q&A.

I would like to thank the management for giving us the opportunity to host the webinar. Without much delay, now hand over the call to Mrs.

Anjana Luthra, Company Secretary and Compliance Officer of Power Grid. Thank you, and over to you, ma'am.

Thank you, Mohit. Good morning.

I am pleased to welcome you all to webinar for investor and analyst organized by Power Grid Corporation of India Limited. Today, our functional directors and senior management team will discuss company business and share company's performance outlook based on Q1 FY2026-27 financial results recently announced on 5th of August 2026.

Now I would like this privilege to introduce our functional directors: Shri Burra Vamsi Rama Mohan, Chairman and Managing Director, he is also holding additional charge of Director (Projects).

Namaste.

Dr. Yatindra Dwivedi, Director (Personnel), he is also holding additional charge of Director (Finance).

Good morning.

Shri Naveen Srivastava, Director (Operations).

Good morning.

We also have with us Shri Venkata Subrahamanayam Vallurie, Chief Financial Officer,

Namaste. and

other senior officials with us. Now I request Chairman and Managing Director for the presentation to the investors.

Yeah.

Good morning, all. Thank you for joining this webinar on the earnings update of Power Grid Corporation of India Limited for the Q1 ending 30th June 2026.

We have the standard disclaimer before the presentation, visible on the screens. The presentation outline would be in the manner like we start with highlights and overview, execution and operations, competition, the order pipeline and the outlook of the sector, financial performance of the company, sustainability, and recognitions.

As far as the highlights and overview, pleased to inform that the gross fixed assets stand at about ₹3.25 lakh crore plus. The transmission lines in terms of circuit kilometers are about 186,000 circuit kilometers.

The transformation capacity is 634,516 MVA with about 291 substations, this encompasses. The system availability continues to be one of the highest in terms of 99.8%.

The market position, the shareholding of Government of India continues to be about 51.34%, the market cap ₹2.66 lakh crore, and the FII shareholding, DII shareholding at 24.33% and 20.70% respectively. The credit profile continues to be one of the finest in terms of the domestic as well as international.

All these figures are as on 30th June 2026. The major elements which have been commissioned in the quarter FY27 about 1,635 circuit kilometers, and which is almost 35% of the last year's achievement.

In the first quarter of Q1, we achieved almost 35% of what we achieved the last year. The transformation capacity stands about 10,500 MVA.

The transmission lines, important transmission lines which have been commissioned during this period are Kurnool-III-Maheshwaram, Dausa-Dehar in Rajasthan, New Navsari in Khavda, Kadapa and Ananthapuramu again in Andhra Pradesh. The transformation capacity has been added in Bikaner-III substations, KPS-3, Fatehgarh-III, Bhadla-II, and the 400 kV systems include Jabalpur, Satna, Ananthapuramu, and Fatehgarh.

Added to this, after June 2026, the major systems which have been completed are Raichur-Koppal in the state of Karnataka, Gadag-Koppal and that also is in the state of Karnataka, and Bikaner-II and Bikaner-III in the state of Rajasthan. These projects are, by and large, associated with the RE generation in the respective states.

A new substation in Koppal has also been completed. The guidance what was given as ₹37,000 crore, we pleased to inform that, compared to last year, the capex is more than 10% what we have achieved in this quarter in Q1 itself.

On the capitalization front, the guidance standing at ₹30,000 crore, it is 3. almost 3.13 times than what we have achieved in the last quarter.

As against 1,683, we stand about 5,277 as far as capitalization is there. Availability and the trippings per line continues to be one of the finest in the sector.

Pleased to inform that as far as you are aware of, Power Grid had these emergency restoration systems for tower which proved very beneficial during emergency situations, and Power Grid has also been inching towards bringing in such similar systems on the substation front. Which you all are aware, the 220 kV mobile GIS bay was successfully indigenously developed in association with Power Grid.

Now we have also got the 132 kV mobile GIS bay, and 400 kV GIS bay is shortly on the anvil. Basically, we are well-armed with trying to deal with the urgent situations whichever are going to arise during the construction phase and the operational phase.

TBCB front, the competition if you're talking about, the success till July 2026 in inter-state as well as intra-state, six transmission projects Power Grid have been successfully in these projects over there with a total gross annual tariff about ₹2,200 crore. The performance stands about 47% cumulative as far as the ISTS goes.

Including both inter-state and intra-state, a total 19 projects were bid during this period, of which Power Grid was successful in six projects. It also includes an intra-state project.

A new element added to the asset class in the country, and Power Grid was the first in securing this project, that is synchronous condenser, the first of its kind in the country itself. Power Grid's made in foray, I should say, into the new asset class.

So 400 kV level system bays are also associated with it. Two such synchronous condensers in Fatehgarh-II, and this is expected to improve the system strength, that is a short-circuit ratio, reactive power support during faults, increased grid inertia, and damping of the low-frequency oscillations, which are the characteristic of the synchronous condenser.

All these benefits would be accruing once this systems are positioned so as to bring better integration of the RE into the grid. The total outlook for the sector looks very vibrant in terms of ₹1.75 lakh crore, which are the works in hand for Power Grid, which includes both TBCB and RTM and others.

The bidding pipeline is also very strong in terms of ₹1.19 lakh crore, and the long-term outlook is also very secure, about more than ₹15 lakh crore, which is there. Getting into the details of each of this, the ₹1.75 lakh crore which work in hand, the TBCB amounts naturally having the lion's share, about ₹1.46 lakh crore, RTM stands about ₹25,000 crore, and the other business, smart metering, data center, and BESS, all of that include about ₹4,200 crore.

Summing up to a total works in hand about ₹1.75 lakh crore, of which 50,000 is CWIP. Bidding pipeline: under bidding, ₹73,875 crore, and which are floated, to be floated are about ₹45,000 crore, and with a total projects which are to be under bidding in the pipeline about ₹1.1 lakh crore.

The major projects which are there on the system are the Rajasthan Barmer Complex HVDC, Jam Khambhalia-Jamnagar, Lakadia project, ERES Navada-Durgapur, the pumped storage associated transmission system, Lakadia and Jam Khambhalia-Jamnagar system, Bikaner at Rajasthan. All these things put together, about ₹1.1 lakh crore available in the market.

The strategic drivers spouting of the transmission system investment cycle, as you are aware, is the plans of the CEA and the ministry, the National Electricity Plan, the anchor program of 900-plus gigawatt by 2035-36, ₹7.9 lakh crore, and the hydro potential in the northeast portion of Brahmaputra basin, about ₹6.4 lakh crore, and the data centers emerging to be one of the strongest intake for the transmission systems to evolve, about 71 GW. Added to that, the global One Sun One World One Grid, this also getting active traction in terms of the increasing challenges owing to promos.

The need for integration is much more visible now. We expect that the neighboring countries now get associated in strengthening the grid beyond the borders.

Power Grid has signed a loan agreement with JBIC, a green loan agreement of Japanese yen 80 billion, riding on the subsidiary towards hedging which the Government of India has announced. The robust collections continue to be there in the sector, with the billing standing at about ₹10,963 crore, and the realization about 104%, that is ₹11,404 crore.

A comparison with the previous quarter and the current quarter visibly indicates that the number of receivable days comes down from 19.41 to about 12 days. The financial performance on the consolidated front which I would be focusing upon: the transmission charges, there is a 3% increase, standing from 10,620 to 10,905, and the total income from 11,444 to 11,697.

The PAT stands at about 3,598 compared to 3,631 in the previous quarter. I would like to state over here that the total increase in the transmission charges is about ₹790 crore owing to the new assets which have been commissioned.

Need to appreciate that we are under the regulatory tariff regime, which the major of the assets continue to be there. The regulatory characteristics or the trajectory, I should say, has a revenue reduction in terms of the depreciation and interest, which are but natural in the regulated regime, about ₹330 crore.

And ₹230 crore is owing to the interest because of the difference between the petitions filed and the orders issued by the regulator. This amounts to about ₹560 crore was the downside owing to the regulatory nature of revenue.

While the transmission charges continues to boost forward and move forward, the regulatory characteristic of the asset class which we are on has an impact on the financial figures over here. While the effective PAT would have been plus 247, but for the regulatory characteristic, it stands about minus ₹33 crore, reduction of about 1%.

The standalone financial figures also reflect the similar kind of a trend over here. The financial performance continues to be strong in terms of the gross fixed assets continue to moving upwards from ₹292,000 crore to ₹325,000 crore.

The capital work in progress from 41,000 to ₹50,000 crore. The increase in debt, an obvious indication of the growth path of the company.

The net worth improving from 96,482 to ₹104,028 crore. The ratios accordingly owing to the increased net worth having an impact of earnings per share standing at 3.87 and book value per share about 111.85.

The other key information: the income from previous periods, Q1 there was plus 8, and Q1 of '27 is minus 22. The interest in the differential tariff, which I was saying so, was from 257 stands at 22.

Interest from subsidiaries continue to be up, and the incentive as a consolidated figure is also growing. The dividends from the JVs and subsidiaries is less owing to the status of held on sale of Torrent, Sikkim Power, and Parbati Koldam.

The figures reflect the situation over there. The CSR expenses continue to be steady.

All the other ratios, including the equity in TBCB both in operation and construction, continue to improve owing to the nature of projects what Power Grid is establishing. On the consultancy and telecom front, the Q1 of FY27 stands at ₹252 crore and ₹391 crore respectively.

On the telecom front, the connectivity to Andaman and Nicobar has also been provided by Power Grid's subsidiary, that is Powertel. The first international long-distance communication established to Nepal, adding up more business to the telecom division.

A bulk order from NIC and NKN project continue to move it forward. 100% backbone availability is the hallmark of the telecom systems.

On the consultancy front, the domestic front we had 16 orders and on the international three orders, and the country footprint is about 25 countries what the consultancy footprint stands. On the sustained commitment, pleased to inform that the target set for 2025 has been already achieved in 2025 as far as the 50% electricity from RE, it's achieved.

The other targets in terms of achieving zero waste to landfill, more than 90% achieved and we are close to achieving that by 2030, which is the target date set. Becoming the net water positive is also having encouraging results, with more than 50% achieved, and we should be able to achieve it much ahead of the target.

Becoming net zero, the target standing at 2047, 20% reduction already achieved, and we are inching forward to that date. On the accolades and recognitions, I am pleased to inform that Power Grid has been awarded owing to the initiative under the CSR scheme, Vidya Lakshmi Scholarship scheme, which Power Grid initiated.

Power Grid has also been conferred with the MEKCON award, and also the Powertel has been recognized by the NIXI for its Maximum Traffic User Award. On the industry front, CII Technology and Innovation Award, and FICCI and D&I Award.

Thank you. Thank you for the patient hearing.

Over to you, Mohit.

Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please click on the "Ask a Question" tab.

When the operator announces your name, please unmute your microphone, announce your company name, and proceed with your question.

Hi, sir. I hope I am audible.

This is Apurv from IIFL Capital. Thank you for the opportunity.

Sir, you touched upon the drag which is coming from decline in depreciation, normative depreciation as well as some regulatory differences. Would be helpful if you can quantify this drag in depreciation and its impact on revenue.

How much would that be for this quarter?

For Q1, owing to depreciation and interest, it stands about ₹330 crore. Owing to the interest because of the differential between our filings and also the CERC order date, that stands about ₹230 crore.

It should be about ₹560 crore, the drag on account of the regulatory characteristic.

Okay. Sir.

How do we see this, sir, going ahead, especially because I think depreciation probably will pick a little bit more pace? I recollect in the last cycle we had a lot of capacity around 2014, '15, '16 that time, so that would be completing 12 years.

How should we think about that, sir? See,

as you rightly said, what capitalization happened 12 years ago, that will definitely have an impact because that's a characteristic of the industry itself, the transmission industry under the regulated regime. Basis the quantum of capitalization what has happened in the previous 12 years, it would have an impact.

Then that is a part of the regulatory characteristics, so that should not be a cause of concern because that is the way how the revenues and the expenses are taken care of.

Sir, if I am not wrong, this should have been profit neutral, right, because there's a reduction in revenue and a reduction in the expense as well. Yet I believe that it had an impact on profitability.

Could you help us sort of reconcile that because despite the ₹28,000 crore capitalization last year, profits have remained largely flat?

Yes. One is that certain components which otherwise were available in the previous quarters, some couldn't have been available.

Like, for example, the interest owing to the differential between the CERC orders, standing at ₹230 crore, is no longer available now. Also, the write-back on account of a particular asset class which was there in the previous quarter is not available over here.

This has an effect of bringing it down. Added to that, Sudarshan, you may add to that.

The depreciation what is being accounted for as well as the tariff which is there, there would be always a differential in that.

Yes.

There is

a marginal difference in depreciation and interest

because

it will not match that what is a notional, what has taken in the regulation.

Because of that, there is a marginal impact.

Marginal,

marginal impact.

Major impact is because of the interest on differential between provisional and final.

Major impact is basically interest on the differential between the CERC's orders and also the write-back on account of one of the projects of last year which has happened. That differential is actually what is visible on the financials.

Understood, sir. Just one last question.

If you can share, of the ₹13,000 crore of equity which we have invested in the TBCB business so far for both operational and under-construction projects, how much of that would have been funded by taking debt at the standalone or parent level? Or is it all of it is through equity itself or cash?

All of it is done through equity only.

IR only.

IR only, internal revenue. Power Grid has a strong internal revenue mechanism and it is capable enough to take care of the quantum of growth what we are foreseeing.

Sure, sir. Understood.

Thanks a lot. All the best.

Thank you.

Am I audible? Hmm.

Great. I'm Bharani from Avendus Spark.

My first question is on the ₹7.9 lakh crore of estimated capex by 2035-36 by the government in the transmission space to augment non-fossil fuel-based capacity additions in the country. My question is, in how many years, in your opinion, you think that would be bidded out?

The ₹7.9 lakh crore?

Yeah.

This one, I should say that is kind of a medium part. Immediately, it's standing as ₹1.19 lakh crore, and ₹7.9 lakh crore is to be immediately bid out.

Based upon the traction what we are receiving, there is going to be continuous inflow of projects into the system. The ₹7.9 lakh crore will be spread across maybe another three years or so because we need the systems by '35, '36.

The next three to four years, this will have to be spread across. That these systems will have to be available in '35, '36.

Considering about two to three years of the construction period, these projects should be visible, should be on bar in the next three to four years. Having said that, it will be, by and large, dependent upon the others also because transmission is an offshoot of generation.

The quantum of generation coming up, not only generation, understand. Here it would be the data centers, the green hydrogen, these are new set of requirements where it is going to push the transmission system.

Not limited to merely a generator, it also has a new specific loads which are coming in terms of green hydrogen, data center, green ammonia. You already see few of the projects already taking position in terms of the eastern and western parts of the country.

This is going to give further boost, and it could be that much faster as well.

Understood. Related to the same thing, is inflation and other cost escalations built in this estimate by the government, or is there a scope for increase in this total ₹7.9 lakh crore in the future?

See, these are general estimates. Obviously, it would be difficult to factor in the quantum of escalations what would be happening during this period of time.

Should there be an escalation, obviously it would get reflected in these costs.

There is a scope for increase in this number. Okay.

Again related to the same ₹7.9 lakh crore number, just to clarify, this will also include cost of acquiring land, right? If so, whether the new land rates according to the new guidelines by Ministry of Power the last one year, two year, is it been incorporated, or you think that will also result in some scope increase in the cost because it may not have been included?

Quite an interesting question, I should say. You see, the guidelines which have been notified by the Government of India regarding the land compensation in terms of the right-of-way challenges what are witnessed in the transmission line, few of the states, initially it was Delhi and Haryana who have adopted it.

You see recently Gujarat also adopting it and other states following suit. Obviously, this has not been factored while working upon the estimates.

It is presently not possible to actually even factor in the quantum because that would be emerging only once the MRC rate has been finalized. As we move forward, we get more clarity as to what extent of compensation it would be included in these systems.

It could be project specific depending upon the location. High urban areas and rural areas, that would have a different impact.

As we move forward, we'll get more clarity on this. These are the quantum of systems which would be coming up keeping in view kind of the growth trajectory, achieving 900 GW non-fossil capacity by 2035-36.

Understood. Essentially, even the land compensation, which can be higher, is not in this number.

It can be higher. Okay.

My final question is on basically the general execution delays that the transmission space is facing, including us. As it stands now, is there anything you would like to highlight on status of these reasons why delays are happening?

Meaning, is there still delays due to equipment availability? What is your view on delays in acquiring land or labor shortage or this entire process of finding out the land rate based on new circle rates or market rates to give compensation for right-of-way?

It would be good to hear your views on the execution delays and the status.

Earlier, as you recall, the timeline taken for a transmission line was about 36 to 40 months. Subsequently, there was a lot of demand from the private parties that they would be implementing these systems in much tighter timelines, and it has gone to the extent of 18 months was the timeline given to a 765 kV double circuit line, which is quite a challenging timeline.

Over a period of time, it has been now recognized and realized that these timelines are not practical in terms of implementing transmission systems. Now the Government of India have adequately revisited these timelines and improved upon, which now stands about 26 to 30 months plus.

This is going to make sure that whatever projects are there are having adequate timeline for them to implement. As far as the policy goes, yes, it has been recognized that transmission lines do take time in terms of implementing them.

The second part of it is the land compensation. With the guidelines coming in and with the states taking forward, few of the states taking over, there will be some settling time for them to actually arrive at the mechanism for the MRC.

There could be a nuances in each of the state as to how they would be dealing it. As and when this particular issue is overcome, I'm sure it will be that much faster rather than we finding it difficult in building up transmission systems.

If these guidelines are well accepted and it's translating into reality with the compensation duly being paid to the landowner, I'm sure it would be bringing that ease in implementing of the transmission systems. Having said that, the challenges of ROW is there, cannot be wished away, with more increased urbanization, increased other infrastructures coming into the picture.

We will have to coexist and build these systems to ensure adequate evacuation in the country.

Sure. That answers, except if you can highlight if there is any challenge due to equipment also.

That will be my last question. Thank you.

Equipment supply?

Equipment supply with the high intensity growth in the sector, obviously the existing capacities at times have a challenge in trying to provide these supplies. Power Grid has taken an initiative of trying to give much more visibility to the manufacturers in terms of procuring it in bulk rather than project-specific procurements.

This has given the confidence to the OEMs, they started establishing a good quantum of capacities, which I'm sure is now reflecting in terms of better discovery of prices and also better timelines. Eventually, it is going to be doing good to the sector, the stress on the equipment supplies, which was there sometime back, should not be as much what it was before.

That is going to ease.

You're telling that the equipment supply challenge we had in high-capacity transformers or GIS substations is significantly lesser now?

It would not be as bad at what it was before because the manufacturers are also now ready to take on the additional capacity requirements. There is ramping up capacity in the country as well.

That is going to do a lot of good to the sector in terms of timely availability of the equipment.

Obviously, because government has recently allowed few Chinese companies also to be able to bid, that will also probably ease the equipment supply bottleneck, right?

It should. With more capacity, obviously, more players in the field will definitely ease the situation.

Thank you so much, sir. I will join back in the queue.

Thank you so much.

Hi. Good morning, sir.

My name is Ketan. I'm from Avendus Spark.

Just wanted to double-click on a follow-up question of a previous participant on the difference in tariff from CERC and our filings. What is the reason behind this?

Is it that CERC has not approved some of our expenses? No,

I think I should put some clarity over here. The trajectory of the tariff of the regulator is that they recognize the tariff towards the cost of loan, that is the cost of debt, they recognize it as depreciation, and they unwind that particular cost in 12 years.

That is the nature of the tariff what the regulator gives. After 12 years, the entire debt is supposed to be done away with, and then it's only equity portion.

The characteristic of the tariff in itself will fall down after 12 years because the component towards the repayment of the loan is to be addressed within that time. That is the way how the tariff has been governed.

That is one part, the trajectory of the tariff of the regulator. The second part of it is, as we file a petition for the tariff, and if there is a delay in the issuance of the order by the regulator, then during the intervening period, there is an interest which is accrued to the company, Power Grid.

SBI MCLR plus 100 basis points is what we are entitled to receive during the period because the order has not come into position by the regulator. All of that is also an additional revenue which comes into Power Grid.

As and when the orders are issued by CERC, that particular component, obviously, wouldn't exist. Such component was significantly available for us in Q1 in the previous year.

As the year progressed, the orders started being issued by the regulator, so that particular component dwindled. Presently, that component is not significant, you find a variance between the Q1 of the previous year and Q1 of the current year to the extent of ₹230 crore for the Q1 of '26 and '27.

This is the nature of the regulatory regime which we are bound with. There is no other concern in terms of regulator not allowing any tariff and all.

Absolutely, there is no such issue. The time taken by the regulator, because he's also stressed with a good number of petitions and he has a cycle to dispose them off, but during that period, he makes sure that the developer is not at a loss, there is a component of interest which is accrued to the developer.

In this case, as what I was saying, ₹230 crore was the quantum which was available to us in Q1 last year. As the year progressed, CERC started giving the orders because their cycle will have to come through.

Presently, that particular revenue provision is naturally not available now. We get the orders.

The final orders are already on the board. Understood.

Thanks for an elaborate answer. Just so

if I understand, if I have to calculate the adjusted profit, I need to add ₹230 crore to the Q1 FY27 profit, and also adjust the base for the writing back of any liability. What was that amount, sir?

Yes, how much was that amount?

₹33 crore.

₹33 crore, which was available in the last quarter, is not available here. There was one provision of write-in of a particular company, KSK Mahanadi?

KSK Mahanadi.

KSK Mahanadi. That's not available.

To calculate the adjusted profit, I should reduce the base profit by ₹33 crore and increase the current profit by ₹230 crore. Yes, that's it.

Those were my questions.

Thank you.

Sir, this is Atul here from JPMorgan. Sir, my question is again on equipment supply status.

Especially for some equipment like transformers, the industry had seen quite a bit of increase in price rise over past few years because of a lot of ordering. Now, has the situation started to normalize, and are the prices stable, and are they coming down?

Because we gather that a lot of capacity is being added by vendors, which you also alluded to. Does it have a scope for reducing, at least to some extent, the cost of implementing the projects?

Yes. As far as the increased capacity, as the nature or the law goes, with more players, more capacity and supplies, obviously it would have a reducing impact on both the price as well as the timelines, availability of the systems.

Having said that, the raw material which is required for the transformers and all, that is the factor which will continue to impress upon the costing of this equipment over here. A combination of the increased supplies and the raw material costs would have an eventual impact on the price line of those equipment.

We see that the prices are quite stabilized over here, and in the days or the months to come, you should see much better progress as far as the price goes. Definitely, obviously, if the price is coming down, it will have a much better impact in terms of sweetening the revenues of Power Grid.

In terms of the earnings of Power Grid, it will be that much sweeter over there as we move forward.

Sir, what is the status of the award of Rajasthan Phase-IV Barmer Complex HVDC project? What are the timelines here?

The timelines are that these bids have been submitted. The initial offers have been submitted.

They are being evaluated by the bid process coordinator. The next steps, as what the BPC will have to take, will have to be announced.

The bids have been submitted. That's the status.

Is there a date for announcing out yet, or the date is still not out?

The date is still not out. The date is known just before the date of ERA, one day before it is known.

It is not known presently.

Sir. Thank you.

Thanks a lot. Thank you, Tiwari ji.

Yeah. Hello, am I audible?

Yes.

Thank you for the opportunity, sir. You have mentioned a very strong pipeline going ahead from the Brahmaputra basin requirement, data center, GH2 opportunity.

Any thoughts on how can we see the HVDC pipeline for the next three to five years? Any thoughts on whether we can have preponement of any of the capex that we have mentioned beyond '35?

Any thoughts on that front? That is the first question.

See,

as you're aware, one of the project of HVDC is already in the pipeline. By '27, there's traction for another project to come into the pipeline over there.

We look forward for that. Having said that, almost 21 HVDC projects are there depending upon the evolution of the generation and the load centers, because we need both the points for us to identify the projects.

The 900 GW report of CEA has about 14 HVDC projects, and the Brahmaputra basin has about six HVDC projects. The international HVDC projects linking Sri Lanka and Andaman and Mannar, they also have actively under consideration.

Depending upon the evolution of the technology, the ease in availability of these systems, and the costing of the systems will have an impact in the planner deciding to go towards the HVDC. To tilt towards HVDC, because they have a long gestation period, these HVDC projects, and also they have significant costs.

The planner will have to carefully examine the availability of these projects and the requisite timelines and accordingly plan these systems. There is good traction as far as the HVDC projects which are visible in the country.

Got it, sir. Like you mentioned, cost overruns would be one of the factor that would determine the timing and quantum of HVDC projects.

Any thoughts on how BESS as a system would play a role in the upcoming five years given pricing-side pressure from OEMs' capacity coming in might go down, but commodity inflation for the OEMs' raw material can still drive up the pricing? Any thoughts on HVDC being complimented with BESS or getting converted through BESS to some other technology?

Any thoughts on that front? Just to follow up on that, what kind of equipment would we or any other transmission player be procuring from Chinese OEMs who have received approvals from the government?

Those were the last two questions from my end.

Multiple questions over here, I should say. The replacement of HVDC with BESS, I don't think so it would be exactly so in that manner.

BESS has its own utility and HVDC comes with its own utility part. These two components in the planning part will be taken by the planner and CEA put together.

They will be seeing because it is not a static scenario. What we need to appreciate is that the power sector is not a static scenario.

With more generation coming in different locations, more data centers or more loads having in different positions, this is continuously dynamic in nature. Given the situation, given the costing of these systems, BESS, HVDC, and other alternative systems, including 1,200 kV HVAC systems, all these things are actively considered before finalizing upon that particular component which will have to be taken up, which is most suitable at that point of time.

The planner will evolve and I'm sure that they are looking at it. Having said that, on the BESS front, the regulator also has recently come up with an amendment to the terms and tariff regulations under which he's expecting that the integrated storage systems, that is the batteries or such kind of a systems, are given a provision that even the transmission developer like Power Grid also can develop.

Power Grid is also working upon this very intensely, and we have also filed petitions before the regulator after obtaining the consent from the northern and the western region RPCs. This is another opportunity for Power Grid also to work into the BESS storage systems under the regulatory portion, that is under Section 62 of the Electricity Act.

We are working on that as well, but this largely depends upon the traction what is being given by the other stakeholders.

Thanks. If you could just follow up on the Chinese OEMs' equipment that we plan to purchase, the kind of equipment we plan to purchase from the Chinese OEMs who have received approvals.

See, as you're aware, with the recent notification, four of the companies within the country have been allowed by the Government of India. Having said that, Power Grid continues to be in adherence to the guidelines what are notified by the Government of India from time to time.

To the extent whatever we have the options for procuring these equipment from the neighboring countries, Power Grid will be adhering to that.

Got it, sir. Thank you for patiently answering all my questions, and all the best.

Thanks so much, Jinesh.

Thanks for the opportunity. My question is, the equity investment in operational TBCB projects has gone up from ₹4,671 crore last year to ₹9,965 crore.

Could you give us a sense, given TBCB is the main driver of growth, what is the color that you can provide us on the consolidated performance of TBCB in terms of revenue, EBITDA, and PAT? Also give us a sense on what kind of return on the invested equity in operational TBCB projects you have been able to secure.

Yeah.

The operational part associating equity in TBCB operational has moved from 4,671 to 9,965. On the mainstay, as what we are saying, the lion's share of the projects presently are under the TBCB regime, and there is competition in terms of securing the projects.

Obviously, we need to tread a path of both growth and profitability, and Power Grid is continuing to make sure that there is both growth and profitability in its endeavors, whatever we are doing. The returns are also, if that's a specific question, I should say returns are also well calibrated to make sure that the investor is comfortable with those returns.

Because it's not one single project which will be determining it. Multiple projects, each of the project comes with its own niceties, and after execution, the quantum of claims which are there, all of this put together will be giving the effective returns, and Power Grid is well safe and also making sure that all the returns are well within the interests of the shareholders.

One request here is that because your business growth is largely driven by TBCB now, could you make a separate disclosure in terms of what the consolidated contribution from TBCB projects is to the P&L? That is the main growth driver for the company.

What is the consolidated revenue, consolidated EBITDA, consolidated profit for TBCB? That will help us analyze the company better.

There are periodic regulatory adjustments which anyway are in a business where the pace of growth has slowed down quite considerably. We are not able to appreciate your results given the key underlying driver of growth, the transparency on the disclosures is not allowing us to evaluate how TBCB performance has been.

I do appreciate the concern. In fact, it is an equal concern from my side as well that you need to appreciate certain regulatory pulls or pushes actually impacts the Power Grid's financials.

I think we will examine that. With these kind of meets or such other platforms which are there or maybe better disclosures, we will try to make sure that this is properly reaching out to the analysts and the investors alike so that they continue to appreciate and have confidence on the company as to how we are moving forward.

We will examine that.

Sir, as per the regulator, what we have to disclose, we have already disclosed and wherein the net profit

We will examine that. We will do that.

Thank you so much for that particular insight. We are also equally concerned that the true reflection of what we are performing should be there with the investors so that he can analyze us that much better.

As we have seen during this discussions, the primary concern was their inability to judge that there is a regulatory drag, which is but very natural and nothing much cause of concern as what is happening there, which I have already explained in my previous statements.

Just one more question. Given the nature of capacity addition is more leaning towards solar, could you give us a sense of, are there any major transmission lines of Power Grid which are grossly underutilized at the moment because renewable projects have not come up and Power Grid's transmission lines have got commissioned?

In those cases, are you facing any challenges in terms of both operationally and recovering your dues from customers?

Okay. I should say yes.

To the extent of the transmission charges of Power Grid are not governed by the power flow.

That

is the fundamental part. It is not that only power flows Power Grid starts getting its revenue.

Meaning that it is quite safe that once we commission the asset, the revenue start flowing. Whatever the mechanisms what the regulator has identified, there are provisions where we continue to get our tariff, because my tariff is not rupees per megawatt-hour, it is rupees per annum.

Be rest assured that the revenue is not linked to the generation. Having said that, definitely it's a cause of concern in case if the generator has not come on time, the load is not there on time.

Here I need to bifurcate two parts. One part is that the systems which are built under the regulated tariff regime, that is the RTM mode, we need to go to the regulator and get the clearance for the deemed DOCO status.

We have good amount of revenues which will also flow as and when the regulator gives the orders, so that revenue also will start accruing now. It's to the extent of what is that amount?

₹300 crore is actually

₹300 crore of revenue. These are the regulatory things.

As and when the regulator starts hearing these petitions, now that revenue also will start accruing. As far as TBCB goes, there is no such need to go to the regulator and it is considered as deemed DOCO after a specified period, the revenue starts flowing over here.

The generation not coming or being underutilized will not have an impact on the revenues of and the earnings of Power Grid.

Okay. Thank you so much.

Glad to clear it. Thank you, Kishore.

Hi. This is Satyadeep Jain from Ambit Capital.

Sir, the first question on in the slides, you mentioned new awards which total ₹2,200 crore of annual revenues. Maybe can you share corresponding NCT capex estimates for the new awards this year so far?

I think

we can get that separately if you're looking into the NCT part. I can get you, but for intra-state, that wouldn't be available, the intra-state part of it.

The NCT is not definitely a guidance factor for us to get the tariff over there. We can definitely do share that.

I can take the detail and somebody would reach out to you. Then that's not the one which is.

Because just trying to correlate, ₹2,200 crore annual revenue seems large given typically historically revenue by gross block numbers. Just I'll maybe take it offline on the NCT cost estimate.

Also, the CERC notification back in March had suggested that and which was also one of the things you noted on regulated RoE on BESS projects. BESS is also now part of transmission element.

When do you realistically expect to get some BESS projects awarded to you on regulated return basis? Is there any visibility you have that you expect some sizeable work in hand from that?

Yes. With the regulator coming out with that regulation, the amendment which you are stating so we have already had discussions with the concerned RPCs at both at the northern region and the western region.

Having their clearance, we moved forward and petitions are also filed before the regulator. See, we have to understand any new system which is coming, there will be a lot of challenges in trying to do it.

There will be some settling time for this particular concept. The battery is not considered as transmission element as what you are saying.

It is considered as that element whoever is doing it. If a generator is doing it, it is considered as a generation element.

If it is a transmission, it is a transmission element. This regulation has actually allowed a transmission company to get into the integrated storage business, that is battery included.

Power Grid has already taken initial actions and we have moved very fast in terms of about couple of months. It has taken two to three months after the regulation where we could also reach out to the stakeholders in the RPCs and also then file the petition before the regulator.

Having said that, we will have to await the regulator's position, what he would like to look into it, and the other stakeholders, then it will mature. Once it is so, we will obviously come forward and let you know what is the status.

The present status is we have already moved forward. We have done all the groundwork, all the homework is done, and we already filed the petitions.

Okay.

This is as per the procedure of the regulation itself. As per the regulation, we will have to move in this manner, we already done all of that.

Okay. Just one quick question on the profitability for this quarter.

I know previous participant also alluded, you mentioned there was interest accrued while you're waiting for tariff of about ₹200 crore. Now that you've got the tariff, I'm not sure on a YoY basis that should impact your profitability comparison too much.

There is some forex impact. Also just wanted to see, are you able to pass it on?

Because we're not able to see PAT growth, does that otherwise mean that the TBCB projects you commissioned, which was also what the previous participant was asking, that in the first year, you don't have much PAT from the entire TBCB projects commissioned in the last year? Just trying to understand the profitability bridge better.

Interest accrued, I know till the tariff is approved, but now tariff is approved. I don't know if that should have any impact on YoY comparison.

The tariff continues to accrue the entire year after the CERC order comes over there. Until then, there is a revenue stream which comes owing to the interest because of the differential between the DOCO and the CERC.

That is the reason there is an upside. Obviously, when we compare with that upside with any other figure, there would be a difference.

That is what is visible to the extent of about ₹230 crore. On the capitalization which has occurred, the transmission charges should have gone up to ₹788 crore as far as the earnings go.

On the top line, should have gone by ₹788 crore owing to the transmission lines which have been commissioned. Correspondingly, the PAT should have been about ₹247 crore, so that should have moved up.

For the regulatory drag, which is an inherent and a natural way how the regulator's assets, all these years which is moving, that is visible here, which is actually bringing it down to the numbers what you're seeing. Otherwise,

You're saying

the transmission lines have increased by ₹788 crore over here in this quarter.

You're saying ₹247 crore additional PAT from all the TBCB projects commissioned in the last one year? Is that what you're saying?

I'm

not limited to TBCB, a combination of both TBCB and the trajectory of the RTM projects put together, with the lion's share being that of the TBCB. Yes.

Okay. The FX losses that you had in the regulatory account, are you able to pass that on?

Is that also one-off or there was

It's passed on.

That's passed on.

ERV part is well taken care of because the regulated regime has that particular comfort which provides to the developers. Okay.

Thank you so much. Thank you.

Hi, sir. Thank you so much.

Dhruv from HDFC AMC. Sir, first question: we have started well with ₹5,000 crore capitalization in 1Q.

Is there scope for a meaningful upside to the ₹30,000 crore capitalization guidance for the year?

Yes.

Some degree, if you can give us. See, the transmission systems are not coming, unlike other businesses which have a cycle of every quarter or every year,

the transmission systems do have a cycle based upon the timeline given for implementation over there, taking into account the ROW challenges. Glad to inform, as I was stating in my initial statements also, the quantum of capitalization which has happened in the Q1 stands about ₹5,277 crore.

We are also looking for good number of projects, that is the Koppal, Gadag, and the Bidar-Maheshwaram, these projects also will be on bar apart from other projects which we are implementing there. As we move forward, the projects come into capitalization, and I'm sure that this number would be that much more steady and improving.

Sure, sir. Sir, the second thing is, I was trying to do a console minus standalone, trying to imply the TBCB numbers largely.

If I look at the gross block increase difference between console and gross standalone, the gross block increase on a YoY basis is about 67%, 1Q this year, 1Q last year. The increase in depreciation, the same differential increase in depreciation is only 27%.

I'm just trying to understand why this gap. Is this because most of the incremental TBCB projects are coming under lease accounting method and hence there is no depreciation associated with that?

If that's the case, does it change the way the reported PAT for TBCB moves under the lease accounting method versus your normalized accounting method?

We are now going to the new method, right?

Lease method only we are following, sir, wherein the depreciation will not come. It will be taken as amortization of the lease.

That is the reason why comparing the depreciation component in TBCB will not be formed in commensurate with what is the capitalization. Because out of capitalization, lease receivables are also there which are in BOOT mode.

For that, the depreciation component will not be there because that is treated as lease receivable.

Lease receivable.

Got

it.

Does it, in any sense, have an implication how typically we think of PAT for a TBCB project versus how it moves on a lease accounting method in the first three, four years?

No, even with this accounting method, the PAT will not have any impact, the difference between either I go through the PPE method or through the lease

method.

PAT will not have any impact.

Got it. Sure.

Sir, last question is, yeah, sir, this regulatory adjustments that you mentioned about which is happening in the standalone, the deduction of depreciation resulting to reduction of revenue, we understand this is regulatory process. Probably just to give a better understanding if this is having any implication on the PAT number, if you can probably help us understand what is the nominal or normative loan that you have in your regulatory accounts versus what is the actual loan which is sitting in the standalone assets on the operating transmission assets?

Because if there is any meaningful gap, that would probably indicate that there will be some drag because of this regulatory adjustment, and there is no gap, then probably the market understands that there is no implication of this.

Basically,

the difference between the normative debt and the actual debt on the operating regulated assets.

I will check this back and get back to you, Dhruv. Should that be fine?

Sure, sir. Great.

Thank you so much, sir, and all the best. Thanks.

Some difference would be there, but I'll let you know.

Yeah.

Thank you.

Yeah. Good afternoon, sir.

Sir, my question is on grid strengthening projects. I understand there will be incremental projects for strengthening the existing grid as renewables penetration increases, for example, for adding inertia.

In cases where we are the owners of the assets, will those strengthening projects come to us on regulated mode, or will they typically be via TBCB? Whether these projects are already a part of the ₹7.9 lakh crore pipeline?

That would be the first question.

All projects which have to come are obviously in the pipeline only, whether it is a grid strengthening scheme or a generation-associated scheme, all of them are in one particular bracket. As far as the existing systems, substations what we have, should there be any extensions which will have to be done there, this is taken care by the NCT.

They look forward to the best way of implementing it. At times, it is given to the regulated entity who is already there, or the entity who is already owning that asset class over there, he's given the opportunity to undertake this under the RTM mode.

Sometimes we see that it is also given under the bidding route. It's a combination of both these things.

There's no specific mantra or a rule as to how it happens. We have seen both these things happen.

It's no specific way.

Understood, sir. Sir, and on the One Nation One Sun One World One Grid, when do you realistically see projects award any sense on that?

Yeah.

Obviously, as we have evolved from a state to a region and region to a country, the more we are integrated, the better we are in terms of utilizing the resources that much more effectively. Going beyond a country, it does have an additional component to tide over.

We need to bridge that gap with the diplomatic relations with that country. If that is done, this would be one of the finest ways in terms of integrating because the telecom network is already been integrated as you see, the entire world is now under one internet.

Eventually, as we move forward, this should be the answer so that the ups and downs which are there in a typical sector are well taken care of, and it should move forward, this particular concept of One Sun, One World, and One Grid. One Nation, One Grid, One Frequency, Power Grid has already achieved that particular objective, and this would be the next extension what we need to reach out.

The moment one or two countries we are able to integrate, which other countries are doing elsewhere in the world, we are going to stitch this particular network across the world. It would be in the interest of the mankind, I should say, if we are getting through this.

Sir. Thank you so much, and wish you all the best.

Thank you so much, Mohit.

Thanks the management for the detailed presentation. We would like to thank the management team for giving us an opportunity to host the call.

Sir, would you like to make any closing remarks? Yes,

yes. Thank you so much, Mohit, you and your team for this particular webinar being conducted so smoothly.

Importantly, thanks to all the participants, including the investors and analysts, who continue to repose confidence in Power Grid. The Q1 results, obviously, they do have these kind of queries which are there.

We are glad to actually unveil the challenges as far as the regulatory regime looks in terms of the drag what has happened over to the regulatory regime. I'm sure that these clarifications would put them in a better perspective in trying to understand what Power Grid's growth trajectory is.

Thank you once again for your time and continued support. We look forward to gain your confidence continuously in this sector.

Thank you so much. Thank you.

Namaste.