ACME Solar Holdings (NSE:ACMESOLAR) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY 'twenty seven Earnings Conference Call of Acme Solar Holdings Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. And I'll hand the conference over to management. Thank you, and over to you. Thank you. Good afternoon, everyone, and thank you for joining us today. I am Ankit Verma, director of corporate finance. I'm joined by our chairman, Manoj Kumar Bhatiaye mister Nikhil Dhingra, joint MD and CEO and mister Arun Chopra, CFO.

0:49 It is my pleasure to present the highlights of our of our performance for the second quarter and the first half of FY twenty seven. Let me begin with our financial performance. Total revenue for the quarter stood at INR 1,007 crores, which is up 67.5% year on year, while EBITDA increased 63.6% to INR $8.74 crore, driven primarily by short term peak power based operations and renewable capacity additions. Our blended EBITDA margin was 86.7%, which comprises 90.8% from renewable generation and 78.3% from best operations, where the cost of power purchased to charge the batteries sits within the operating expenses.

1:41 Profit after tax rose 133.5% Y o Y basis to INR $2.69 crore, represents a bad margin of 26.7%. Our asset base grew by INR 11,466 crore over the year to INR 28,462 crore following the commissioning of BEST and RE projects. Coming to our business and execution updates, we made strong progress across commissioning, PPA signing and short term peak power BEST contracting. We have commissioned approximately 5.2 gigawatt hour of best capacity till date, which is the second largest best capacity in India as of date.

2:30 And we achieved our initial half yearly target of five gigawatt hours, which we mentioned in the last call. With this best in solar commissioning, 1.9 gigawatt of our contracted projects are now partially commissioned. In addition, 1.7 gigawatt of modules have been delivered to site, out of which 1.1 gigawatt are already installed across multiple projects. Out of this installed 1.1 gigawatt module capacity, 200 megawatt peak of modules is already charged, and the balance is expected to be charged by November to December of this year. We signed four thirty megawatt of FBRE PPAs during the quarter.

3:17 Additionally, we yesterday signed another 400 megawatt FDRE PPA with NTPC, taking the overall PPA signed portfolio to 92% out of the total contracted portfolio of 8,370 megawatt. Through short term best contracts, we have locked in more than INR 1,600 crore of revenue for partial sale of FY 'twenty seven capacity and more than INR 1,500 crore for partial sale of capacity for FY 'twenty eight, with the balance to be tied up through future bids. Our COF for the quarter improved from 24.1 to 27.8% year on year, and power generation grew 19.6% to 1,840 units.

4:06 Additionally, we sold 324,000,000 units through short term peak power based contracts. The weighted average cost of debt for our fully operational projects is around 8.4%. Around 65% of these borrowings are from PFC, REC, Iriday, MAPFRE, whose rates follow their own long term cost of funds and this limits interest rate volatility. Further, has upgraded ACMESOLAR holding rating outlook to AA minus positive from AA minus stable. Turning to the key sector and regulatory updates. Below are the favorable steps taken by the government benefiting all the stakeholders. First, best connectivity.

4:53 CTYL has initiated the grant of best connectivity under non rover route, speeding up deployment. For us, it helps build a large best pipeline at preferred high GHI sites in Rajasthan. Second, Green Energy Corridor Phase III. The union cabinet has approved INR 1.36 lakh crore for interstate transmission and INR 50,000 crore for 50 gigawatt hour of S, targeting the evacuation of 135 gigawatt of renewable energy. This is expected to open up new opportunities for us in the state connected renewable projects. Third, the Pradhan Mantri Surya Sarovaryojana. The scheme targets 5,000 megawatt of floating solar with at least two hours of co located storage and provides central financial assistance of up to INR 1 crore per megawatt after commissioning.

5:49 This opens up new business opportunities for us in the floating solar market. And lastly, use of curtail energy for best charging. Wherever the G and A is delayed, curtail solar under the PPA can now charge best for merchant sale. This give us the opportunity to commission our solar capacity ahead of scheduled G and A and utilize that energy invest. Overall, these developments reduce risk, widen the opportunity set and support our focus on best deployment. Looking ahead, let me share our upgraded capacity road map. Given our execution momentum and the scale of the opportunity, we are raising our targets across all three time frames. FY 'twenty seven, best commissioning guidance raised from 10 gigawatt hour to more than 12 gigawatt hour driven by our early deployment strategy.

6:41 And by 2030, our renewable target rises from 10 gigawatt with 25 gigawatt hour of best to 15 gigawatt and 50 gigawatt hour of battery, doubling the storage component. And below are the several factors that support delivery of this road map. A strong tender pipeline, 20 plus gigawatt of upcoming tenders across solar plus best, FDRE, CFT, and PHSP. 50 gigawatt hour of peak power bills already rolled out till September 27, and another 200 to two fifty gigawatt hour of short term peak power contracts expected in the near term near to medium terms. And 20 gigawatt hour of medium term peak only tenders expected shortly.

7:30 And as we speak today, CECI has launched a large four gigawattsixteen gigawatt hour auction for four hours of a short peak power, which requires commissioning within the required twelve months. The tender also carries VGF funding of INR 15 lakhs per megawatt hour. Secondly, about 10 gigawatt of RE connectivity inventory that we have, which is secured and applied for upcoming bids over and above our existing portfolio and five gigawatt plus of best connectivity already granted. Third, about 19 gigawatt hour of best already contracted with reputed suppliers, including CTL, ITM, Gangfang, Trina and CLU. I would now hand over to Mano, sir, to discuss strategic priorities for the company going forward. Thank you, Rajeet.

8:16 I would like to extend my sincere gratitude to our shareholders, our board of directors, and my team who have continue... Continuously supported and guided the company in the right direction. Our strategy going forward will rest on five pillars. Together, they are building a return led self financing renewable platform with contracted eligible cash flows. First, return on capital and profitability. We allocate capital to the highest return opportunities, megawatts matter, but the major we would ourselves to earnings growth and the quality of these earnings. Second, BSS as a cash engine. On a rolling basis, we expect to operate around 10 gigawatt hour of BSS subject to tariff realization.

9:08 Its cash flows fund our growth and reduce the equity needed for new projects, making this a self financing platform. Third, execution excellence. We are focused on higher receiver, continued VSS addition and keeping solar and balance of the system ready for upcoming projects. Being ready ahead of the grid improves margins and hedges us against transmission delays as our assets can start earning before full G and A. Post margin improvement. Cuttering Solar can now charge our BSS, so energy that would otherwise be lost, lifts BSS EBITDA and cash flow. And we have tied up CapEx for both BSS and solar below budgeted costs, building better margins in from day one.

9:58 Fifth, contracted revenue visibility. Long term PPA anchor our portfolio revenue, while short term peak power contracts monetize our DSS capacity, giving us high visibility of future cash flow. With that, I conclude my remarks. Thank you for your continued support. We'll now be happy to take your questions. Thank you. Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. And gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Puneet from HSBC.

11:00 Congrats on great performance and looking forward to your targets. My first question is, given the context of delays in transmission, what is the revised number of capacity addition that you intend to do for FY 'twenty seven for power generation? And also, what should one think of as annual CapEx and capitalization plan? Right, Puneet. So of course, we are we understand the delays in the G and A, right? And we have reoriented our strategy around it in terms of the best commissionings, which we have done. As you would have noted in our quarterly presentation, we have partially commissioned around 1.9 gigawatt of capacity through a mix of solar commissioning, best commissioning, as you would have noted.

11:48 So as we are commissioning these capacities, we are realizing the revenue, which is seen in these quarters. So if you look at the complete commissioning of an MPRE plant or a hybrid plant, that is dependent on the GNA commissioning coming online. Right? And as for the current timeline, we are hopeful that we will be able to do 1.5 gigawatts. Right? But it could be more, it could be less by a quarter depending on the G and A commissionings. But of course, as far as the partial commissioning go, it will substantially higher, maybe will be substantially higher, maybe 2.5 gigawatts, three gigawatts. Because as far as AC commissioning go, we've already charged 2.5 gigawatts of capacity in terms of that. And if you look at revenue generation elements, we as we have clearly mentioned, we have charged 1.9 gigawatt of capacity commission.

12:35 Because given these FPRE constructs and the, you can say, the peak power constructs, right, these are now distributed across multiple CPU substations. So tracking the full commissioning, right, does not mirror lead to menu generation. Right? Because the best comes online early. Like in one of our... Two of our actually plants, we have charged solar also. Right? And we are using... Because the GNA is not live, we are using it to charge the best. Right? And as far as... And and and the GNA is partially available, let's say, at week on entry. So we are supplying to NDPC during the day whenever the GNA is available, rest of the time it is going to the best. Right? So the plant is commissioned, but, of course, since the GNA is not available, we are using it very productively by reducing our cost of production.

13:20 So that's how we will continue to share the details also in terms of the commissioning and also in terms of the elements commissioning. No. I get that. So the 3.9 g not includes all this. Sorry. Just to complete the reply on the CapEx, right? So CapEx also is something you asked. So we have done around INR 10,000 crores of CapEx this year till date. Okay. 6,000. So sorry. 6,000 crores of spend out of which three and a half is capitalized and three is. So 6,500 crores is what we have done already, and I think we will do similar amount or a higher amount in the second half of this year. And and capitalization also, similar number?

14:05 Yes. Yes. Because we are targeting to capitalize whole of 12 b o r r of best in this calendar year... In this financial year only. So the... I think the number will substantially go up from what we have done in the previous half year because the best is ordered, DLCs are getting opened, we have money line. As you would have noted, there is a lot of cash because of the disbursements we received in September. So all of this will be utilized into CapEx. Right. And on the generation side, the three gigawatt, where should it end end of FY twenty seven, including what you are, you know, used to power your own base? Generation side, to power our own best in terms of... You can say, see, there is... I think what you mean to ask is there is best and there is generation to charge that best or to supply to the grid. Right?

14:54 So you wanna know that number. So it will be upwards of 1.5 to two gigawatts in terms of that generation, in terms of the megawatt peak we we will install. And, of course, bulk of it will be driven by particular two, which has around already installed of around 700 megawatt peak is already installed at that. We are just awaiting the G and A going live. Our transmission line is more or less ready. And then Nimaj and then Bikane three, these three only will take this above 1.5. And, of course, we have also coming, which will take it to around two gigawatt plus. So on the generation side. Right? And this could go upwards. I'm just saying the basic three, four projects, which we see as coming online before March, depending on the depending on the timelines of their G and A. And and at... Not not at all places we are using this to charge battery because, Aranspur, because the substation is coming live earlier, we may charge the solar first and the battery may come later or battery may come concurrently also.

16:00 Understood. And on the debt side, how should one think about, you know, your cost of debt going into the future? You also have a credit rating upgrade, but at the same time, there's also interest rate rising? Yes. Yes. So you're right. It's of course the global and the Indian situation is moving towards stabilization or some increase in the interest rates, of course. So the as Ankit mentioned, we have analyzed this issue and we have reviewed that 65% of our debt is from institutions which borrow very long term, right? If you noticed, PFC, REC, IRIDA and of course, NAPFIT, these institutions borrow very long term, only 20% of their book is on a five year duration borrowing, so which they refinance every five years. Rest of their book is fairly stable. And these guys don't really if you notice their behavior in last five, ten years, they have not increased their base rates as frequently as an MCLR being the institution would do. So we don't foresee interest rates hikes from, let's say, INR 10,000 crore out of our INR 15,000 crore debt book, operational debt book, which is there. And on the other restructuring debt, of course, as you know, once the project gets operational, there is a substantial reduction in the interest rate, which clearly happens because of credit risk reduction and nothing to do with the interest rate cycle prevailing. So let's say 9%

17:30 plus debt, which we... Interest rate which we are paying in lot of these projects, which are under construction. We'll move down to, let's say, 9% sub... Substantially sub 9% rate. So that's something which is independent of the macro. It is a micro related to our company, which will also play out. As we are seeing even in during the under construction phase, we are getting two projects refinanced, which is in progress, where the battery is commissioned, the solar is very close to commissioning, but we are getting it refinanced. So that is also going on because the risk is currently out of the picture in terms of the commissioning of both the elements that battery is commissioned and solar is very near commissioning. And the G and A is also going to get commissioned. So we are getting good demand for such where even during the construction phase, are able to refinance.

18:17 Understood. Just lastly on my side, on the 400 megawatt NTPC tender that you signed, who's the off taker? And has the tariff been reduced to 4.37 from earlier 4.7? What's driven that? Yes. So NTPC is the off taker for that FDI in PPA, right? And Tushar, we have not reduced the tariff in that one, right? In the NTTP. So there is a GST 512% impact, right, which is... It's a tentative estimate of that tariff. So that is not a tariff reduction. That is basically the GST reduced to 5% from 12% post the RFS.

19:05 Right? So that... So there is no tariff reduction in this particular PPA. There is I think we have increased the hour of battery, one hour of battery, right? Four hours of half and half Four and half. So we have increased the battery from four hour to four and a half hours, but we have not reduced tariff in this part. Understood. That's very clear. Thank you so much and all the best. Thank you. Next question is from the line of Amit Bhandesh from Axis Capital. Please go ahead. Hello, sir. Am I audible? Yes. Yes. Yes. Yep. Congratulations on a great set of numbers and the revised guidance. Just a few questions. One, in the previous question, you mentioned that you have done a CapEx of around $6,000, and you would do similar probably in the h two. So that's revised guidance of INR 12,000 crores. I think earlier, we were talking about INR 15,000 to INR 17,000 crores. So any closing thought on because of the transmission connectivity or any other reasons?

20:06 Right. So we have done a CapEx of INR 6,500 crores already, right? And we are yet to receive batteries of around, you can say, we have around seven gigawatt hour of battery with us today at sites. And we are yet to receive five gigawatt hour of batteries for which we have opened LCs and they have not been capitalized or they are still part of they are not part of the CapEx. So it will be a substantially higher number than 6,500 crores, which we are hoping to do. And we are also getting modules for sites, which are where we are able to charge these batteries. So we are quite confident that it will be a higher number than INR 6,500 crore. I don't have a ready number with me right now in terms of the H2 CapEx exactly, but we will be able to share with you. It should be higher going by these two things. So in terms of the G and A dependency, right, for battery, we have no G and A dependency because we are only doing battery installation that faces where G and A is available, right? And for modules also, are only doing where we are able to either charge our battery or supply to the grid. So which is a big runway for us because we have a large amount of megawatts, which we can install at places where we have batteries or where we have DNA. So that will not be a limiting constraint for CapEx for us.

21:29 Got it. The second question that I wanted to understand is that you have mentioned that you have done 1.9 gigawatt of partial commissioning of the projects. So if I just take a 25% buildup on that for this quarter, it would mean about thousand million units, and you are best of supplied only three twenty four. So in a way, are we implying that we had around $6.50 to 700,000,000 of curtailment? Sir, sorry. I missed your query. Could you come again? One point... You have 1.9 gigawatt of capacity, which is pre commissioned. Right? Now if I take a 25% year on that, it means about 50,000,000 units generation in the quarter. That is only three twenty four, and we've also taken external purchases.

22:14 So in a way, are we... Is it right to conclude that curtailment was close to around 700,000,000 units? No. No. So how how you should look at this commissioning is you look at the elements which you got commissioned, right? So there is a solar which got commissioned at some places, and there are quite a few places where the solar is not even commissioned, right? It's only battery. So wherever the battery is commissioned, it's purely charging of that battery and discharging of that battery, right? Because the solar is not there, so this 25% CF is not applicable, right? Wherever the solar is charged, there also the capacity is partially commissioned as of now, as mentioned. So there also the let's say, at currently 133 megawatts is charged out of 300 megawatts.

23:02 So for 133, you can benchmark 25%, right, in that specific project. Yeah. And and so we can give you, I think, the next... We can incorporate the exact numbers of where you can match this 25%. Yeah. Because I was thinking the request for that is we can have that in the PPD. As to what is your plan configuration and how much has been commissioned in the operational table below? We will do that. We will do that in the next... We'll do that in the next presentation. Yeah. Yeah. And the last question that I have is, basically, if I look at your q one to q two gross block difference, that's almost about $17.82 gross. Whereas the operational debt that I'm seeing, that is increasing by around 31,000,000,000. So 3,100 plus. So I believe it should be $75.20 or $80.20 when you do it in the... When you recognize that operating debt. So there's a mismatch.

23:54 If you can help me understand the accounting behind that. So, Amit, you are comparing q one FY twenty seven with q two FY twenty seven or Yes. Corresponding quarter... Q one. Yeah. No. Q one q one FY twenty seven is a q o q. So q o to your gross log has gone one... Up from $196,000,000,000 to 214,000,000,000. So that's a seventeen eighty two cross of gross block increase. Whereas if I look at the operational debt increase, that's around 3,100 cross. So ID... I mean, I would have expected a 75 or 25 or eighty twenty kind of a recognition into operational debt when the project gets capitalized. But here, the difference is higher. So we can Yeah. Let me just put up the numbers for your reference, right, so that's clear.

24:39 So in q one FY twenty seven, our gross debt was roughly 20,000 crore. In this quarter, it was up 26,500 crore. It's number one. This is gross log gross log for q one was around 24,900 crore. And for this quarter, it stands at roughly 28,500 crore. Right? Which is roughly in CapEx of roughly 3,500 crore, which we're talking about during the quarter. And the gross debt increased partially because some of the refinancing must have also happened, and the rest of it went into CWI. And the rest of this went into CWI. Question. I'll try to take this offline because the operational debt is appearing more versus a CWIP debt. And some of the debt I know that is about classified as CWI. Yeah. And some of the debt happened at the at the quarter end, which I think is coming as a reflecting as a cash balance in the book, which is INR 10,000 crores. INR 10,000 crores. Yeah. Okay. Just to understand, is is is that... Could there be a possibility that you are taking more debt on the operational asset and funding in some of the equity through that for the CVIT. Is that a possibility?

25:46 No. No. That has not happened at least in in this quarter or the previous quarter. So that that is not the case because, when we typically refinance is when the project just becomes a COD, right? That is when you deserve a top up because the debt equity can move from 75.25% to a higher number. Is not happening to what we have really done is we have taken disbursements early on these FDRG and peak power projects to push our battery CapEx, right? And that has resulted because the as you know, the battery CapEx for us is quite front ending, right? We are already 12 gigawatt hour of batteries. So all those projects, battery debt has come in early, right? And the battery and fees are only open when required. This is a factory acceptance test. At that time, you open a and even though you take debt at the end of the quarter or whenever because aggregate disbursement, they do not on the each and every period.

26:38 So there is a time delay between the disbursement and the utilization of the debt. So that is why you see a complete amount coming in, in terms of gross debt, whereas the CapEx is happening as we open these LCs and we install those batteries or we'll deliver these batteries, that is how it will pan out. So you will see this whole of debt converting into gross block and converting into revenues also because their time scale from installation to revenue is very short in the battery project, and we are only calling for batteries where the G and A is live and where we are ready. Right. Got it. Right. And only one data question. How much units internally were used to charge the best? If you can give that. And second, for the average purchase price of the best that you have recently ordered in q two. I think q one ordering was around 15 gigawatt hours. Now we have 19, so you ordered four gigawatt hours during the quarter. So how has been the rates? Because lithium carbonate prices are going up, and best car CapEx can see upside to the one crore that you have been doing till now?

27:44 So in terms of the best being the solar being used to charge best, out of the one thirty three megawatt, how much is around 700 megawatt hour. Which is around around 80, 90 megawatt of AC. Around So around 90 to a 100 megawatt of AC is being used to... Out of one thirty three is is is used to charge the best, and 33 to 40 megawatt is going to the client. Okay. Got it. And on the... Sorry. And on the best CapEx, you can Yeah. On the best CapEx, of course, we we have done lower than 1 crore per megawatt hour because, as you know, the key difference in the CapEx for us is we are installing best at operational substations.

28:34 Right? So the CapEx for the transformers and the AC infrastructure exists at these plants. So we are not doing the greenfield installation. So that saves us around 20 lakh per megawatt of CapEx. So and that's why we have been able to do between INR 90 lakh to INR 1 crore kind of a number for the CapEx, which we have capitalized on our books. In terms of the going forward, what we are seeing is the lithium carbonate prices have come down, the copper prices have gone up. And of course, the Chinese taxes coming into picture in January, 6% tax is there from export tax. So it's a combination of factors. But overall, the battery doesn't look to be going up at all. It will go down.

29:19 How much it goes down is dependent on the three, four factors we spoke about and, of course, on the supply and demand and various other geopolitical factors. Yeah. Right. Got it. Got it. Those are the questions. This was really helpful. Thank you. Thank you. Next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Yeah. Good afternoon, sir. Thanks for the opportunity. My first question is, sir, are you seeing the change in the breathing environment where the key is floating based off, like, tying up of the power of this comp, and thereby conversion to PPA are happening faster? Is that understanding correct?

30:04 Yes. Yes, please. That is a correct understanding. As you can see in the cycle of our recent PPA, we won a PPA, and it got signed with one of it, and it got signed to PPA around two months... Within two months. So that is absolutely true. And, of course, the selectiveness with which the bids are being coming is also very face worthy, I would say, because they are actually collecting the exact bids they need to do from the states and and coming up with only those bids, whether it is PSP bid or a wind bid or a peak power bid. It is actually cater to only the demand. They are not coming up with bids where there is no customer. And there is a free tie up of customers because, otherwise, you cannot do these two months bid to signing. It is impossible to do that.

30:59 My second question is on the battery. Can I please help us understand the battery PPA tires, which you have done for INR 15,000,000,000 and 60,000,000,000 for FY eight, believe this is the correct number? It is possible to quantify how much of the current capacity you have tied up for h two and FY '28? And and are we exposed to the input price volatility? So for FY '27, we are around 9095% tied up. In terms of what what we can produce, we have contracted. We keep around five, 10% for RTM and RTM kind of a sale. In terms of FY 'twenty eight, we are around 65% tied up or maybe 50% to 60%. We will confirm that number, but around that number is what we are tied up.

31:57 And it is not in terms of the input prices of... In terms of CapEx, are asking, Mohit, or you are asking about the cost of buying power? We are talking about cost of Yeah. Buying Buying power. Yeah. Of course, we don't have any tie up for buying power as of now. So we are, of course, dependent on these high EX prices for buying power. But wherever we are producing our own solar, right, which is a large number, we are more and more reducing that risk because I think by end of March or maybe by June, at at quite a few places, our solar will be fully ready to charge these batteries, which we have at that that the they they have that kind of configuration.

32:45 So our procurement from IEX will reduce substantially. In the next presentation, we will incorporate that also that how much we we will buy from outside versus how much we will have. But we will we will give you that number. Sorry to interrupt, mister Mohit Kumar. When management is answering your question, then we request you to please mute yourself because of the... There is a disturbance, sir. You may go ahead with your questions. Certainly, I'm done. Thank you. So thanks for the opportunity. Thank you. And all the best, yes. All the best. Thank you. Next question is from the line of Shaurabh Arya from Oakland Capital Management. Please go ahead. Yes. Hi, sir. Am I audible? Yes, please. Yeah. Hi. Yeah. Congratulations on a great set of numbers. Yeah. So I have two questions. Why is all your... This strategy 2.0?

33:36 So of course, for 2030, we are seeing now we can do 15 gigawatts. But what we are doing in market is ultimately, you know, great connectivity is the challenge. So then... So for our existing project already, of course, we're not able to fully commission them. So in that context, how realistic the 15 gigawatt are... 15 gigawatt target? If you could go from it. Yes. Yes. Sure. Yes. I think, see, as you must have noted from our strategic plan, which we have also mentioned in the presentation, we are focusing more on the revenue generation possibilities and the absolute megawatt number. I think you have pointed out really well that we are not first up about anything. So sorry to interrupt you here, sir. Mister may be requested to please self mute your line while management is answering. There is a disturbance coming from your line.

34:32 Thank you very much. Sir, you may please go ahead. Right. Right. Right. So in terms of the in terms of the strategy, we were just explaining that the strategy is more about, of course, in terms of the numbers. Right? In terms of revenues, we can generate the profit we can generate, and and, of course, the base at which we can grow. Right? So in terms of our strategic alignment, we are fully geared up to grow at a very fast clip in terms of both of these. So how we achieve these gigawatts and how we achieve these crores is of course linked to the connectivity we have, right, which is more than required for this 15 gigawatt.

35:18 And the time lines of these substations, which is also very well in planning and very well in delivery. So 15 gigawatts is not at risk in terms of the G and A connectivity because the substations we are targeting for these 15 gigawatt have a timeline of 2028 at at at last and maybe early two thousand twenty nine. Right? So the delays we see in these substations and and now the substations are coming up with a timeline of thirty six months, thirty months. That is the extension already being done by CTU or or the MOP in terms of the planning, which is a very, again, a very good step they have taken. So even if you factor in a six months delay or a twelve months delay, we are within our goal of achieving this capacity.

36:08 And in terms of the best capacity, again, we have enough connectivity for doing those best projects we have spoken about. The main thing, I think, Shariah, which we are working on and keep working on is the customer, right? So to have the demand for such projects and to be able to do these projects. So what may happen is we may do, let's say, a 17 gig award and a higher amount of best, right, which is entirely likely going by the amount of peak power deficits, which is coming, if you notice the tender, which Ankit spoke about, right? So it is a higher amount of peak power, which is needed. And in terms of revenue realized per megawatt, it is much higher, right? The profit realized is also potentially higher.

36:54 So it is in terms of connectivity, in terms of the demand, of course, they are there. And we see good demand coming up because as you see the power prices in India, So people have realized that you have to go full steam on all the sources and not choose a particular source. So thermal may come up, right? Renewable is also coming up with firm demand backed up and peak power is also coming up. So we see that a lot of bids are coming, which are very rightly designed and which capture through the real demand. So we don't see a from all these three perspective of connectivity tie up, the demand availability and of course, in terms of our execution abilities, we don't see a challenge. And that's why we have upgraded.

37:42 Because what we noticed is we have already 8.5 gigawatts of PPAs, right? And and we are going to participate in more than three to four gigawatts of PPA very soon. So we noticed that if we get those PPA done by end of twenty seven or so, we will definitely be around 12 gigawatts of capacity by 2029. And if we assume something in, let's say, a lot of best we are doing for which there is already customer available, there are a lot of states which want to buy those peak power projects. So it is very I think very safe to assume that in terms of contracted capacity, we can go reach there by 2027 in terms of tie ups. Of course, the execution will go on till 2009 and 'thirty. But in terms of PPA tie ups, we can go there by end of next year, calendar wise.

38:33 Okay. Could you you throw some more, like, you know, on this 10 to 15, of course, so so incremental the six gigawatt. So how much of this you are thinking on data center, hydrogen molecule, maybe from your own ACMICLEAN that they are... Their their plans are also going pretty pretty ahead. So if you could divide it, will the nature of the business change from current, you know, PPAs with state... With these, you know, central utilities? Or or... If you could design? Yes, yes. No, that's a good question. So in terms of the overall growth we are seeing in terms of demand centers, we don't see a change in the nature of the customers for us.

39:21 Of course, there will be incremental demand coming from various other sources, including what you mentioned, data center, green ammonia and multiple other demand areas. But our primary source for capturing this would be these AAA PPAs with these counterparties like SECI and TPC SECI primarily now and of course, state governments. The addition to this would be state governments, which is entirely there. And of course, we will participate in the SECI bids, like SECI is procuring power for green ammonia projects also. So there, feeder to SECI is increasing. Whatever sources you mentioned in terms of data center green ammonia, SEC is also catering to demand for these sources also. So in terms of the conduit for us to get these PPAs, so that will remain a AAA counterparty, and that is what we want to achieve. And we don't see a shortage of these bids like we mentioned.

40:17 We have sufficient bid to take it from 10 to 15 gigawatts. We are already at 8.5. So if you see if we kept it at 10, right, we are at 8.5 already in '26. So that doesn't show any growth in terms of our contracted capacity for the next two years in terms of bids one and PPA signed. So because we have been winning projects through the rate of around 1.5 gigawatts every year for the last three, four years. So I think even if you project it like that, we are bound to reach that number. And we see a great increase in these bids coming up because of the shortage of peak power in India. And that is playing out in terms of prices already. So we see that 10 to 15 gigawatts, an incremental five gigawatts capacity being won by us in the next eighteen months, twelve to eighteen months for sure.

41:07 So we are not factoring anything from Acme CleanTech in this? Or that is also part of Yes, yes. We are not factoring in anything from the Acme CleanTech. Of course, we are it could increase this 15 gigawatts further. If Acme CleanTech were to, let's say, buy power for the green ammonia or or or for data or for any other sources through SECI or for... Through any other agencies, we are not factoring in that in this 15 gigawatts.. Okay. Fair enough. And second is... So, of course, what we all expect is, you know, these spreads of BEST will go down over two years, three years. And what matters is at what pace the new BEST comes into the system.

41:55 And here, we see you, yourself are, you know, putting so big best numbers. So so what do we expect about them the best spread? Should they narrow very quickly? Because let's say, I don't know what is the reason, but Q1 to Q2 itself, it is down. That might be from a different reason. But two, three year end, then how to think about this particular market from a trade perspective? So if you look at Q1 to Q2, right, and if you look at the prices we have signed up for this year and next year, they have substantially gone up, right? In terms of the delivery, those contracts were already signed, right? In q one, we can't... We we actually don't wait. Right? We wanna reduce risk. So what we do is we we sign for, let's say, next two quarters. And these projects, these bids are also for next six months. They are not for, let's say, fifteen months onwards. It is six to twelve months maximum they are. So the Q2 contracts were already signed. So the tariffs have not moved from Q1 to Q2. They were already contracted, right? We can tell you our tariff for Q3 also, right? So they are already contracted.

43:09 In terms of the new bids we have won for, let's say, Q4 or Q1 of next year, they are substantially higher. The tariffs are substantially higher than you can say what we have realized so far. So it is dependent on how the states are feeling about their power demand in near term because these are near term bids. And structurally, let me tell you, there is a big shift happening from RTC procurement, which is a thermal procurement or a gas procurement to best procurement. Because like we said in our previous conference call also, this is a new form of power. BEST is a new form of power, which has developed trust with now maybe 10 to 12 governments, which maybe our peers and us have supplied to. So people are more and more confident about shifting their near term power mix from RTC to batteries.

44:05 So you will see that a lot of new demand is being created. In terms of tariffs, of course, the RTC at INR seven or INR six is much more expensive than best at INR 10 because you are buying unnecessary volume of power, which you don't need to during the day when you contract out this RTC, and that volume is huge. Basically, the 85% of the near term power is is RTC, right, which is waiting to be disrupted. Thank you. Next question is from the line of Sanuk Gopalay from SBI Life Insurance. Please go ahead. Hi. Thank you for the opportunity. So I wanted to understand what's the capacity addition target for FY 'twenty eight in megawatt terms, 'twenty seven and 'twenty '8?

45:02 So in FY 'twenty eight, in terms of the G and A availability, we are looking at upwards of three gigawatts, Around two and a half to three gigawatts is what we are looking at in FY '28. Because, Sean, in terms of the... We are seeing all of our substations coming alive during that particular year, And it is aggregating around that. You'll see from June to December, bulk of our substations are coming alive. If you look at most of the substations date today, that is where they are. And of course, they are they are with some delays, so we are very confident that there will not be further delayed because the elements are ready and and the work is happening at a very good pace. So that's where we are.

45:51 Okay. And what about 27? Because I guess, initially, it was 2.5, but when I was looking at the PPT last quarter. So around, I suppose, 700 megawatts was only the capacity, which was basically the substations were ready for the timeline, g and a timeline that's from the PPT. So it was around 700 megawatts. So what is the status of that? Because if you see in this quarter, we haven't commissioned any project and H1 capacity addition is around there is no capacity addition this H1, right, if I compare with the two quarters. So So, Shana, when we look at the capacity addition, we look at the elements we have charged for each of these projects, right? So and you we have laid out in our presentation, and we have partially commissioned around 1.9 gigawatts of capacity so far out of total under construction portfolio we have. In that 1.9, have partially commissioned solar at two places and battery at around two...

47:06 Four places. So and all of these projects are under those and excluding one project, which is ACMESOLARODA, all of these are under PPAs, and they are generating revenues. So in terms of if you are, I think, mentioning about the generating capacity source, which is the solar, right? If you're tracking only that, that or in terms of the contracted capacity, we have operationalized 133 megawatts of grid facing solar, right? Of course, the that is what we have done in this quarter. And of course, in terms of the commissioning targeted for FY 'twenty seven, it is depending on the particular to operationalization.

47:51 We we could do 1.5 gigawatts still. But, of course, it could move to a quarter, you know, by June or something. But 1.5 gigawatt is what we are targeting for FY 'twenty seven. Okay. So on the financial data query, if you see your interest cost has been flat for the past two to three quarters, but we have so basically, what's the reason for that? Because we have commissioned batteries already, depreciation is increasing. So basically, INR cost also should increase, right? Right. So there are a couple of reasons for that. One is that we've done a QIP raise, right, of around INR 2,800 crores. So that has, of course, resulted in us paying down some of the debt, which has resulted in saving that interest cost, right? That is one of the key reasons.

48:43 And the second thing is some of these cash flows we are generating from BEST. Right? That is also saving on the debt drawdown from our side that we are able to use it as equity, and we are not able to... We don't increase... That is increasing the internal accruals available to either pay down debt because we are paying down debt from these internal accruals also and not incurring the interest cost. And we are drawing down less debt because these accruals are to be used for CapEx or for debt reduction. And in some cases, lenders have allowed it for using it as equity also. So that is resulting in us keeping a flat. The third thing is we have refinanced higher interest rate bond. Right now, we don't have any dollar exposure in the overall book. It is 100% rupee, and that has resulted in substantial interest saving in in this quarter for us. So which will continue to be there going forward. So these are the three, four reasons we have.

49:46 Okay. And sir, just one question. Even I was looking at the other expenses, so for the past two to three quarters, it was a bit higher. This quarter, it is as compared to the last quarter, it is around INR 45 crore. So is there any specific trend I have to look at it or how to look at it? Arun, what did these other expenses include? So other expenses basically include the O and M expenses, which we don't necessarily need, sir. So this is on the higher side in the last quarter.

50:33 But, generally, it remains static, you can see on a quarter to quarter basis. So this ROC, which I'll just explain, it is basically when you when you put equity in a company, you have to pay a fixed ROC fees for issuing share capital. So that is very lumpy, and it only comes whenever it... When you start doing a project. Yes. So that that keeps it kind of lumpy. If... I think maybe we can have a line item showing this or or in schedules, we can show this, yeah, as a onetime expense. So that will help you to predict it on a quarter on quarter basis if you want. Can you just repeat what what was that onetime expense? I I don't know. So ROC, the start of companies, you know, the... When you when you put share capital into a company When raise your capitalized capital, you'll have to pay an ROC fee.

51:21 So that ROC fees, when you start a project, you... How much is it typically? Goes from a limited at 2.5 crores. Yeah. Yeah. Around 2.5 crore for SPV, you need to pay that. So that increases... When you... Whenever you start putting equity in a company, right, you need to pay this 2.5 crores. So that... For SPV. So that keeps it slightly unpredictable to that extent. Next question is from the line of Apoorva Bahadur from IFL Capital. Please go ahead. Hi, sir. Thank you for the opportunity. A couple of questions. One is on the partial commissioning of projects that we have done.

52:06 So would be helpful if you can explain how do we sort of so do we like capitalize these assets and start charging all the expenses to P and L? Or they are still capitalized on balance sheet? So,, wherever we are selling power, we have expensing out because we have capitalized and and the rest is... Wherever we are not selling power, it is not not yet capitalized. So the solar which is used to charge your batteries, would that be capitalized or it's gonna be bad? That is that is is capitalized completely. Yeah. Wherever... So even the... So, see, we are selling power means we can send to the grid or we can send to our own best. Right? In both cases, the sale is being made from that SPV. So wherever the sale is being made, we are we are capitalized.

53:00 Right? And I think wherever we have said partially commission, they are capitalized. Understood. So, sir, gross block already includes them. It's no longer in the CWIP? Yes, yes, yes. Exactly. Understood. And secondly, on these new PPAs which we are signing, I believe that they will be under the ambit of ALMM-two now. So how are you seeing the pricing for DCR ALMM-two compliant modules? What's your view? When would you tie up for these? Would it be this year or next year? Right. Right, Apoorva. So we have plans of buying modules for these projects from, you can say, June onwards of next year. So because these are commission targets from December onwards, December to March '28, those are the time lines for commissioning these projects.

53:55 So the we have done some initial negotiations and discussions because we don't intend to buy immediately. But of course, we have whatever briefings we have done, we are getting prices of lower than 17 as of now, but it is very dependent on the various factors. But so we are substantially within the prices we had assumed in terms of bids for that. So that's not a risk we see. Of course, given the Chinese regulations, which have come into force in terms of the recent Chinese regulations. So if it impacts the selling capacity in India, then we will have to see, but it doesn't look like there's already substantial selling capacity, which has come up or which is ALM registered and which is already there. So we don't see these prices increasing because of shortage of suppliers.

54:52 So that... We think that because of that, the prices will not increase. Okay. And and connectivity for for all these projects, we had to declare them before bidding, or is it like we will still have to wait for CTU commission those substations and only then? So there could be a deferral in further setting up these capacities? No. Actually, see, on... In these... Most of these projects are big power projects. These ALMM... If you are only talking about ALMM two or you are talking about all projects? The the the recent ones. So the ones which we have, say, signed PPA this this So quarter so most of these projects are big power projects. We are already installing where GNA is almost operational. So there is no GNA risk because these big projects are actually very immune to GNA delay because we typically install them at projects where GNA is live.

55:49 So in a lot of our book, there is no GNA dependency delay because they are operational. So most of the feedback projects we are doing, the GNA is operational. So there is no risk to these timelines. Other than maybe, you can say, RTC project or a RMCL, wherever you need to install a grid facing solar project, there you are more dependent on the G and A being getting delayed. But in FEEDPOW projects like the ones where the battery is supplying power to the grid, there is from our side, there is we allot such that there is no delay possible in those projects because of G and A. Okay. Just last question on this peak power projects. I think one of the recent projects we have signed it up tariff about INR 6, where we have to supply during peak hours, and we also have to arrange for the charging part.

56:41 How does the math work at 600 itself would be closer to INR 4.5, right, 12% IRR. On top of that, the cost of charging. So what type of equity IRR are we seeing over there at 6 rupee tariff? Right, Bhuvan. So in terms of that project and the resultant economics of it, so there are a couple of things in terms of the early commissioning. Right? Because as I mentioned, we have we have allotted these projects to an operational G and A. So for us, the solar takes time to come up, right, because of out of the blue issues, because of the land acquisition issues. But battery comes up for us fairly early. And as you see, we have pre owned a lot of these battery commissioning.

57:29 So in terms of the battery commissioning, the battery will come up earlier for these projects. And of course, we... Since the PPA signed, the debt is available as well. So there is early commissioning revenue, which you realize out of these projects out of this project because specifically, it is available to self power today. So that's the key difference between our earlier projects and this project. Of course, it is dependent on the competition. Right? Nobody likes to reduce their returns. But in terms of fee, we make a high team return on this. Even if we factor in, you can say, six to twelve months of operations of short term power. But we will, of course, have around twenty four months. So maybe we will do higher than that.

58:17 Fair enough. Thanks a lot, Nikol. All the best. Thank you. Thank you. The next question is from the line of Dhruv Muchal from HDFC Asset Management. Please go ahead. Yes, sir. Thank you so much. So you made a comment that 85% of near term is RTC and is waiting to be disrupted. I didn't get that point. If you can please expand on that. Yeah, Dhruv. So basically, in terms of the terms of the deep portal, there is a deep portal as you must be aware with. And this comes procure short term to medium term power. Right? So the volumes in that deep portal, 85% of them are through thermal RTC kind of tenders and only 15% are through, you can say, gas or other sources.

59:06 Right? So that is where we were saying that this 85%, right, because there are no availability of other sources, that was the trend. Because people are buying... Like, we see a lot of states buying this RTC power when they only need peak power because there is no other source available. Like you saw Gujarat. Right? Gujarat used to buy a large amount of RTC power. But this year, you see Gujarat bought a large amount of peak power. So that has reduced their RTC purchase volume of these short term and medium term power. So that is what I was talking about. Perfect. I got it. So the second thing is in your presentation, mentioned 50 gigawatt of peak power bids rolled out by till September 27 and twenty plus gigawatt of upcoming tenders.

59:55 This large is quantum. So in your assessment, is it backed by state demand or like previously SECI and others used to just roll out tenders without any demand assessment? So I mean, you might have done some work around this. Is it backed by state demand or how is it? Yes, sir. Primarily, it's state demand only because SECI doesn't have demand of its own. And of course, we are working because now we are selling power to a lot of these states on short term basis. So we have a big understanding of what they need and in what time frame. So what we have done is mapped out their demand in short term, medium term and long term. So what we realize is in a short to medium term, there is very high demand for peak power. Right? So there are a lot of five year PPAs. There are a lot of people are trying to contract out some of these PPAs expecting their thermal to come up or expecting their DSP to come up. Right? Or expecting these slow... Slowdown in the demand. And some of the states are rightfully looking at twenty year PPAs also depending on each state. It varies from state to state. But everybody is short on peak power, and nobody wants to be dependent on the weather patterns to assess their demand and also depend on other capacities to come up. And they are impacted because of G and A delay. As you must have noticed, a lot of these states are impacted because the plants are not coming up because of G and A delay in short term. So they are very skeptical of the commissioning time line, that is why they are contracting all surplus power then maybe

1:01:25 dependent on maybe looking at their plan, they may be contracting out surplus than what they may need or may not need. So that is where states like Chattisgarh, Odisha, like Bihar, Telangana, if you notice, large amount of bids have come up from Telangana and now with the Chattisgarh, Andhra Pradesh. So a lot of these states are coming up with their own bids, Of course, and in our SECI bid, states like West Bengal is buying, and a lot of other states are buying because everybody is short on peak power. They don't have a firm tie up for their peak power, Right? In terms of solar, they are... Some states are surplus. You are right. That is the case. But nobody is now installing solar and and sending it to the grid. Everybody is converting into peak power, and that is the intent with which the states are also buying power. So all the states if you notice, there is a recent SECI tender, which has come up today only, which Ankit also spoke about. That's a 16 gigawatt hour tender, four gigawatt into four sixteen gigawatt hour tender, and it is coming up with a VEGF, and it calls for a twelve months commissioning, right? And that is purely looking at the power situation prevailing today.

1:02:40 And it caters to somebody who's ready to supply power because they want to promote the battery installations sooner than later because that is where the issue is in terms of procurement power. And that is where the trend will go in terms of the procurement, and that is where we see the shortage. So the pure solar, the conventional method of seeing that solar base and all that, that is no longer true. And that is why the megawatt hour is something like are also there. In terms of RTC, RTC at 5.25 is again a very competitive bid, which happened at SECI, which is currently being sold. So that will also... Once it becomes a mainstream and people are able to commission that plant. The issue with some of these bids is the plants have not got commissioned.

1:03:26 Right? But... So so once these plants come online with the G and A going live, I think the belief in these PPLs will also go substantially up. And then you will see a lot of procurement happening from from these kind of RTC also because it's it's very competitive, right, in terms of the price. It's much more competitive than a thermal or any other source. Right? But in terms of the awareness, it is building up, and that is where you see Telangana kind of project states, which believe... We we have come up with this RTC and peak power project bids. So more and more states are picking this up. And and in terms of competitiveness, it stays. Right? Competitiveness stays for all the three sources of renewable solar, wind and battery. And of course, PSP also in certain context in terms of life of the project and the stability it provides. So I think the fundamentals are strong. So states are buying.

1:04:17 Is it has shifted to a lot of demand has shifted to states. And now we understand that a lot of aggregation will happen at the central level for these peak power. SECI has already come up, Maybe some other agencies will also come up with a similar bid of a large quantum of battery procurement. Sure. Sir, one quick question. Is your generation has grown by about 20% ROI. Your capacity is almost flattish. And I see your PLF has improved. So is it just trying to understand, is it repowering that which is driving such a massive increase in the generation? Or is it the partial commissioned assets are also included in generation now? So there are two reasons for it. One is, like you rightly said, the capacity has increased and also the repowering has increased. And then the third of it has come up online. As you see, it has done around 41% COF in this quarter, right? So introduction of because wind was not there last year.

1:05:17 150 megawatts of wind is there, which is contributing significantly to the average COF. And of course, I think that's the main reason and then the weather pattern is... So is the repowering a big element? And last year, sorry, our Seeker plant was not fully operational, which became operational on a Y o Y basis. So that actually in the last year, it was contributing less. So if you look at the next quarter after that, it will be much less steeper growth curve. Got it. Got it. Great, sir. Perfect. Thank you so much. You. Ladies and gentlemen, we will take that to our last question. With that, we come to the end of today's conference.

1:06:04 Sorry. I I just like to correct one query. I think Puneet asked about the reduction we have shared in the in the new... Newly signed PPA. So there was... There is around 33 paisa reduction out of which 11 paisa is tentative change in law and 20 paisa... 22 paisa is voluntary. So I think that's the broad reduction in the in the tariff for the NTPC PPA. So just for everything, the French side, I pointed out. I don't know whether Kodis is there or not, but I think I'll just clarify. Thank you. Thank you very much, team. Ladies and gentlemen, on behalf of ACMESOLAR Holdings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.