Adani Green Energy (NSE:ADANIGREEN) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Adani Green Energy Limited Q2 FY 'twenty seven Earnings Conference Call hosted by MK Global Financial Services 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. Please signal an operator by pressing star then 0 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference call over to mister Sabri Hazarika from MK Global Financial Services Limited. Thank you very much to you, sir. Good morning, everyone. And on behalf of MK Global, I welcome you all to the q two FY twenty seven post earnings conference call of Adani Green Energy Limited.

0:54 We have with us the top management from the company led by Mr. Ashish Khanna, CEO, Adani Green Mr. Rajat Sekhsarya, CEO, BESS Saurav Shah, CFO and Vigil Jain, Head, Investor Relations. So today's session would be opening remarks and update on the performance by the management followed by the question and answer round. Now without any further delay, I would request Mr. Khanna for the opening remarks. Over to you, sir. Thank you, Savi. Good morning, everyone, and thanks for joining this call on our Q2 FY twenty seven results. As we know, India's energy transition is gaining unprecedented momentum as the country rapidly scales renewable energy and electrification to strengthen energy security and advance its decarbonization and sustainability goals.

1:48 With about 308 gigawatt of installed non fossil fuel capacity representing more than 54% of total installed power capacity, The country is progressing rapidly towards the 500 gigawatt target by 2030. India's peak electricity demand continues to reach new highs, reflecting rising consumption driven by industrial growth, electric mobility, data centers and the broader electrification of the economy. Against this backdrop, Adani Green Energy delivered another strong performance in H1 FY twenty seven, crossing the significant milestone of 20 gigawatt of operational capacity. Our 20.8 gigawatt portfolio supplied clean power equivalent to the needs of more than 4,400,000 homes, while helping avoid 17,500,000 tons of CO2 emissions during the period.

2:49 Our operating and financial performance remained robust. Energy sales increased 32% year on year to 25,700,000,000 units in H1, supported by a 24% increase in greenfield capacity additions on Y o Y basis. Revenue from power supply in H1 FY twenty seven increased 36% year on year to INR 8,299 crores, while Avita grew 41% Y o Y to INR 7,957 crore, enabling us to deliver industry leading EBITDA margin of 93%. The total EBITDA during H1 FY twenty twenty seven was INR 8,276 crore.

3:40 If curtailment would not have been there, this EBITDA would have been close to INR 9,000 crore. The performance during quarter two was equally strong with revenue from power supply increasing 45% year on year to INR 4,019 crores, while EBITDA from power supply ending 51% higher Y o Y to INR 3,835 crore, resulting in strong EBITDA margin of 92% during the quarter. Energy storage is becoming the next major pillar of our growth. During the quarter, we commissioned three gigawatt hour of battery energy storage at Carbon, taking our total installed storage capacity to 6.6 gigawatt hour.

4:34 This capacity accounts for more than 50% of India's operational best. We remain firmly on track to exceed 10 gigawatt hour during the year. While our maiden 500 megawatt pump storage project at Chitravathi is also progressing towards its completion by year end. At Kaunda, the world's largest renewable energy plant, we have commissioned 10.8 gigawatt hour of solar wind and hybrid capacity. Our focus on technology, digitization and advanced analytics continues to support high asset availability and strong operating performance across the portfolio.

5:23 Looking ahead, we see significant opportunities emerging from growing needs for firm and dispatchable renewable energy, rising power demand from AI, data centers, and hyperscalers alongside growing demand for integrated renewable plus storage solutions from commercial as well as industrial customers. Our investment in BEST is also helping mitigate curtailment challenges at Khabda by providing greater flexibility in managing renewable energy generation and enabling the utilization of power that would have been otherwise wasted. We will continue to closely monitor the developments on transmission infrastructure availability at Khamdah. And at the same time, we have significantly accelerated the development of BEST to insulate ourselves from delays, if any, on transmission network.

6:20 We remain focused on disciplined execution of our INR 2.4 lakh crore CapEx program through FY 'thirty, backed by securing new capacities under long term contracts and prudent capital allocation. We remain committed to maintaining 13% to 14% ROA threshold by tying up capacities with AA plus counterparties. At AGL, we remain neutral from counterparty standpoint and will pursue opportunities that deliver high returns while offering long term contractual visibility and desired credit quality. On sustainability, AGL retained its number one global ranking in alternative electricity subsector by FTSE Russell for the second consecutive year.

7:18 Our carved up best project was also recognized as the largest project of the year at India Energy Storage Week twenty twenty six. Additionally, our Chitravathi, Nangaikota and Tarali Pump Storage Project received the Best Construction Safety Excellence Award at the IBC SAFE India Conclavement Awards. As India's power requirements grow, our strategy is clear. Combined renewable energy at scale with storage, technology, and disciplined execution to deliver most reliable clean power. Thank you. Sir, shall we open the floor for q and a now? Please do.

8:04 Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press 2. The first question is from the line of Mohit Kumar from ICIC Securities. Please go ahead. Good morning, sir, and congratulations on a very good set of results. My first question is, sir, can I just talk about the transmission asset commissioning, especially in Kala region, have you seen any acceleration from the power grid side or the other players to activate this commissioning so that they will lesser and lesser the curtailment as we go forward?

9:03 I think... So thanks, Mohit, for your question. I think we don't have any doubt about the credibility and the capabilities of whether it is AESL or power grid on execution of these transmission lines. And we are monitoring it very closely too. I think there are certain things which are not helping them with respect to ROW issues. I mean, they are working very closely, and both the state and central government has a lot of focus towards it. From our side, while it is out of our control, but we closely and very closely monitor it and are aware of all the efforts which they are taking. So understood.

9:50 I'll take it offline maybe. The second question is what is your target for commissioning this fiscal? And how much of this capacity will be tied... Is tied up on the C and I? See, we originally have at the end beginning of the year a target of 4.5 to five gigawatt, which we shared with you. And from our side, you first asked the question on the point of a transmission line. So let me say that we were earlier expecting this to come by the end of this year. Now we are expecting this transmission line of Phase three, the evacuations to come by the next quarter. That's where we currently look at it. Now we are fully capable of commissioning the projects as in when this transmission line comes.

10:41 I will share with you that in the learnings of the past which we have is that we have invested fully and are now working on completing all the infrastructure and what we call the balance of system from our end so that whenever there is a certainty of this transmission corridors of being available, we would able to very quickly deploy our modules and commission our project. So we still believe that if this corridor comes by the end of this next quarter, I mean, quarter four, we will be in a position to commission 35 to five gigawatt. Understood, sir. And sorry, is it possible to share out of 4.5 gigawatt which you commissioned, how much of this capacity will be tied up in C and I? And do we still maintain the target of installing 10 gigawatt of battery, if I'm not talking, 14 gigawatt of battery by the end of this fiscal?

11:47 So we are very committed to not only commission the 10 gigawatt by the end of the year, but would be definitely able to surpass it too. But, yes, we are very confident of achieving it and also surpassing it. Regarding the C and I business, that's... I think we, in the past also, in the last quarter, have clearly said that the way we are working is and what is required for this company for our capital expenditure and for our growth is to have a sustainable partner who are there with us for next twenty five years. Our return on our investment comes on 13 to 14% of ROA, and that is where we stand.

12:36 On this long term and this double a plus partners which we look at, AESL is definitely one of the companies which which is there, and that's sort of a strategy is. But we keep on looking for organizations which give us a return. In the past, it has been AESL. In the future, it could be them too on that matter. But we are very clear from our side. Like I told you, we are firm on our return on our assets in 13 to 14% and looking for a long term tie ups of twenty five years with all our assets. Understood. Last question, sir. What happens to the payment and the curtailment for your PP and the C and I? See, when we... All our PPAs are on a take or pay basis on the supply, which we give it to them.

13:36 And curtailment... Whenever there is a curtailment from the grid to us, specifically being asked, we are paid for it as a deemed generation. For all the PPAs. Right? For the PPAs between us, yes. Understood, sir. Thank you. All the good. Thank you. Thank you. Next question is from the line of Neeraf Shah from GC Holdings. Please go ahead. Yeah. Good morning, sir, and thanks for taking my question, and congratulations on our recent operating performance. So one broader level question is on the interest rates. I mean, we are seeing a surge in yields across India and globally. So on this related matter issue, I mean, how are we... Or what steps are we taking to minimize the overall impact of this surge in yields as well as how do we see our interest rates moving from the current 8.9% whenever the next reset happens?

14:35 And also, I mean, on the rating portfolio, I mean, what efforts are we further taking to ensure this thing? I mean, the minimal impact. Thanks. Thanks. Thanks, Niru, for the question. See, from Adani Green perspective, 72% of our loans, project loans that we take are all fixed rate for a medium term to long term. So, like, between three to five years, we are fully fixed. So the rate cycle effect does not happen for a very substantial portion of our loans. Also, other than that, what happens is that because we are into a twenty five year fixed rate PPA scenario, a small cycle change does not affect the overall returns on the projects. Thirdly, what happens is that from the credit perspective, our credit rating works in a way that during under construction, we are given a rating which is in generally between triple b minus two a category.

15:34 When we are operationalized, as soon as we get operationalized, that rating generally moves to a double a category. And once that rating moves to a double a category, you easily get a 50 basis points reduction. So what happens is that every notch increase and see very recently one of our SPVs, which does the news... I'm very happy to share that the news has come yesterday night. One of our SPVs, the AG twenty three l, which is nearly 15% of Adani Green's overall EBITDA, has now become a triple asset. Now when that, something like that happens, which is like a seven notches increase in the last five years in that entity, what happens is that the rate of interest which was earlier at... Near to 10, 11% has gone down to today at 8.4%.

16:25 So similarly, every notch increase gives us a rating reduction... Increase in the rating and reduction in our interest cost. At Adani Green level also, in the past seven years, if you will see, we have been at 11.1% in 2019. Today, we are at 8.9%. Now this reduction of nearly 200 basis points, which has happened more than 220 basis points, which has happened with whatever rate cycle changes have happened in last seven years. In seven years also, the rate cycle has gone up and down. So it has not changed for us. Our rating... Interest rates continuously goes down. See, when we are today at 20 gigawatt of operating capacity, doing five, seven, eight gigawatt of construction, and with battery also we are doing more construction today. We... Our under construction portfolio still is about 30% of our overall portfolio.

17:23 Now once we reach 30 gigawatt of operating capacity, our under construction portfolio will be 20% or 10% of our portfolio. So what happens is that under construction only the interest rate has a very larger impact. Otherwise, it starts to taper off. So this, from our perspective, we see that the transition to more and more operating capacity with a twenty five year PPA, there should not be any major impact on our interest rate cycle. Even with the interest rate cycle going up, the... Our interest rate should not be affected much. And with... And just to repeat, as with the seventy two to 73% of our portfolio, being a fixed rate portfolio in a medium term range of five years, it doesn't impact much. Yeah?.

18:12 Got Got Yeah. Yeah. Thank you. Absolutely. I mean, that's that's very heartening to hear. Especially it alleviates a lot of investor concerns regarding the interest rate impact on us on our operations. And sir, second question is on the evacuation. So you just mentioned in the earlier question that seven gigawatt line is commissioning our fourth quarter of financial year compared to third quarter. There was another seven gigawatt line. So is that on track or it's pushed back by one quarter? That is also, as we speak, has been further... Looks to be delayed on that particular part. But currently, are more focused on this first one because most of our evacuation and our investments at Kavda is going through this particular corridor.

19:01 So that is where we are now more focused on. See, there are two things which we have done, Nilu. One is that we have focused not only on the getting the lines too. This seven gigawatt gives us the full DNA capacity. So this entire seven gigawatt is coming to us in that sense. And out of that, the existing whatever the curtailments are will be removed, and plus we will be able to execute more on that capacity. Secondly, we have accelerated our best development in a very big way to ensure that we don't fall... The the curtailment impact are lesser on the company. So we will see that in the second half of the year, the curtailment impact should not be as high as the earlier half because of the accelerated development on the batteries that we are doing. Yeah? So if I can just add on this, if you look at it, you know, with with respect to...

19:59 There has been, like we said, challenges on it. First is we are closely monitoring it, but, yes, more importantly, our accelerated efforts on the battery storage is also helping us to mitigate to a large extent that curtailed power from in particular, and that's what we have been doing. Got it. Great. Great. Thanks, sir, and wish you all the best, sir. Thank you. Thank you. Next question is from the line of Anikat Mittal from SBI Mutual Fund. Please go ahead. Yes. Thank you. Actually, I had a question on on batteries and given our strategy of derisking battery through long term contracts.

20:51 I wanted to understand what is the current, you know, tire that we have on the C and I front with respect to solar, wind and batteries. And just from a three year perspective, we look to install, I think, about 10 gigawatt hour every year. What's the amount of battery that you think will install? Correspondingly, how much solar and wind will be needed for the overall C and I demand? Understand. Ankit, we don't differentiate between a C and I demand or any other demand. We are a developer who has a long term tie ups, whether it is b to b or b to g per se, there is, as a developer, a business opportunity to have battery in place and then have a long term tie ups from... Whether it is further used on a C and I basis or even with the...

21:45 Like I said earlier, we are very clear in our why are we putting and what we are putting. We are installing batteries because, of course, there is a there is a demand for a peak power as well as for RTC. But more importantly, we are looking at it as a long term asset to us, which gives us 13 to 14% return on a long term basis. I think this we have emphasized quite a lot. And with organizations, whether it is a government organizations or it is a business house, which can meet our requirements of being at least a double a plus and have a solid PPA on the terms of what is there like SECI on those terms and conditions. These are the parameters on which we work.

22:32 These are the benchmark which we use. Like I said, double a plus organization, terms and condition, like SECI PPAs, and a twenty five year agreement from that. Now with these parameters in place, whether it's government discomb or it is organization like ESL, we go ahead on this basis. I hope I have been able to clarify to your question. And on capacity, I just we are definitely looking for this year, like we said. We already mentioned, we have committed 10 gigawatt hour. We have already reiterated that because there could have been a transmission corridors which are taking some time, our efforts towards battery and the CapEx has been now more infused out there too.

23:23 With the result, we are very confident of surpassing that particular target, which we have already shared with you. Just a clarification on the 10 gigawatt hour that is coming up, how much of that is tied up in long term contracts? Currently, have 3.3 gigawatt or 8.5 gigawatt hour, which is already tied up. The rest, since it has just come at the end of this last quarter, we are in the process of doing it. I think I missed your earlier question that's been reminded of that how much solar or wind or other input power is required for it. It is already available with us. We have no challenge as well as the solar and if required, ring for an input power for that battery storage. Got it.

24:08 The other question was also on the solar CUF that you've reported. So if you look at one inch to one inch, we've seen a dip to about 23% versus 24.8%. I'm assuming a decent part of that would be curtailment related. If you could just provide some color on that, what's the amount of curtailment on a like to like basis, what this number would have looked like, that would be. I think it is majority, you have guessed it very right. It is primarily on account of the curtailment too. Well, there are always a seasonal change for that matter, which is which is there. But when you look at a six months horizon, yes, it is predominantly on behalf of the curtailment too. Otherwise, our plants are operating very well on that matter. There has been no challenge.

24:56 Or in fact, we have been working better if you look at it from the operational efficiency standpoint. So let me put it in a more elaborate manner. If this year depends on my plan capacity utilization factor, which will depend on the resource on which it is coming, also how much I have been able to evacuate. The resource part of it is more or less same, if I say that. It has been slightly better this year, which is also reflected on our revenues as well as profit. And, of course, we have grown from last year to this year half yearly. But in the same manner, because we have grown and there has been a curtailment, which is more than the last six months, the CF has been debt. One this... Once this evacuation corridor is available to us, we would be having this QF, which is worthy of what we should be with the resource in place. See, any case in our twenty five year profit for business or project business, one six three to six months here and there on curtailment will not have a very major impact on the return on effect on an effect. So from our perspective, yes, there has been on a quarterly basis a small blip again from the perspective. But what what happens is that this blips we were in some extent, we were aware there was a certain amount of additional change which has happened in terms of when we

26:26 are expected to get the curtailment, another three months here and there. But it will not have a very larger impact on what we assume as a return on effect on the effect because what happens is that this is a twenty five year period and a three month six month change will not have that bigger impact on us. Plus, many of our assets have also been before time. So our returns on that twenty five year period remains with us. This is just that extra one which we were looking forward for bringing some assets before time. Got it. Got it. Thank you. Those are all my questions. Thank you. Next question is from the line of Amit Binder from Axis Capital. Please go ahead.

27:16 Hello, sir. Congratulations on a great set of numbers. I just wanted to get a sense on the phase six and phase seven ordering of the transmission connectivity for Kaura Because if... And if there's an HVDC component on that, because that would impact your f I 30 target, one. Second, if there's a delay on that side, do we have alternate resources in terms of land or new site that you have identified to meet your f I three target in case the cloud connectivity doesn't get resolved? So that's the first question that I have. So, I mean, it's a good question. Would have been better off with those PGC ILs and CTILs too, frankly. But let us give you... Because we closely monitor it and we also put efforts on it. So, yes, there are there are developments at... On the scheme level, which is happening on phase six and phase seven as we are aware of it.

28:20 Having said that, we are committed for our targets towards 2030. In that process, if you see the battery storage is going to play a very important role as a mitigation measure too in case there is any any changes or delays on phase six, primarily on phase six. Plus, I think we are also looking at various other states too, including Rajasthan, where decent amount of capacities can also come. So I think from our standpoint, we are committed to surpass what has been already stated as well as our target for FY 'thirty is concerned.

29:09 I I just... Rather, succeed here on the back. I just want to give one one piece of perspective which gives us a bit more confidence. So while the media releases have been about the capacity we have either put up or about to put, But it's also worth noting the time in which we have put up. So it's a relatively short period of time. We are talking about months, eight to ten months for the largest plant in the world. So that gives us a adequate amount of flexibility. So so the situation demands so, we now have an added tool in our arsenal to respond to that so that executing more solar and possibly wind is kind of be constrained by any any delays that may occur on transmission. So, you know, versus last year, if you compare this year, we certainly have a very, strong arsenal in our hand as a group, as as a running green, to take care of it. You know? So that is why I think if anything, things have improved by having this virtual transmission effectively through a battery system that we have.

30:11 And this can be deployed very fast. It does not require too much of land. Already, substations are there. You know? So we... That is why you see of all the deployments that has happened and we are roughly... We are striking 50% of that, you know. So that I think is is something you... Which you should bear in mind now. Right. On the near term... Sir, on the near term, let's assume that if the phase three gets delayed instead of q four to q one, two, what would be your strategy? A, would you want to delay your capacity installation and miss the guidance? Or b, you would install more or less to meet the guidance? What strategy would you apply if the... I mean, phase three gets to q one next year? Good question. Let's... You know, we have lessons in the past.

30:58 And our lessons in the past and being an organization which is always improving and, you know, even while we are the biggest, the largest, and the best in the country as well as renewable is concerned, We keep on learning a lot in this process. The lesson of the past is to commission project when the corridors are there, when the transmission corridors are there. So, accordingly, what we have done now is that all the balance of the system which is required for Mhmm. For our assets, which are to come on phase three, we are working on it. Are... We have time... We are all working towards making sure that all the balance of the system and the infrastructure is ready. So that...

31:44 Whenever we have a certainty of our evacuation, you know, in our system as well as solar is concerned, we will just put on the modules so that we are ready for... With our commissioning as and when the evacuation comes. And you will actually have the fact that in in our business, just putting on the modules is is possible at 20, 30 plus megawatt. We have done it on each day basis. So we have timed it up in a manner or we will time it up in a manner so that we can very quickly install the modules because all our balance of system and other infrastructure is ready. So that's how we are working on it, and that will be our... Then that is our strategy, not a strategy, but our way of working right Yep. So from that perspective, that's what I'm trying to help. Yeah.

32:38 But if you also see that this whole enhancement and accelerated battery storage, which is coming up, it's also going to help us. In order to mitigate that issue. Of the existing assets which we have will be mitigated with this accelerated battery deployment. And the future, as you said... As we said, is the way we are working. That's our strategy, and that's our way of working. Right. Got it. So one more question, just I wanted to clarify on one of the answers that you gave to Mohit, That in the... You and I tie up... Sorry. I have with AESL as you call now with the private player. In that, if there's a curtailment and take or pay is to the extent of the unit that you are supplied. But if there's a curtailment, unlike a PPA, ESL would not pay you for that. Right? The curtailment impact would come to your numbers. Right?

33:33 No. Right. I think... Let me clarify. It's a good thing you asked me because I I was getting a sense that it might be misunderstood or misconstrued in a manner. Whatever. Right? When I schedule a power and it is not taken, then I am I am paid for it. This is the way the SECI pays me, the same terms and conditions. I'm paid for that generation. There is also an element when I have scheduled the power and the grid says that you please back down. Then I also get that my electrons payment for that what the grid has not taken because I have scheduled the power. However, if I have not scheduled the power, then I will not be paid. Let's make, like, you know, very clear clear on this matter. Trust me, I have been able to clarify to you as well as to Mohit in the past that everything which I have scheduled, whether it is with ASL or or with anyone else, and if they said that they are not ready to take it, I will be paid for it. So I'm again ready.

34:42 Anything I have scheduled and the grid, because of their frequency changes, ask me to curtail, that also I am paid for. But if I have not scheduled anything, of course, I will not be paid for. So grid related issue led curtailment is also impact to ESL and not to you? No. No. Whatever I am in a position to evacuate, you know, post whatever is given, see, Kabda, suppose, has x capacity of evacuation in totality. That x capacity of evacuation, which is available right now, which I will schedule to AESL, it will... AESL will pay to us if they are not for any reason whatsoever. AESL or any other party for that matter. I'm not differentiating between AESL or any other party. Any party I schedule for whatever I'm allowed to evacuate from KARDA.

35:39 Mhmm. We can schedule considering what is a generation possible on that fifteen minutes block. You see, we we schedule power on a fifteen minutes block. On those fifteen minutes block, whatever I have scheduled, if for any reason one of the procurer is not ready to take, I will be paid for. If for any reason the grid asked me not to inject electrons in the grid, I will be paid for. But what I have not... Which is not possible to be scheduled, the procurer will not pay for. Right. So that's what I'm... To summarize, if the grid is not able to take the electrons that you are ready to supply, AESL takes the hit and not you. For power, we have scheduled for AESL. But grid is... Yeah. Grid is not able to take it, still AESL takes the hit. Yes.

36:31 Yes. That... No. No. No. Please understand. I will I will give you an example here. Suppose I have the one gigawatt of power, which is which is available with me. Right. I have two gigawatt with me, but I am... It is only possible to evacuate one gigawatt of power. If I schedule that one gigawatt of power to any procurer, if it has been scheduled, then if the procurer says no, I will pay for it. Correct. If the procurer... Otherwise, if it is not possible to schedule. Now your question is within that one gigawatt, which I have scheduled, procurer will pay. Got it. Got it. It's a bit technical, but I hope I have been able to, like, do you Yeah. I'll I'll just, like, touch base with you later if required.

37:20 Any other clarifications on that? Anytime. Yes. You. Those were... Thank you. Next question is from the line of Dhruv Masham from HDFCMC. Please go ahead. Yes, sir. Thank you. Sir, just to understand how much of this 10 gigawatt, assuming the 10 gigawatt is the closing capacity, 10 gigawatt are the closing capacity by the end of the year for batteries. How much of solar can it can absorb? I'm just trying to understand, just coming from the curtailment point, how much proportion of capacity that it can absorb? Because the curtailment, I believe, for you gets impacted only during those few hours of the peak generation of solar. Say, for example, 10:00, 11:00, there will not be as much curtailment. Again, six, 04:00, 05:00, not as much. So in a few hours, so I'm probably not able to, you know, get the numbers. So my math is two to two and a half gigawatt of solar, but is that the right thing?

38:22 No. No. You are you are broadly right. See, the simplistic answer is you you generally try and divide it by around 4.5 to five. 4.5 to five. Which is where two to 2.5 comes. But reality, the question is a bit more... Not in complicated because it depends on the curve of solar, the season. Right? And whether you have installed a tracker based plans or you have installed a fixed rate plans, but that that is a bit too complex. But as a rule of thumb, you can divide it by roughly five. By five. Okay. So that comes about two gigawatt. So at least two Yeah. Two. And if you take the... If the nature is a... If it is a bit more curvy, then it could be even less 4.5. Yeah, very, very broad number of roughly five.

39:09 So irrespective of the transmission availability, this much you can at least absorb and then sell it in whatever This is the kind of virtual transmission available through batteries. Yes. Yes. Got it. Got it. Perfect. And, sir, the second question is your generation on a YY basis is up about 33%, but your EBITDA is up about 51. So I'm just wondering how is this happening? Is it because of the Infirm Power sales, which is coming at a better price? Yes. First of all, Dhruv, let me let me thank you that there is, you know, in this whole call, there is someone who's also appreciating that there's good things that happened in the future and as well. Yes. It is. It is also because of the better integrations which we have got from them. Right?

40:04 You like to add more on this? So, see, one is, Dhruv, that... See, battery numbers are also now getting into that. So whatever the battery number that gets added to it. Secondly, what happens is that because of solar and wind combination, where wind projects, we... Wherever we have not yet done any kind of tie ups are still going into merchant and wind as a as a irradiation or it can... This thing was also better this year because of rains being lower. The and the wind also has been much better than last year in that sense. So all this has impacted the EBITDA in that mid way from the perspective of this thing. So that's that's how it has been better even with whatever the capacities have been. And plus, we have brought in a lot of operational efficiencies also in our books because if you will see our operating cost has not gone up as high as what... How the things have gone up. So from an operational perspective, also, have taken a lot of pains in terms of all manpower or other costs that we are facing in terms of ensuring that we don't... So see, whatever impact that can happen, we are reducing that impact by our and employee cost and other things being more rationalized in that manner. Yeah. I would just like to add here, Dhruv, You know, from the

41:34 last few quarters, we have been sharing with you all our investments on digitization, our investments on technology, our investments on how to do operations better. Now all of this now you can see is being reflected on better profits from the same operations, which we have in the past too. So while the revenue has increased because of various reasons, sort of clearly articulate well, These efforts, which are ongoing efforts to reduce our operating costs to maximize all the returns possible, is now been also reflected in this EBITDA. Got it. This is helpful. Is it possible to share what is the price at which you or average price at which you sold the Infirm Power this quarter and previous year same quarter?

42:28 Give me a minute. Do we have it right now? On a Inform Power basis, the last quarter to this quarter, basically, because Inform sells in merchant, the merchant prices have been better this year. So, again, merchant rate which was there on the... Just just give me a second. I'm giving you the exact numbers. Just a second. You have any other question right now? No, That's the only question.

43:16 Or I can... You can mention this later in the call. Thank you. Sure. Thank you so much. Thanks. Thanks, Raj. Yeah. Oh, no. I just need to ask that. So from a... From our perspective, on a merchant basis, last year, our number was nearer to about 2.1 rupees. And this year, because of the better listing, our merchant rates have come to 2.4. Got it. Got it. Yeah? Sure. Great, sir. Thank you so much, and all the best. Thank you. Yes. You. Next question is from the line of Puneet from HSBC. Please go ahead. Yes. Thank you so much. And just one additional clarification here. You also have this 2563 with private player, which still last year was sold as merchant.

44:05 If you can also give some color on what is the realization now versus what it was last year. See, as I said just now, on a solar, were still earning even with the merchant capacities which are in from power, which is being sold as merchant right now. We are earning about 2.34, sort of 2.4 that I said. You know, solar capacity for that... For for the PPA with AESL for twenty five years, it's 2 rupees 70 basis. So that way we are still better off on solar in that sense from the perspective of what we get a realization in. But the larger thing which we should understand is that now for twenty five years, it's fixed. We don't have to worry that this year again, we are 2.4.

44:52 Next year again we might be 2.1. Whatever that number, we are not trying to debate on that number. For us, we are removing that kind of risk that we were carrying on merchant. We want to carry only one major risk which is execution. So we are good at that. We want to execute better. We can do more efficient execution. We can do better operations. We can reduce our operating cost better. So that is where we want to focus on. We don't want to focus. And for us, the CapEx that we have to do over the next five, seven years, which is more focused on us, where we want to remove any risk that the lender carries also on us and everything. So from head perspective, just look at it that this is a twenty five year for which we are not taking any merchant risk on our books.

45:42 We are completely starting to see Okay. Head perspective. Yeah. Right. Right. And similarly for the wind, what the tariffs, you know, in merchant different last year versus what is now contracted with with Adani e... ASMs now? From a wind perspective, what happens is there are high wind seasons and low wind seasons. The overall annual rate of what wind generates, we have tied up all our PPAs based on that only. So our end... When... See, if you will look at our business update, which we had given after the q one call also, we have tied up with that few rupees 93 for the twenty five year period.

46:29 Now on a merchant basis, what happens is wind can be ready. There can be any change which can happen on the prices because of that. That we are removing again. So let's say on an average, we got a 4 rupees something last year on a wind. So we have tied it up here or to that in terms of... And we have to also look at benchmark PPAs that we have signed up on wind. So from that perspective, we are ensuring our rate of return is what we get on wind also as well as solar also, which is 13, 14% ROI. And we are tying it up for twenty five years, so we don't have to worry whether wind prices fall or go up in in... During the seasonal nature of wind. So from that perspective, that's how we look at our business now, and that's how we want to do our business. Okay.

47:16 So... Great. No. No. That's very, very clear, and I think it's a good strategy as well. Yeah. But my question is, number one, on first, you've talked about 13 to 14%. This is ROA or ROE? And on second ROE? ROE. Yes. So higher because we run on a 75, 25% leverage basis. So... Yeah. Yeah. And in this ROE, you you are essentially saying EBITDA divided by the asset or EBIT? EBITDA. EBITDA. Okay. So 13% EBITDA divided by cost of investment. Only 4% on a... Because it's a thirty year, twenty five year life, so it doesn't make much of a difference.

48:01 Yeah. Correct. Correct. Understood. And secondly, on the cost of borrowing, can you also talk about how much is your cost of borrowing changed in last six months? And also, what is the impact that you see with now AGE23L getting converted into AAA? So AGE23L getting converted into AAA easily gives us a 15, 20 to 25 basis points of reduction that will come in in that asset. Okay. The... So it was a double a plus entity. Now it's a triple a. So whatever notch of increase, it will... Between 20 to 25 basis points are always on cards whenever we do this. See, if the This is just for this 50% EBITDA entire portfolio. Sorry? This is only for 25 this reduction is on the portfolio or just this?

48:48 No. No. This is on that effect. See, we cannot have it effect being applied, but what it does is that this is 15% of my overall EBITDA. So it also increases my profile with the rating agencies for the overall Adani Green perspective also. So as more and more of such operating assets, now this this is a seven, eight year, ten year kind of a effect which was there. Similar such assets are now approaching a maturity where the... Because of the amortization structure that we have, we have a twenty year loan on this asset. So based on the amortization structure, the profitability at bank level for this asset is constantly going up because the loans are getting repaid. The asset is performing better than expected.

49:34 So all of this, what it does is that it increases profile. Now that profile will be applied to all our other effects which are operating for more than four years, five years now. So what it does is that it increases the overall ADL profile. Since in 2019 to 2026 today, in the last five, six years, our... On an AGL level also, our rating has gone up by five notches. So that has impacted our interest cost where against the 11% interest... Average interest cost, we are at 8.9 today. And in the last six months also, we have remained between 8.95 to 8.9. That is the difference that is there. We reported in March about 8.9. We are saying we are at that same level.

50:21 Along with under construction of nearly 10 gigawatt hour battery that has added to the interest rate profile. See, if we are at a constant basis, then I can understand there is a question on interest, but with the under construction of nearly 10 gigawatt hour of battery, five gigawatt of solar wind that we are in the horizon, With that also, our interest rates have remained at a level of 8.9, which is generally a better achievement than we... Which we could have got actually. Yeah? Understood. And clearly, just last one from my I'm so sorry to interrupt, Adani. I'm so sorry to interrupt. You may please rejoin the queue for follow-up questions. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, Kindly limit your questions to two per participant.

51:15 Should you have a follow-up question, please rejoin the queue. Will take our next question from the line of Vishal Biraja from Bantani Yeah. Hi. The batteries that we will commission, what portion of this 10 gigawatt hour will be tied up with AESL, and what portion will be tied up for the other hybrid and FDR that we have? I think we were Vishal, we answered this earlier too. Like we reiterate if I was not clear on that part. We, from our standpoint, is very clear on the parameters on which we are going to tie up, whether it's AESL or You will tie up 100%, I agree. I got that. My question was more on how much of this 10 will go to AESL and how much to others is what I was saying. Like I said, our parameters are clear. I think that there we were very clear with you that on these parameters, if AESL comes, then it is AESL.

52:14 If there's anyone else, then it is anyone else. For the timing, it is... In the past, it has been AESL and that that is where we have tied up. Once we tie up on the balance capacity, like we said that it is 3.5, which is already tied up. The rest of our 3.1, now a total of 6.6 as on December 30 is in the process. We will we will share it at... Oh, sorry. September 30 is in the process. We will share it across. That's... We are always sharing across what we are doing. But important factor, again, let me reiterate, is the parameter on which, fundamentally, we are doing business with respect to the organization rating, with respect to our return expectation.

53:00 Those two are the critical parameters on which the company has to come forward with, and that's where we are. Right. And just one more question of the loans that we have. Say, of of the foreign borrowing that we have, like, the USD is hedged, but the interest rate is not hedged over there, right? When you say that the three year, there is sort of a stable rate, that is more for the domestic borrowing from the bank. So see, what happens is that this question was stemming from the fact that there is a rate hike in India that has happened. So from that perspective, a very substantial portion. See, today, anywhere about 70% of our loan book is rupee driven. Right?

53:45 About 30% is in dollar denominated. Within that 30% dollar denominated, we fully hedge our principal plus interest anyway. There is no change in that policy because that's governed by the lender documents. It is not just our own hedging is correct? So just just Sorry. This hedging, what you say? I'm just just finishing. So the hedging for, let's say, our... One of our r g two assets has been done till FY thirty. It is fully hedged for till f y thirty. For r g one, the hedging is done till '28. It will be now rolled over as during a good window that we will get for another period of whatever three to... See, in India, we get a hedging or the liquidity level of between three to five years, which is a good liquidity at which you get a good hedging rate also, and the hedging cost is not going beyond.

54:38 So that we will continue to maintain as our hedging policy, whether it is principal or interest. It will not change for that. Yeah? Thanks. Thanks. Yeah. Thank you. Next question is from the line of Shweta Rakesh from Cantor Fitzgerald. Good morning, team. Here from Cantor on the line for Manish. I hope I'm audible. Can you be a bit louder, Sveta, if you don't mind? Yeah. Yeah. Of course. Thank you. I'm just glad that I'm audible.

55:24 I... I'll be really quick. Given the acceleration in the best deployment that you have seen in the first half, is there any change in the allocation or timing of the CapEx program that we have, the 2.4 lakh crore CapEx program? And, specifically, would you direct it towards storage because we're accelerating the program as you mentioned on the call or on greenfield generation, which is... I know we also have a target over there. Yeah. I think, Shweta, it's a good question. You will appreciate the fact that we have demonstrated so far our capabilities to very prudently deploy our CapEx at a scale which is also unprecedented.

56:13 So we are very we are very, very firm on that path. Under any circumstances, we don't foresee any challenge of not achieving it. I think the point here is that what more we were going to do on that particular path. Of course, battery storage has come. In this year too, there has been accelerated growth on that matter, and there is an opportunity to do that for the next few years too. It is only going to add on to what we have been doing otherwise or what we have planned otherwise. So in our overall strategy for next three to five years, both solar, wind, battery storage, and pump storage has their own roles to play, and we are firm on the debt as well as in the equity part, and more importantly, deploying that CapEx in a very prudent and cost optimum manner.

57:11 Right. Thank you for sharing that. Just another quick one on the leverage profile that we have currently at 5.6. How should we think about peak leverage and peak cash flow generation, especially through FY 'twenty eight? I'm asking this question because we're seeing evacuation being an issue. And you mentioned the EBITDA contribution, and we do constantly tell us that BEST is going to help us in making sure that we are on track with the run rate EBITDA that we guide towards. But how do we how can we like how do we frame the leverage profile? So, see, on a on a long term basis, that leverage profile does not change as such because, see, a curtailment is a issue which is there for not more than three, six months here and then. The change has not happened that it has been a year difference that we have given.

58:08 Whatever we had said that it will come by December is now slated to come nearer to March or something. So that does not change the leverage profile of a a a a a a a a starts to... As a percentage a a of a under construction asset, as we move towards that, the leverage profile will start to be in the range between 4.5 to five and then moving towards four and below four also as we move further into the number of years. Because, see, it's a amortization structure. It automatically pays for itself. We have taken all loans on a project finance basis. The project are doing better.

59:03 All the projects which have been financed have been able to service their interest and repayment. So from that perspective, as we move towards the larger CapEx being completed between 2930, and we will have about 45 gigawatt of RE capacities, five gigawatt of pump storage capacity, and nearer to forty fifty gigawatt hour of battery. That number on the overall EBITDA will be against which the debt that we want to deploy will be towards a number where it will reach a 4.5 ish number, and then it moves further down. Because as you are paying off your debts, that number starts to taper off. It does not have a larger impact of curtailment, which will change the leverage profile in that big of it because our leverages are based on project effects and not based on a change of three to six months here and there on any EBITDA profile. Yeah?

1:00:05 Right. Thank you, Saurabh. I'll I'll reach out offline for further questions. Sure. Sure. Thank you. That's okay. Thank you. Ladies and gentlemen, we will take this as the last question for today. For any follow-up questions, you can directly reach out to the management team. I would now like to hand it back to the management for closing comments. Thank you. Thank you, Alek. We thank each one of you for your continuous support to us. And on behalf of AGL, I think we have been delivering a good performance, and we'll keep on delivering the same. But once again, thank you for your perseverance, for your interest. And thank you, MK, for organizing this, and we look forward to work further on in future. Thank you. Thank you, everyone. Thank you.

1:00:59 Thank you very much. On behalf of MK Global Financial Services Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.