Premier Energies (NSE:PREMIERENE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Premier Energies Limited q one f y twenty seven earnings call. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar. Thank you, and over to you, sir. Thank you, Atarwar. Good morning. On behalf of ICICI Securities, I welcome you all to the Q1 FY 'twenty seven earnings call of Premier Energies Limited.

0:46 Today, we have with us from the management Mr. Chiranjus Singh Saluja, Managing Director Mr. Nankisho Thandelwal, Chief Financial Officer and Mr., Chief Business Officer. We'll begin with the opening remarks from the management, which will be followed by Q and A. Thank you and over to you sir. Thank you, Mohit. Am I audible? Yes, sir. You may go ahead. Alright. Good morning, everyone. Thank you for joining us today for our q one earnings call. I am, managing director at PREMIERENERENEERENERGIES, and I'm joined today by my colleague, group CFO, chief business officer.

1:44 With the ongoing wars, commodity price inflation, and shifting trade flows, the environment around us has been quite unpredictable. But I'm pleased to say that we are navigating this period successfully with disciplined execution combined with investments in scale, technology, and people. The company has reported another record quarter of revenue and profit growth. Our total revenue has increased 34% year on year to $25.08 crores. EBITDA impact have grown by 2753% to $7.59 and $4.72 crores respectively.

2:35 The profitability margins have been largely steady at thirty point three percent and eighteen point eight percent respectively. These results include consolidation of our 51% stake in TransCon. The company reported excellent results in the quarter with the revenue of revenue and PAT of 110 crores and 18 crores respectively. EBITDA and PAT margins in the transformer company came in at 2717% respectively. Amongst key business updates are 5.6 gigawatt, fully automated solar module plant at Chitrampur is operational.

3:22 The seven gigawatt top con cell line is in advanced stages of commissioning with trial runs expected to start later this month. Our operational cell plants in Telangana delivered a record capacity utilization of 92%, showcasing our all round excellence in plant operations. We won new orders totaling $30.11 crores for cells and modules taking our total order book to 15,000 crores including transformers. The overall business outlook for solar sector continues to be positive and encouraging. Power demand this year has been exceptionally strong.

4:10 Solar demand has been strong too with nearly 12 gigawatt of capacity addition in quarter one itself with great momentum in the PM, Suraikhar, Yojana, and Kusum schemes. On the enabling resolution taken by the company, we would like to clarify that we are in a hyper growth phase of this industry. And during this phase, it is important that we have flexibility to expedite organic growth path or capitalize on any inorganic growth opportunities, which may help maximize shareholder wealth. As a result, we will continue to take such enabling provisions... Timely resolutions every year.

4:56 As we speak, I can confirm that there is no concrete plan to raise any primary capital in the near future. Over the next few quarters, as new cell and transformer capacities come online, a major step is expected on the back of operating leverage, both in operations and financial performance of the company. This will help us maintain industry leadership position in scale, technology, cost of manufacturing, and continue to deliver industry leading margins. We are very confident about future prospects of the company. Thank you. We are now open for questions.

5:46 Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question, may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Akur from IIFL Capital. Please go ahead. Hi, sir. Thank you for the opportunity, and congratulations on a strong set of results.

6:32 I must say the presentation, I think, quality is is is very good. A lot of details, extremely helpful. Sir, I just want to pick your brain on a couple of things. One is, I think, on the data that you provided in the presentation on rooftop and PM Kusum demand, how much should we assume or estimate the DC overloading for PM Kusum? Apoorva. This is Rune here. Hi, sir. Yeah. So, Apoorva. Hi, Apoorva. So so in Qusum, you know, there are obviously three components as you know, a, b, and c. Most of the installations are coming in b and c. In b, which is the solar pump part, the overloading is basically one.

7:21 But in Qusum C, where the... Where basically most of the projects are ground mounted projects in sizes between two to 10 megawatts, sometimes larger, the overloading is between one point three and one point five as we usually see. So on a blended basis, I would expect the overloading to be about 1.2, 1.25. Understood. So this two gigawatt of demand in this quarter would be about two and a half gigawatts for modules? That's right. That's right. Yes. Roughly, your total demand for both these segments would be around six gigawatts on a quarterly basis. How do we see this for the remaining nine months, sir? So I think there is actually great momentum in both the schemes. As you can see, and that is what we are trying to show you in this chart.

8:09 In Surrey Hari, Yodhna, there is a kind of a month on month increase, and we are expecting, you know, the average over the next nine months to be about 1.2 to 1.3 gigawatts. In Khusum, you know, the government has already given a deadline of March 27 for implementation of all the ongoing projects. So actually, we are expecting a huge step up in the Khusum scheme, and I would expect the installation over the next nine months to be sometime between six to eight, possibly higher than eight gigawatts. So roughly around, say, 12, 13 gigawatts in the rooftop space and maybe around eight gigawatts in in this. So roughly roughly around 20 gigawatts for the next nine months.

8:56 Yeah. So when I said six to eight, I was talking about the AC numbers. So if in DC terms, you know, that would be about Okay. Okay. So So it'd be around 23, 24 gigawatts in total. That's right. Yes. Okay. So the annual... And then, sir, any other segment also coming in for DCR this year? Do you expect any demand from C and I after the ALM two deferment or from BITC business? No, I think the remaining demand will mainly come from the C and I segment. The government has said that any projects commissioned from January 1 onwards will have to use DCR modules. So the demand will start arising from the last quarter of this year, which is basically October, November, December, and that it itself should also be a subsizable volume for DCR market.

9:49 Sure, sir. Understood. Understood. On the second bit, sir, I want to understand this, if how much of CapEx did we incur in this quarter on the solar business? So the total CapEx in the quarter was about INR 1,500 crore. Bulk of the CapEx was incurred on solar projects, Basically, both Sikharampur and Naidu Beta, and then the remaining was incurred on Transcon, $2.50 crores. Okay. So $12.50 crore was in solar? Yes. Okay.

10:35 Sir, lastly, if I may ask and squeeze in just one more question on on this mix change that we are seeing now that our cell capacity is is ramped up. Do you see this sort of maintaining this 25% revenue in future from cell sale, or should more of this shift towards the DCR sales? So I think over a period of time, of course, the share of the DCR modules will go up. But, you know, the other part of the the picture is that is that NDCR demand is going to continue over the next two years. So we will we will decide depending on the mix of orders that are coming our way as to how much sales should be sold in the external market.

11:22 We still have a pretty good pipeline of orders for sales sales over the next eighteen months. So I think that will continue, but the share of DCR over a period of time, I would say, over the next eighteen to twenty four months is continue... Expected to continue... Expected to go up steadily. Sir, because I... On on this one, I just wanted to sort of double click a little bit. Even if we assume that mod... In modules and on the conversion cost or conversion process, earn a margin of, say, a rupee or rupee and 0.5 per watt peak, Why why would we sell just sales and probably leave some profit pool on the table for others to capture? Why not capture all of it? So so let let me answer this,. So it is it is... What you're saying will happen gradually.

12:15 We have contracts signed where we need to supply sales. These were signed sometime back, but as we progress, you will see more and more DCR module and lesser amount of sales going out. Once our cell line gets operational, are almost 10 gigawatts, ten and eleven gigawatt module, which means we will not have lot of sales to sell. So, sir, safe to assume that the order booking we did this quarter was mostly modules? It is. Yeah. It is gradually moving towards more of DCI modules than sales. Understood, sir. Thanks a lot. All the best. Thank you. Thank you. The next question comes from the line of from Dime Capital. Please go ahead. Yes. Hi, sir.

13:02 First of all, thanks for the detailed presentation and the split between solar cell model transformers. So this is quite helpful. So firstly, the Q1 order momentum was strong, the order inflow. But just could you give some bit of insights now post the announcement of extension of the ongoing C and I projects until December? How are we seeing that the inquiry pipeline or the momentum like in July and August? If you can just give some bit of qualitative guidance here. So our BCR order book was quite stable, quite strong coming in every quarter. Post this extension of ALCM, we have seen a sudden influx of large orders of non DCR modules, which has been kind of a positive for us because as we speak, we have a little bit of extra module capacity for for the next two to three months.

14:00 So it has been kind of a big positive for us that, you know, while our cell line comes up, we had module line sitting, you know, for the next quarter, and then that's really now getting busy because of the influx of the non DCR demand. Understood. And on the DCR, but is there any any color there on the DCR side of it? It's not in... I mean, we are sold out. So, you know, we are we are selling only for FY '28 now. Understood. Got it. And second, we said just as a continuation, you know, the revenue mix from sales during one q was about 24 odd percent. Right? And the same in our order book is around 58 odd percent, right? So any sort of margin guidance that you can give over the next fifteen, eighteen months as your business mix improves?

14:54 How can we see the margin trajectory from the current 29% or the operating EBITDA margin? So we are quite positive on the outlook for margins that we will be able to protect our margins. The new cell line coming up is going to get us a lot of operational leverage. As you can see, the transform business is also trying up healthy margins. DCR mix is changing from one DCR to DCR. So as far as we are concerned, we have been consistently, you know, updating that we will continue to deliver healthy margins, industry leading margins, and protect what we are delivering as of now. And the order book has has similar margins as to what we are delivering. Understood.

15:40 This is very helpful, sir. Thank you so much. I'll call back in the queue. Thank you. The next question comes from the line of Nitin Arora from Axis Mutual Funds. Please go ahead. Hi, sir. Thanks for taking my question. Just on this ALM extension, given the ramp up in the DCR cell capacity, we are still not seeing many players who have commissioned also in last one year. The utilization is not even going beyond 20%. And the new capacities, I wanted your view how you are looking up the ramp up because so in that scenario, if any C and I player, do you think he has a mindset of not blocking the capacity at this point in time? My question is rather than deferring the demand, don't you see the demand coming forward because DCR capacity itself is not available? So I just wanted your view on that, number one. And number two, just the what Gonal asked on the margins.

16:49 Given the DCR mix going up on your execution because you yourself said you sold out, 29%, 30% margin, you think it's sustainable for next two to three years? Alright, Nathan. Thank you. So to answer your first question, see, market, you know, the... So beyond the market is expected to be favorable throughout FY '27 and '28. Demand is very strong. Right? And we have a constrained supply situation. New capacity, as we've seen, it's taking longer than expected to come online and longer than expected to even ramp up. And this is what we are seeing in the last twelve to eighteen months. The C and I clients are very selective on whom they wanna work with. They look at the size of the balance sheet. They look at the size of the plan, the automation, the advanced technology, proven track record. So so we believe, and we are seeing this that the C and I players are blocking capacity for FY '28 today.

17:51 They are not waiting or they are not differing. So we have, in fact, signed up orders with C and I customers, which are going into FY '28. So so so that is the answer to your first question. On your second question on margins, we have consistently, informed that the margins of 29, 30% plus minus 100,150 basis points, we will be maintaining. And this is because for the simple reason that our seven gigawatts line is coming up, our transformer capacity is growing almost from four GBa to 16.25 GBa. By FY '28, we have inward wafer lines coming up. So it is it is more of backward integration and scale, which Premier is working on. So we are quite confident that we will be able to maintain healthy margins.

18:45 Coming to the transformer business, can you give us some guidance where you're seeing because your 16 GBA going to 64 on the higher side is also very margin accretive because of what other industry players are reporting. But in your next, let's say, FY 2027, '28, where are you seeing this revenue ramp up for Transformers and the profitability? I think Vinay will take this question. Hi, Vinay. So Vinay, as Sriniv just mentioned, in the Transformer business, there's a huge step up in capacity coming forward. There's also a shift towards the more lucrative HV and EHV segments, which is coming up. The company is also quite aggressively now looking at export business, which seems pretty large, particularly, I would say, America, Europe, and even Africa.

19:42 So I think on the whole, given the ramp up in capacities, we are expecting the business size to largely, I would say, travel over the next three years. And profit margins, you know, margins historically, you know, across the cycle for the transformer businesses, businesses have been about 15% in terms of EBITDA and about 8% to 10 for at the PAT level. And we expect that our margins should be slightly ahead of this given the low cost base of the company and all the levers that they've got in place for growth as well as cross synergies with Premier. So just because your capacity is coming up, you reported INR100 crore, which is just one month, INR600 crore, INR700 crore revenue is doable in this year and then it should go towards what INR1300 INR1400 next year is just a ballpark?

20:33 So I think the initial ramp up after capacity expansion is usually a little bit slow because of the time it takes to get all the products certified and type tested and get start getting orders from the clients. So in general, I would say our revenue outlook will be slightly south of what you said in the current year. But then, like I said, you know, over the next two years, it will obviously ramp up quite substantially. And then last year, the company had done about INR 400 crores of revenues. Over the next three years, we expect this to be more than triple of that level. Got it. Thank you very much, team. All the best. Thank you, Nitin. Thank you. The next question comes from the line of Mayur Patel of Deutsche Bank.

21:23 Please go ahead. Congratulations for another set of results and very strong execution. Just one question on DESS. Is there a thought to tie up with some technology partner and backward integrate once you start the assembly? But is there any thought around that? So on battery inventory systems, we have already acquired the land and construction started. We are looking to partner with a technology partner for the containerized solution. We are going slow on this because we're also waiting for guidelines from the government on how the non tariff barriers project is gonna take over on the BSS segment. There is a draft guideline which was sent out. So we are waiting for more details from the government side to look at further expanding into BSS manufacturing.

22:26 But our BSS span of 12 gigawatt, six gigawatt phase one is already underway. Construction started and technology partner would be, I think, finalized in the next two to three months. And next step, is there a is there a ambition to also get into cell manufacturing for the ESS in future? I would say I would say there is, but at the appropriate time. Okay. Perfect. And, sir, lastly, seven got paid for. Yeah. Got it. And lastly, seven seven gigawatt new capacity, is it fair to assume that the revenue will start coming in from, say, November, December of this year? We are actually targeting the first set of revenue to come in September.

23:16 September. Okay. So then just like you have ramped up the top 1.2 ramp up. Yes, it will take time to ramp up. I'm saying the first set of revenue would come in September, but if you talk about line reaching close to 50%, 60% utilization would be November. So March quarter, we can assume around 60% kind of utilization level from this new facility. We are targeting at least about 70%. Okay. So that means March quarter would imply almost more than 2x of the current cell production. And if margins and yields remain at these levels, that's the way we should look at it. Yes. Thank you.

24:06 Thank you. The next question comes from the line of Praveen Sahai from PL Capital. Please go ahead. Yes. Thank you for opportunity. My first question is related to the module business. So as you had highlighted in the call that there is an influx of non DCR. So is that the reason why our overall realization on the sequential basis on the lower side? So so non DCR business is not profitable as we speak, and we can see this in the industry that the non DCR business because there is about 250 odd gigawatt of module lines, and the entire demand in India is about 60 gigawatt, out of which almost about 30 gigawatt is DCR.

24:53 So, you know, the non DCR demand being 30 gigawatt and capacity is being over 200, there is there is a serious situation over there. So non DCR business is not profitable as we speak. It is it is only that people... If you have more capacity of modulating, you would want to run your line rather than keep it shut. The business is moving towards DCR module. And and this influx of non DCR orders which we have got in this quarter because of government extending up to December, we have got slightly better prices compared to last quarter because everybody is in a rush to commission and connect before December. They're actually targeting November. So there is a slight increase in margins in this coming quarter for non deshell business. But in the long run, if you have more of module capacity and less of cell, then you are in trouble with the module capacity.

25:50 And if you have to have a module, Monica, she's in Yeah. Yeah. Got it, sir. But whatever the orders we have received, especially in the module, that's largely... Is offered this year. No. Of course, we have DCR orders which is coming in every quarter. We spoke about an influx of non DCR order because of this five month extension. Yeah. Yeah. So... And also, just to clarify that, sir, in the call, you are also, you know, highlighted that's the... Whatever the order book you have is largely due with the... Or DCR model. But if I look at your cell number as well, there is a good growth of order inflow in the cell as well in this quarter if I look at q four to q one.

26:39 So... And how how has been the... You know, if you can highlight how has been the pricing for those cell orders especially and the timelines? So so there is a little bit of a difference. There's a module orders that for this financial year, but the sell orders go into f y twenty eight and f y twenty nine also. In terms of pricing, most of our sell pricing, which are long term is variable. So wafer is variable, silver is variable, and and so is the Exchange rate. Exchange rate. Pricing is more or less being stable on the on the solar cell side. That is the mono cell. Topcon cell, we don't sell. We use it for our own consumption because as of now, we do not have a large capacity of Topcon. But once our new capacity in near to three thirty starts off, we have some contracts for supplying Topcon cells.

27:30 The prices are quite stable, and we don't see any dilution in prices over the last quarter to this quarter. Just to, you know, further on this question, we forward how we will see this order book. So you you are going more towards a DCR model versus the sale orders and whatever the sale... Because there there is a good, you know, order book of sale actually. You have. So the way forward, how we will look at order inflow in the sale to come in, continue, or you are more in line towards the DCR model order? More towards DCR model because once... Now our model line has come up, the 5.6 gigawatt, so our focus will be more orders towards DCR module. See, there there is one thing I want to add to that. You know, yes, there is a large percentage of the order book which is coming in from sales, but most of those orders are placed, are distributed over a long period of time, over FY '28 and even stretching into FY '29.

28:33 Whereas bulk of the module orders are for delivery over the next six to nine months. So if you look at it on a total basis, the sell orders look very large. But if you were to compare it on a quarter by quarter basis in terms of what is their order book set for delivery, then the number of order... Module orders is larger than the sell orders. Okay. Okay. Got it. Got it. Really helpful. Lastly, on the cost side, if you can highlight how has been the spread, especially in the DCR because the rupee depreciation and the supply cost, which has increased. So high as in the in the DCR, the spread is moving. So it's it's not moved much because most of our orders are on dollar base, so the exchange doesn't make any difference. And if you see silver has actually dropped, so there has not been, you know, a big change in the spread and no material change.

29:26 Thank you, sir, and all the best. Thank you. Thank you. The next question comes from the line of Ketan Jain from Amunderspark. Congratulations on a good set of numbers. Just two quick questions. I understand that our depreciation has come off from FY 'twenty six. What would be the expected run rate for depreciation in FY 'twenty seven based on our new capacity additions and yes. So I think Ketan, this is Vinay. In terms of basically, it has come off because of last year, we had taken accelerated depreciation. Now we are back to the usual five year depreciation for all our new cellular module lines.

30:16 So over the next three quarters over the next two quarters particularly, you will see more depreciation coming in because of the Siserampur line has got fully commissioned and then of course the seven gigawatt Naidu beta line gets commissioned later this month. So I would expect a small increase in depreciation in the next quarter and then full effect coming in through Q3 and Q4 where we will see roughly about crores to INR250 crores of depreciation quarterly. Understood. Understood. Got it. And what what would explain the stock increase in other expenses and employee cost as around other expenses are up around 50% and employees around 70%.

31:06 So this is nothing but just advanced hiring for all the capacity expansion that is going on in the company. So, you know, the Sita Rampur get the line got commissioned in March, you know, we had to start hiring people, I would say, more than three months in advance of that. And similarly for the Naidu beta line, you know, we've been kind of hiring people over the last six months already. So we have to prepare in advance in terms of all the hiring, making sure that all the training is done for all these people. And then, of course, even at the corporate level, there is a jump in hiring in terms of because we are kind of... We made a few acquisitions and we are kind of building out new businesses. So I think that explains the increase in manpower cost.

31:52 At the same time, I should also say that there is also, you know, very active discussion on cost cutting and optimization in terms of resources across the company. And, you know, one of the major advantages of the scale up and operating leverage that we are getting is that we are able to substantially reduce the number of people that we employ, let's say, a per gigawatt basis. A good case in point is the Sikharampur line where we estimate that a manpower cost would be roughly about 40% lower on a per gigawatt basis than it has been on the other line because these were all scattered, you know, point five gigawatt line, seven fifty megawatt line, etcetera. So while at the aggregate level, the costs are going up, but on a per unit basis, the cost will actually be much lower over the next few years.

32:47 Understood. Thanks for that is a great answer. Wanted to check one more thing. Is is the assumption right that the finance expenses would ramp up in q three and q four once the new line add up? So I think in terms of the finance expenses, yes, I mean, there will be some increase. But, you know, as you know, bulk of the increase in capacity for the new lines has been actually funded by equity. So the increase in expenses will be actually relatively quite small. Understood. Understood. And are you asking for employee... Did... What what about other expenses? Why it's... It is up 50%? Sorry. Just give us a second. You mean other expenses?

33:39 Income or expense? Expense. Other expenses. Expenses. So I think in other expenses, from 120 to 180 crores. Yeah. So expenses increase is primarily attributed towards the operational cost of. Post capitalization, wherein the ramp up is happening in July that is subsequent to the quarter, but all the buildup of the cost, the power cost and all has been taken into other expenses. Understood. It's considerable to see that also for the model facility. Understood. Thank you, sir. Those are my questions. Thank you. Thank you.

34:25 The next question comes from the line of Sahil Cheet from Anandrati Institutional Equities. Please go ahead. Good morning. This is here. Sir, I just wanted to circle back again on the realizations that we have achieved for this quarter. Hi,. Where are you calling from?. Okay. Okay. Hi, Shweta. So as we said earlier, the realizations in the quarter were pretty stable for both DCS modules as well as for sales. On the NDCS side, there was some softening as the prices have been coming off because of the oversupply in the market.

35:11 So that answers your question, hopefully. But on the DCR side, we're not seeing any kind of sequential decline or any pressure in terms of pricing? No. So, you know, on the DCR market, we have... The market is highly segmented. You know, there is across C and I, Rooftop, and Qusum segments because, you know, each of these segments, the customer profile is very different. The retail demand is very different. So... And, also, there are obviously differences because of technology in terms of one of our... And top down. So just to give you an idea, for the retail market,, the modules are sold at about 24 to 24.5 kind of cents range.

35:58 Whereas in the personal market, because the project sizes are larger, the prices can be slightly lower at about 22 or so, and C and I market will be slightly lower still depending on technology and timing of delivery. Okay. So how do you foresee this going for this year, Alec? How do we, you know, build in the realizations for the year? So I think for the year, like we said, Shweta, most of the order book is already in place, particularly for DCR modules as well as for sales, and those are all booked at the current prices. So there is no change that we see, I would say, even over the next twelve to fifteen month kind of trajectory.

36:47 Got it. That answers my question. Thank you. Thank you. You very much. The next question comes from the line of Sham Maheshwari from Mutual Fund. Please go ahead. Yes. Thank you for the opportunity, and congrats team on a good set of numbers. I just had one question and from a strategic point of view, sir. So I think yesterday, there was a circular in The US possibly importing... Implementing some minimum import prices on and module imports into The US. And I think cell import price was somewhere close to about 22 watts. So from a strategic point of view now for sir, does it now make sense to sort of start, you know, cell manufacturing in The US or maybe module manufacturing in The US?

37:43 Any any thoughts there, you know, from a strategic point of view you have? So, Shyam, we already have a JV to set up cell manufacturing in The US. We have been trying to finalize the location where we wanna set this up, and we have been a little slow and cautious looking at the regime there. But we are... We have concrete plans to set up cell manufacturing in The US. And with this MIP proposal, which has come up, yes, it makes sense to manufacture in The US. Interesting. Interesting. And, you know, if... Let's say if we kind of go ahead with this, by when should we kind of start expecting output from the At least about twenty four to thirty months.

38:33 Interesting. That's it, sir. Thank you so much. Thank you. The next question is from the line of Prakhar Poulwar from Ambit Capital. Please go ahead. Hi. Thank you for the opportunity. First question, Khosan, actually, Khusan B and C, I think majority of the target has been already achieved in terms of B, FLS and Khusan B and C, FLS. Now Qusam A, earlier, I think it was the notion that it is not lucrative for discount and even the pickup was very similar. But as per the new participants' question, are you seeing obviously, it reflects a number, but does that mean maybe a 10 gigawatt overall target that was earlier laid out would come through by March 27 as per what you mentioned in the earlier report?

39:30 Prakash. So I think the mix between A, B and C has actually been quite flexible. You know, the government has been shifting capacities, particularly from component a and then also from b to... Towards c. On top of that, a lot of the states, particularly, I would say, Maharashtra and Rajasthan and UP have also done large tenders for both b and c, even outside of the... Whatever the government targets. So I think on the whole, there is, like I said earlier, there is active demand in both b and c. And I don't know whether the the b target of 10 lakh tons will be achieved or not. I mean, as of today, the the the implementation is...

40:22 The total installed number has already reached 11.5 lakh pumps as per the custom portal. So I think we are going to target. And because the chart that you've put in presentation that shows pickup in a, which was a 10 gigawatt overall number. Even that because I I remember in in the first question, you mentioned that government has directed states to meet the entire quota by maybe March 27. So even a, you are seeing that pickup again? So I I think what is happening is the projects which have been basically tender and often in the past, they're finally coming to execution.

41:10 But in a, the level of subsidy given by the government is actually quite small, and hence, there hasn't been much take up in the a component overall. So, yes, I mean, there is obviously increase because, you know, historically, not much has been added, but bulk of the capacity addition will still come in B and C going forward. Understood. And just second and last question on the OCR that you booked, so that would be on hedging on silver and ForEx? Sorry, the question is not very clear. So the OCI loss that you booked in your financial in the last two quarters, that is related to hedging positions on silver and ForEx?

42:00 It is basically silver and aluminum. So this is all done in the normal course of business, and it will be unwound as in when these positions are utilized and settled.. Sir, yes, that's correct. Yes.. Okay. And just actually, just the last one on exports to other geographies like Europe, etcetera, Because recently, have been some developments in Europe wherein they want to move a little excess China supply chain. So is there some maybe inbound queries from there as well or maybe Europe is still distinct in terms of export opportunities?

42:45 No. Europe actually is in a takeoff stage. In fact, we are in advanced stages of opening our European office and even hiring a sales team over there. Already, tenders have started coming out. There's been a large auction in Italy. Some large tenders have come out in France, we expect more tenders to come out front in Germany and other countries, which are basically precluding modules from China. So I think that market is going to open up quite substantially over the next two to three years, and we are actively looking at that market and doing a lot of work to understand the customer requirements, you know, documentation, technology, after sales, and opening an office very shortly.

43:38 Okay. Thank you and all the best. Thank you. Thank you. The next question comes from the line of from three sixty one Capital. Please go ahead. Most of the things are covered. So just one clarification. When you say DCR module, it's the integrated module and cell supplied in the DCR market. Right? That's right. That's right. And so going forward, once you have 10 gig out of, you know, cell capacity, you'll try to consume most of it as this year market opens up post December for the DCR integrated model, right, instead of selling more sales separately in the market? That's right. That's right.

44:33 Thank you. The next question comes from the line of from Surt Life. Hi, Sir, as you said sir, as you said that there was an influx of non DCR modules, how do we see quarter two and quarter three ramping up in terms of TCR? Were there huge rush in pre buy and should we see some slowness here? For DCR, we are not seeing any slowness. There is always a pre buy. If you're talking about q three, q four, your question is on DCR or on non DCR? Sir, DCR, sir. DCR is is is all prebind.

45:20 There is huge demand. Because lot of DCR projects are getting over in March, like the Kushum program is getting over in March, then the Qsum two point o comes. The PM is getting over in March, and there is talk of PM two point o coming. So there'll be a a a big demand in q three, q four for DCR. Okay, sir. So now that our modules and we'll use more our own manufactured cell, how is the spread looking in the DCR? And vis a vis, let's say, last year when there was non DCR cell also, overall, how do we see the margin in in overall?

46:06 So so the spread is similar. You know, there's not been a big change in the spread. There is no material change. Okay. And going forward with the... This mostly DCF, how do we see margins from here? I believe the prices is holding up, but what is the sense if you can quantify what the spread and Yeah. So so what what what we believe is that as, you know, going forward in future, more capacity of the lines coming in, which will take time. It takes two years to build cell line then to ramp them up and to stabilize them. We feel that even if there is a little amount of pricing pressure with scale and operating leverage, we will be able to protect our margins.

46:57 Okay, sir. Got it. Thank you. The next question comes from the line of from DAM Capital. Please go ahead. Sir, firstly, on the comment that you made on Europe and demand actually looking solid from an outlook perspective. Now so similar to a JV for manufacturing in The U. S, Can we also look for something like that in Europe in terms of manufacturing there? Or are you looking more from an export perspective only? So, Konal, in European market, the policy regime is still kind of taking shape under the net zero industry act and some of the other policies that have been announced so far.

47:47 Module imposed from countries with FDA will receive the same status as domestically made modules. So... And as you know, India is in the final stages of signing the FDA with EU. So I think we are looking at the market following all the developments very, very closely. As long as the Indian modules find an easy acceptance and the the FDA is signed as expected, I think export from India is going to be the first preference. But then we are completely open to the possibility of setting up a plant at some point depending on demand growth as well as the policy environment. Understood. This is helpful.

48:34 Secondly, sir, you know, if you look at our journey, sort of we were amongst the first to transition a line from multipurk to monopurk and then among the first to sort of roll out G12R and geo well bus sales, right? Now what lies ahead in terms of further tech upgradation from year on and a subsequent expansion versus the peers in terms of our technology and where we stand? So so, Kumar, as we speak, we are, you know, making g 12 r talk on sales, and then we've also launched the zero bus bus cell. We are working with our r and d team, taking stock of what we expect would come up in the next, you know, five years, ten years.

49:25 Post Stockholm, we are looking at TBC, which is the back contact. And then we are also looking at tandem, which will take a little longer. But then as a company which has been into module manufacturing for almost thirty years and cell manufacturing for over fifteen years, we generally keep a tap on what's happening around the world and are in sync with that. Understood. And, sir, one last question. What we hear in the market is the talent attraction and retention retention in the cell industry has been a bit challenging, especially with a lot of new companies sort of announcing their entries are already entered. What has been our strategy to sort of offset for this aggressive attrition that we are seeing in the industry? And this is something that we are hearing, but could you also give some insights for you?

50:21 Since this is a, I mean, this is a problem in the industry, but then we keep continue... Continuously training people. We impart lot of skill development in our plants. We have people whom we keep training continuously. So we are not facing this problem in a in a material manner. And on the other hand, we have, you know, been great place to work four times in a row now. And, you know, our Esop scheme has been very successful. All these things have helped us to retain good talent. Understood. This is very helpful, sir. Thanks, and all the best. Thank The next question comes from I of think in the time, let's take one question each because we have only seven minutes left.

51:13 Okay. Participants are requested to restrict your questions to one question per participant. Thank you. The next question comes from the line of Shivam Buradi from ICICI Securities Limited. Please go ahead. Hi. Thanks for taking my question. And as our order book is at a record high and as per your remarks, bulk of modules are expected to... Module module orders orders are for six to nine months while sale orders are spread over FY twenty nine. So how much of the current order book we can execute in next, let's say, nine months? So the total order book is 15,000, and a substantial portion of this order book, at least about 40 to 45% of this order book would go into FY '28.

52:13 I hope that answers your question. Yeah. Yeah. Okay. Thank you. Thank you. It was from my Thank you. Yes. You. The next question comes from the line of Karam Gupta from Asset Meta Investment. Please go ahead. Yes. Hi. My question on the industry side. So as we can see a lot of chatter is coming from the government also that the transmission side or the grid side is not that much capable to transmit the renewable energy, right? Now when the base capacity will expand or set up, the duration time, do you see that the orders are the run rate of orders is coming off for the renewable side, for the module side.

53:19 Because as you can see, the ramp up of base capacity will also take time. And GOMES is strictly pushing towards the best capacity, not the stand alone solar model. So I think that we are seeing some curtailment of our energy generation. So how do you see that, Ritu? Yes, sure. So, Karan, we have tried to show in our presentation that definitely adding a lot of solar capacity does put a lot of pressure on the grid. There is a steeper and steeper duck curve as we are observing in the Indian market.

54:09 But then, you know, there are... At the same time, there is also a very good demand momentum in the industry. So... And there are two, three very good mitigations in place. One, storage technology has become viable not because... Not just because the cost of storage has fallen, but also because the arbitrage or the opportunity cost of storage has actually gone up. So, you know, today, there's an arbitrage of 7 to 8 rupees between the morning and the evening peaks as against the midday hours. That makes storage viable. And, you know, there is already a huge pickup in storage capacity addition. This year, we are expecting almost, I would say, 20 gigawatt hours of storage capacity addition between the merchant and the non merchant markets, and that number should more than double over the next two years. So I think a lot of storage capacity is coming up. On top of that by FY 'twenty nine, you will see at least 40 to 50 gigawatt out of pumped storage capacity coming onto the grid.

55:19 And then you have to take into account that the distributed solar market, which is not really affected by any of these transmission constraints and which used to be about 15% or 20% of the total market, Today is almost 40% of the total market size. So we are seeing much more growth coming from Suresh, Arjuna and Kusum schemes, even the C and I segment, because C and I segment, mostly those projects are implemented at the interstate level where there is much less grid congestion. So they don't typically face the same kind of challenges as Europe. Okay. And just a quick one. The margin of your merchant sales, I mean, sales selling to the merchants.

56:12 So just one question on the DCR sale margin side. So how much margin you are making on the merchant sale? And... Yeah. No. So Understand what is merchant sale? Sell sales in the market. No. Yeah. You want take Yeah. I mean, see, we have all the Yeah. So my question is basically to understand if we are selling the DCS cell outside or the merchants, what is the profitability of those cells rather than consuming in house in terms of margins and in terms of cost saving in house.

57:00 So the margin on DCS side, if you can sell side, if you can tell me. I think the last question was about margins on self sales. And I was just saying that we don't release as a company, don't give out any kind of margins by product segment. So unfortunately, I'm not able to share any information on that. Okay. Fair enough. But just a broad direction on this side that we are making more profits or the profitability is high selling outside the sales compared to consuming in house? Right now, the situation is, just trying to understand. No, I won't say so.

57:47 People are buying cells only because there's a lot of demand for DCL modules and they're able to and making DCN modules remains a profitable business. So I think there is no such thing as making sales is more profitable than making making modules. And we continue to be present in both the businesses, have a more diversified presence across segments and customers. Okay. Any percentage if you can share how much we are selling outside and how much consuming in house? So in general, we have said in the past that we want to maintain a business split of fifty-fifty for our cell production, 50% to be sold externally and 50% to be consumed internally.

58:41 But that proportion is going to get more and more skewed towards domestic consumption as ALMM2 gets implemented and we see a demand picks up. Up. The next question comes from the line of from Sequent Investments. Hello, sir. Can you hear me? Yes. I can hear you, sir. Go ahead. Yeah. Yes, sir. I just have one question. Because you work super close with the industry, last week, there was The current participant's line has been disconnected.

59:31 Ladies and gentlemen, to ask a question, you may press star and 1. I think we've come to the end of the one hour mark. So we can take maybe one last question. We have the next question from the line of from from Sequium Investments. Please go ahead. Hello, sir. Can you hear me? Yes, sir. I can hear you. So I just have one question from my end. I just want to understand the industry perspective. So last week, there was an article wherein it was stated that small module and cell manufacturer players were shutting down their manufacturing capacity because it was not fungible for them. Feasible for them. Sorry.

1:00:17 So I just want to understand because you work super close with the industry. How is the industry shaping out as as more and more module and full capacity is being added? And are you witnessing any industry consolidation? Hi, Raman. Definitely. So I think, you know, the three or four main parameters on which all the players in the industry compete on, Basically, are scale, vertical integration and technology. And the shift to ALMM2 and ALMM3 is only going to accelerate these trends and favor companies with the largest capacities, best technologies and proven track record, etcetera. So, I think it is inevitable that some of these smaller manufacturers who are not vertically integrated will find the market very, very tough.

1:01:16 Margins have almost completely, I would say, vanished at the module manufacturing end and the entire profitability pool has shifted up stream to the cell business. And henceforth, the market will be dominated by larger players, integrated players with cell and going forward in cotton wafer capacities. So just consolidation in our mind is inevitable in the sector. Just a follow-up on this, a small note. Going... I mean, when it comes to module manufacturing, there was no entry barrier for any business to come. And with cell, the entry barrier is... There is a little bit of entry barrier. So going forward, will it be of more backward integration into and polysilicon, which will create a entry barrier and which will make sure the margins are sustainable, or will it be the volume share, volume of integrated cell and solar cell and module and input wafer capacity? What will be the differentiating factor between the leaders?

1:02:25 See, the... You know, all the upstream manufacturing is a highly capital intensive and technology intensive business. So while there is no entry barrier per se, but just the fact that you require a significant investment in cell and in port wafer lines, lot of operational expertise, latest technology that itself acts as a entry barrier. Plus all these businesses benefit massively from scale. Any company which has got, let's say, scale of 10 gigawatts will enjoy massive advantage in terms of cost of production, logistics, working capital, etcetera. And they will be able to basically dictate the market in terms of volume as well as pricing. So I think there are lots of... I mean, not entry barriers per se, but there are lots of advantages favoring companies with scale, vertical integration, and technology.

1:03:28 Thank you, sir. Thank you so much. Thank you. In the interest of time, that was our last question. And I would now like to hand the conference over to the management for closing comments. Thank you, and over to you. Yes. Thank you. Thank you, everyone, for your interest. We appreciate your time and interest in Premier Energies. The business, as we said, is poised for rapid growth in the coming quarters with all the new capacities coming online. At the same time, we are also preparing ourselves for more competition. There's a lot of work going on behind the scene in terms of more cost competitiveness, making sure that we optimize every single part of our operations. We innovate on the technology front, and we build a good portfolio, a diversified portfolio of products and technologies.

1:04:28 So with that, we believe the overall outlook for the business, both in terms of top line and bottom line growth is very, very attractive. And as usual, we are very grateful for all the support that we get from the financial community, and we look forward to working with you. Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.