If you look at our cash flow for the year FY26, we have operating cash flow of almost INR11,000 crores, and we are having capex of INR14,431 crores. So effectively, our free cash flow negative INR7,500 crores. What is your view on the balance sheet leverage?
Most of our assets, we generally finance it in the ratio of 70:30. So only the equity portion is funded through the internal accruals. So balance is tied up through the debts. From that position, we are fully comfortable to meet all our existing capex requirements in transmission, smart meter and even distributor.
On the BESS versus HVDC debate in government documents, is it the cost becoming a challenge or the integration becoming a challenge?
That debate is going on at a policy level as to how much of transmission capacity that country should add because it also has a cost implication, especially for renewable project. The debate is that should we push as a sector the installation of more co-located BESS so that transmission costs could be optimized. But what is happening is that while the interstate transmission line will continue to get crystallized and come into bidding, we expect to see a lot more activity from a state side because all those transmission corridors which are created or which are being created for taking renewable energy to load center need state level investments. So we see a lot of opportunity coming from state side as well.
From INR8,000 crores for the last year operating profit, at what stage do we see doubling of that? And in what time period we think it will triple?
This year, last year, the consolidated number was INR8,726 crores. Our business other than C&I is all capex-based business. And the moment we capitalize, we add that profitability. And as we discuss on the capex and capitalization plan for coming year, that will directly translate to addition of EBITDA. So next year, given the capitalization plan, we expect that number could be around INR11,500 crores.
Can you help us with your expectation for capex in FY27 and FY28 for three businesses separately?
Yes, sure. So we will have about INR22,000 crores of capex next year, of which transmission would be about 15,500, distribution about 2,350, smart metering about 3,900 and -- so these are the numbers. So we'll be around 21,000 -- between 21,000 to 22,000. For FY28, it will be around 23,000. Of that the transmission would be about 20,000. Distribution, again, will be about 2,000 and smart metering, given the order book, we are not assuming the additional one. But given the order book, it will be 1,500 and whatever the additional order that will come will get added. So somewhere between 22,000 to 25,000.
Is it possible to share the expectation for capitalization or commissioning in FY27, FY28? And can you also help us understand whether you have included the Mumbai HVDC completely in FY26?
Yes. So Mumbai commissioned in FY26 only in the last month, completely, 100 percentage. And the capitalization number in FY27 would be about 21,000, 22,000. In FY28, it could be about 13,000. And thereafter, the capitalization will improve especially in transmission because those HVDC projects that will start getting commissioned from FY29.
Can you help me what is the capitalization for FY26? And if you can also break it up between transmission?
So '26 is about INR15,000 -- INR15,300. Transmission is INR10,260; distribution, INR1,511 and smart metering INR3,556.
On the C&I, you mentioned about 5 gigawatt you have tied up. It seems the government is also looking at giving distribution licenses to these large hyperscalers. How does it position us?
Certainly, even if they become a distribution licensee, they will have to source power. And because their requirement of power will be very, very peculiar, that is where we come in, especially from power infra side as well as from supply side. So now we having got capacity of solar, wind as well as BESS with us, we are in a position to offer that kind of a solution to, whether it is a customer or the deemed distribution licensee given to a customer.
The installation rate was quite impressive in the fourth quarter. How should we think about FY27 smart metering? And when is the next opportunity to do more tenders?
Next year probably we'll be doing about minimum about 1 crores meters. Having done 83 lakh meters in the current year, we are confident that we'll be able to install another 1 crores meter in the current financial year. As far as next opportunity is concerned, the remaining opportunity in the market is about 9 crores to 10 crores meters. The opportunities which are still pending in the market are Tamil Nadu, Karnataka whole state, Telangana whole state, Andhra Pradesh part, Gujarat part and MP part.
On transmission, can you quantify the EBITDA run rate contribution from projects that have come on in fiscal '26 into fiscal '27? And how should we think about the win rate?
Currently, we are about 20 percentage, 25 percentage. We have improved this year to close to 30 percentage. So we will continue to maintain that market share between 25 percentage to 30 percentage. That will be converted into amount, it will be INR40,000 crores, INR50,000-odd crores of new opportunity for us in the transmission itself. And this year, the capitalization which has happened for transmission on fully run rate basis, we will be able to add another INR1,600 crores of revenue by those commissioning of existing projects.
How do you expect to book revenues for Mumbai HVDC in FY27? Will it be at provisional tariff or the full project cost?
So as you know, this is a RAB-based project and once the tariff is approved by the regulator, you are entitled to start billing to the regulator. So currently, the number is INR1,300-odd crores which is the full year tariff from the Mumbai HVDC project, which we will start accruing from next full -- next financial.
Can you help us the progress on the 2 HVDC projects which we are working on right now in terms of percentage completion? And could you also address the ROW challenges?
So as far as Fatehpur-Bhadla HVDC is concerned, the construction has already begun, both at a substation and a line level. And we haven't faced any significant ROW challenge as far as that project is concerned. As far as Khavda-Olpad is concerned, we have finalized all the contracts, but the construction has yet not started, it will start. So Khavda land is now already under the possession. Land at Olpad, we expect to get possession from Power Grid in maybe a month's time. And once we have that, we will start construction at both the places.
Your 12-month pipeline INR1.5 trillion tender pipeline - is this entirely an opportunity in the next 12 months? What would be the 12-month number?
12-month would be about INR80,000 crores to INR1 lakh crores, depending on how bidding process proceeds. But we expect that bids about INR80,000 crores to INR1 lakh crores will get finalized.
What is the intrastate opportunity on an annual basis?
So intrastate would be around INR30,000 crores to INR40,000 crores collective all state together annually.
When transmission EBITDA triples, does that take into account some amount of additional smart meter contracts or based on the current contracts only?
Based on the current smart meter contracts of 2.46 crores meter. And INR72,000 crores of the under construction pipeline would translate to an additional tariff of INR10,000-odd crores once this entire project gets completed. The distribution business will have currently INR2,500 crores EBITDA, which will translate to close to INR3,000, INR3,200 numbers. And smart meter business will also start generating INR2,400 crores to INR3,000-odd crores of EBITDA trajectory once the entire smart meter numbers complete.
To what extent do you see the revised compensation scheme positively impacting the ROW issues this financial year?
ROW, there are two kinds. One is where you require a permission - forest clearance or wildlife sanctuary clearances. The second part is ROW from the general public, where there is an ownership of the land from farmers or individual. Now all the governments, state governments as well as central government is very serious about this particular problem, and they are also trying to systematically sort this out. We have also seen now police protection being utilized very frequently for getting ROW.
Any equipment that is being sourced from China or you plan to source from China?
We can't source equipment from China. As per conditions of the bid, we can't use any equipment manufactured in China if it is through TBCB. So we don't envisage any such import from China for our TBCB projects. On the supply side, the challenges we are facing as a sector in the country is easing out. A lot of new capacity is being added as far as GIS, transformers, reactors are concerned. And GEs and Hitachi's of the world has invested in India in their manufacturing capacities.
For district cooling opportunity - are we not looking at tying up opportunity at the early stage and figuring out a solution while those large mega clusters are being developed anywhere in the country?
That is where we are working very actively. In fact, we have just got a concession, I had mentioned in last call as well. We got a concession from one of the cluster development happening in Chennai. We are also talking to various state government and wherever so we see a great opportunity there. It may not be a sizable today. But going forward, Bharat bhai, we think that it is going to be a big one.