Mundra SPPA signed with Gujarat (4 states in 4-6 weeks).

On the 3rd Quarter call you had expressed confidence that the Company would be able to achieve its target of Rs. 210 billion of CAPEX, implying nearly Rs. 9,000 crores to Rs. 10,000 crores of CAPEX in Q4. So, what led to the shortfall on CAPEX? And in the December Analysts Meet we spoke about 588 megawatts of renewable capacity addition in Q4 against which 166 megawatts have got added. So what are the challenges here which delayed your CAPEX and your capacity addition targets?

So our CAPEX for the whole year is Rs. 16,200 crores, for the 4th Quarter it was Rs. 4,000 crores plus. There were some delays in execution of projects. One was in the renewables, some of the locations, the transmissions, and evacuation system, which is being done by the other companies, they could not be set up. And because of those delays we could not complete the project in time and evacuate the power. The second is some of the transmission lines that we were doing, those also got delayed because of right of way issues. We have been able to sort that out. And whatever we could not complete in the last quarter, we will be able to meet all those in this quarter. So, it's not that they have been deferred but it's just that the implementation timeline has got a little delayed for various reasons. And we are on track to make up in the coming quarters.

So the transmission evacuation issues are largely sorted to commission 2.5 gigawatts plus of renewable in FY '26 like you targeted?

Yes. This year we will commission nearly 2.5 gigawatts to 2.7 gigawatts of renewable projects. Last year we actually completed the 2.3 gigawatts of projects.

Sir my question was on, what will be the proportion of third-party sale in your solar module and cell business, because that is not going to get eliminated on consolidation?

I think we have huge backlog of orders that we need to execute. We ourselves have large projects and it's for our own Company. In addition to that, we have some third-party EPC obligations which we need to complete in the next six months. So, at least till this 3rd Quarter we do not have any excess capacity. In addition to that, as I mentioned to you, we are going to increase the supply to rooftop solar. And again, nearly 1 gigawatt will be required over there. So I think that we have a huge pipeline of orders to be executed. And most of these cells and modules that we will produce will get consumed ourselves. Maybe in subsequent years we might have some extra capacity for third-party. Sanjeev Churiwala: And just to add to what Dr. Sinha said, when we say in-house consumption, even our third-party EPC that we do, finally the profit will also boil down to the consolidated profit of the renewal businesses. So kind of if you look at a console basis, all the DCR cell that goes to third-party EPC businesses that we are doing and we do have a backlog of that, that will add up to the profits.

Okay. So your third-party order backlog is how big right now for module cells? Beyond the solar Rooftop?

I think next year for sure we may have about the delivery of 1 gigawatt or around so, to be done for the third-party EPC. Yes, Sumit, it's beyond solar Rooftop.

There is a Note Number 2 which talks about some adjustment from the CERC judgment. What is the impact of that Note Number 2 in this particular quarter?

There is no impact in this quarter. This pertains to the earlier quarter, which we have already discussed, the CERC order dated 3rd January 2003. This order is kind of more supporting us in terms of collecting our receivables. So there is no impact on the P&L, because to that extent, as and when we are selling, we have also been booking as per the MOP orders. So, there is no impact on the P&L.

Is it possible to break up the CAPEX layout across the various businesses for FY '26?

We have about a CAPEX layout of close to about Rs. 25,000-odd crores for next year. And if I do a breakup, around 60% of the layout allocation will happen in our renewable businesses. Given that we are also growing our transmission and distribution, CAPEX of about 30% odd will go there and the remaining are there. But this will remain dynamic. This is a broad allocation that we are starting the year. But depending upon the situation on the ground, the allocation might change.

On the cell module manufacturing business. I see in your presentation that we have commissioned a TOPCon pilot line as well, would you mind throwing some update on that? When do we intend to upgrade our PERC capacity?

So, right now we will continue with the 4 gigawatts of Mono-PERC and 300 megawatts of TOPCon. So that whatever technology we have used and the efficiency that we are getting, we maximize on that. Whenever the opportunity and the market demand is there for TOPCon, we will examine it at that stage. But right now, we will continue with the operation of these lines.

Regarding the ordering for the wind plants. Wanted to know if we are through with all the orders that could be placed?

Yes. In the final stages, hopefully in the next three to four weeks.

On Mohit's question on media articles around thermal - it seems you indicate that if there's an opportunity that comes along, you may look at it. Is that a strategic change? Because the earlier target was that you will phase out all the coal plants by 2045. Is there a change in that strategy that you might be opportunistic, and you may not phase out all the coal plants?

So, our end date of 2045 continues to be there. So, it's the end date of where we will divest or we will close down the plants by 2045 for all the coal-based plants where we have the PPAs. But as I mentioned to you, if there's some stressed asset or some asset which is there, and typically they would have been in operation for some period, we can look at that. But these are, again, very speculative at this stage. There's no plan per se that we are immediately going for anything like that.

On the RE, I know you acquired more ISTS connectivity, and there have been some delays in transmission evacuation. What is your intent, you are acquiring more transmission connectivity? Given the issues we have seen in transmission ROW, is that why you are holding off on more aggressively building pipelines beyond the next two years?

So, as you are aware, there are challenges in acquisition of land and getting evacuation permission. So, as a long-term investment strategy, we continue to acquire land in various places, and also keep on applying for connectivity, so that we do not have to start looking for it when we win the project. And as you are aware, we do a large number of projects, not only utility-scale, but also under group captive for various industries as also for many of the group companies in Tata Group. So we definitely would be quite aggressive in the acquisition of land, as also getting the necessary connectivity from these locations.

On very high margins you report in rooftop solar, and also Odisha Discoms - I think there is some ECL provisioning write back. Just wanted to understand that ECL provisioning and what basically drove the profitability in Odisha, and also the rooftop solar?

So I think you are right, there are two different businesses. On Odisha, of course, as you can see there is a continuous reduction in the AT&C losses, better efficiencies has come in, better billing and better collection have happened. And back on this we have better profitability. They are having some ECL provisioning in terms of clearing up some of the past dues. But even after providing for those ECL provisioning we delivered a very good set of numbers in Odisha. And hopefully, we have created a good baseline to kind of grow from here. So that's on Odisha. On the rooftop businesses, I think the 4th Quarter has been a phenomenal quarter for us where we have delivered good growth. When you look at the numbers of rooftop for the quarter we have kind of delivered close to about Rs. 860 crores, Rs. 870 crores in terms of the top line revenues with a very healthy PAT margin. And that demonstrates our ability to penetrate the market, capturing the market share, getting a premium for our product based on a high amount of trust that the consumer has. We are kind of operating with 600-plus channel partners and we want to ensure that the growth that we have in the 4th Quarter we can continue this growth in the coming quarters as well.

The Government of India has come out with the new Shakti Scheme, which allowed imported coal-based power plant to source coal from the domestic sources. Do you think it makes sense for Mundra to tie up the domestic coal in the long term?

The Mundra plant is designed for imported coal, and imported coal has different chemical characteristics. It's not just the heat rate but what is the sulfur content, nitrogen content, what is the ash content. So there are a whole lot of chemical characteristics that it needs to comply to. So we need to consider all these aspects when we go for change in coal. So, because of that reason, for us it does not make sense to go for domestic coal. Secondly, the cost of coal if we get from eastern part of India, especially in terms of the transportation cost, is very high. And for us, until and unless we are able to have a very differentiated arrangement which brings down the cost of coal, and also brings down the transportation cost, it will not make real sense to move to any other coal than what we are using at the moment.

Is there any update on the financial closure of the Pumped Storage Power Plant which you are building up the facility with 1,000 megawatts?

So, yes, we are working on financial closure. The discussions are happening with the banks. We have just started the work, so we still have a few months to close that. Dr. Praveer Sinha: Yes. But the work is going on at the pumped storage project. So, notwithstanding the financial closures, the internal accrual is supporting the investment that is required for the project.

I was interested if the Company is expanding in battery energy storage system?

Yes. We set up those projects as a part of the complex renewable projects. So, we arrange source batteries from suppliers and combine it with solar and wind projects that we set up. So, it's a part of the hybrid solution that we are implementing.

Are there any challenges in the renewable sector in point of view with the government policy?

No, there are no challenges, nothing like that.

Just wanted to understand some operational and financial metrics on the Mundra Coal and Shipping line item in the cluster-wise performance slide, where we have seen a very good improvement in profitability and PAT in FY '25 versus FY '24, meaning Rs. 57 crores of PAT going up to Rs. 107 crores. So, what is driving this? And some color on how much spreads we are making per unit in Mundra and what would be the outlook for '26?

So, if you are looking at the full year PAT, there are a couple of things there. A, suppose last year and this year the plant continues to run on Section-11, last year one unit was down so we were running on four units, this year we are running on the five units, so to the extent there's better contribution coming through. And that's the key reason. And there we have one of the regulatory upside coming in for Mundra, which was pending for the last almost a decade now, which has been reported in the earlier quarters, almost at a figure of Rs. 332-odd crores. So that is because of that.

Again on the pumped storage plants where you have started the work, what is the status of long-term PPAs there? And in case the PPA is not there, do you think financial closure will be possible from financial institution side?

So, pumped hydro is being developed to basically give bundled power along with solar and wind. This will be done for both the utility-scale projects as well as for many of our C&I customers. This is a work in progress. This will take at least six more months for us to get finalized, so that we have maximum value for the investment that we are making in this project. As you know that many of the companies have to go for 24/7 renewable power as well as many of the Discoms are wanting to do that. Pumped hydro has a unique ability to give this power 365 days for eight hours every day. So, I think we need to position it in such a way that whether industries or utilities, they want certainty on the pumped hydro plant, they will be going for this along with the other renewable sources.

So, I guess the consol margin comes at around 8% to 9%, but the EPC is still in the range of 5% to 6%? Initially the sense was that the EPC segment, excluding the rooftop, could scale up to a level of around 7% to 8%. We had this concern that we had orders which were at a low margin business, and we had executed those low margin EPC work, so the upcoming orders would be of a healthy margin. But still we see the margins to struggle somewhere in the range of 5% to 6% only.

Yes. EPC business, if you look at it, we are delivering a margin of close to 5%. I do not know where we are kind of missing your expectation. In slide number 62, for the quarter, for the EPC we delivered less than 3%. For the full year as well, we are delivering at 5%. And throughout the EPC business, and I think for the last couple of years we have said that we kind of want to maintain a margin profile of 5%. So that has been very consistent as well. And it's kind of done better than the previous year now. You see, for the last full year, when the margin was 3.3%, I very clearly remember we said that we are targeting 5%, and this year we are delivering 5%.

And on the wind side? Wind PLF which continues to be at around 20% PLF.

So, see, what happens is whether it is wind or solar, what we need to ensure is the availability of the plant. And the availability of all these plants has been in the 99-plus range. The PLF is dependent upon the wind speed or what is the solar level. So, last year the wind speeds in many places were not very good. And that is why the wind PLFs are low. But our plant availability continues to be very high in all places. Sanjeev Churiwala: Yes. And I think to be very precise, slide number 61 of the presentation has the full detail. And normally when we look at the wind PLF, we are in the zone of 19.5% to 20%. And that is what perhaps is the right zone.

For your Tata Power Solar EPC arm, what's the overall order book currently? Of this Rs. 11,000 crores, how much would be external? How much would be for own Tata Power?

It should be about close to Rs. 11,000-odd crores. Dr. Praveer Sinha: Rooftop is separate, this is the large utility scale. Around Rs. 4,000 crores would be external and remaining would be our own.

I have another question on Odisha Discoms, we have seen a sharp jump in the profitability in Q4 as well as for the year. So how sustainable is this? And what would be a kind of long run kind of PAT we can assume from this?

So Odisha Discoms had their huge challenges because there were a lot of issues regarding billing, collection, meters. And they were also large, old outstanding. We have been able to take care of all those things, including ECL provision. And what you have seen in Q4, a similar trend you will observe because the whole process has now been streamlined. And the performance in the future quarters will be consistent to what sort of performance you have seen in Q4.

On UP privatization, we are hearing that five circles are going to be demarcated for private sector participation. So, is there any condition that one private player cannot take more than one or two circles or can take more than?

We are still waiting for the bid documents. They have appointed a consultant. And what I understand, by the end of this month the bid documents will come and we will get some better clarity on that.