Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Torrent Power Ltd (BOM:532779, Financial) reported a PBT of INR689 crore for Q2 FY25, which includes a nonrecurring credit of INR67 crore.
- The company was awarded pumped storage hydro projects of 2 gigawatts in an auction conducted by MSEDCL.
- Torrent Power Ltd (BOM:532779) has a pipeline of 3 gigawatts of renewable power projects and 2 gigawatts of pumped storage hydro projects.
- The company is expanding into green hydrogen, with a pilot project in UP and an allocation of 18 Ktpa of green hydrogen production under SECI PLIs tender.
- The company has identified project sites with a potential of 8.4 gigawatts of pumped storage hydro in Maharashtra and UP, with pre-feasibility studies completed.
Negative Points
- Reported PBT for the quarter decreased by 7% compared to the same quarter last year, with a reduction of INR52 crore.
- Contribution from the thermal generation business reduced by about INR80 crore due to lower merchant power sales and higher O&M expenses.
- The renewable generation contribution decreased by INR29 crore due to lower PLF from existing wind and solar power plants.
- Employee costs increased by 18% and other expenses by 14% compared to Q2 last year.
- The company faced challenges with lower electricity demand due to extended monsoon, impacting merchant sales and wind and solar PLF.
Q & A Highlights
Q: There seems to be a significant increase in employee costs and other expenses in Q2 compared to last year. Is there any specific reason for this?
A: The increase is due to normal staff cost increments and higher O&M expenses for merchant sales. Additionally, a noncash foreign exchange loss of INR24 crore was recorded as other expenses.
Q: Regarding the Bhiwandi franchise area, the agreement is expiring in January 2027. Are there any plans for extension?
A: The franchise agreement has a provision for a five-year extension with mutual consent. Discussions with MSEDCL for extension will be initiated at the appropriate time.
Q: Can you clarify the merchant EBITDA figures for the current and previous quarters?
A: Last quarter's merchant profit was about INR40-42 crore. This quarter saw a reduction of INR35 crore, resulting in a current quarter profit of about INR7 crore. The subdued market due to monsoon impacted these figures.
Q: What is the status of PPAs for your renewable capacity?
A: For renewables, 1.5 gigawatts of operational capacity is fully tied up. Out of the 3 gigawatts under construction, 200 megawatts are untied, mainly for merchant sales. The rest have signed PPAs or received LOIs.
Q: What are the challenges faced in evacuating the upcoming renewable capacity?
A: The main challenges are land acquisition and evacuation. However, 80% of the land is in possession, and all core connectivity approvals are in place for the projects under construction.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
