Acme Solar Holdings Ltd (NSE: ACMESOLAR) Q3 2025 Earnings Call dated Jan. 29, 2025
Corporate Participants:
Nikhil Dhingra — Whole-Time Director and Chief Executive Officer
Manoj Kumar Upadhyay — Chairman and Managing Director
Ankit Verma — Executive Vice President, Corporate Finance
Arun Chopra — Head of Finance and Account
Purushottam Kejriwal — Chief Financial Officer
Analysts:
Mohit Kumar — Analyst
Puneet Gulati — Analyst
Ankit Mittal — Analyst
Subhadip Mitra — Analyst
Tejas Fulbaduwa — Analyst
Gopal Nawandhar — Analyst
Abhinav — Analyst
Akash Mehta — Analyst
Nikhil Abhyankar — Analyst
Jainam Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3FY25 earnings conference call of Acme Solar Holdings Limited hosting by ICICI Securities. 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. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you. And over to you, sir.
Mohit Kumar — Analyst
Thank you, Alaric. Good morning. I welcome you all to the Q3 FY25 earnings call of Acme Solo Holdings. We have with us the leadership team of Acme, led by Mr. Manoj Kumarupadhyay, Chairman and Managing Director.
Without much delay, I would now like to hand over the call to the management for opening remarks followed by Q and A. Over to you sir.
Nikhil Dhingra — Whole-Time Director and Chief Executive Officer
Thanks a lot, Mohit. Good morning and a very warm welcome to everyone present on the call. Along with me I have our chairman, Mr. Myself, Nikhil Dhingra. I’m the CEO and director on the board of the company. I have with me Our chairman, Mr. Manoj Kumaru Padhyay, the Founder and the Chairperson.
Manoj Kumar Upadhyay — Chairman and Managing Director
Good morning to all of you.
Nikhil Dhingra — Whole-Time Director and Chief Executive Officer
Ankit Verma, Head of Corporate Finance, Purushottam Kejriwal, our cfo, Arun Chopra, our Head of Finance and Accounts and Strategy, Growth Advisors, our Investor Relations advisors.
So what I’ll do is I’ll briefly take you through the presentation which we have uploaded on the stock exchanges. So you can, if you want to, you can refer it as well. I’ll start from page five but I’ll take, I’ll do it quickly such that we have more time for Q and A.
So in this quarter it has been a very execution focused quarter for us. We have added, we have essentially doubled our capacity from 1340 to 2540 we reached, so we have increased by 90% and this is due to the commissioning of our 300 into four 1200 megawatt of solar capacity which is tied up with SECCHI. So now our operational portfolio is 2540 megawatt. Like we updated you last quarter in terms of gigawatt peak, it’s 3.6 gigawatt peak. So that is a more substantial update in this quarter.
In terms of the portfolio split, now the Central offtakers constitute 67% of our portfolio and states only constitute 33% of the portfolio which is of course improving the credit rating of the overall portfolio and overall utility business we have in terms of the new orders and growth side, we have 1,900 megawatt of capacity in this financial year. So our total contracted portfolio is 6.97 gigawatt. And in this 1900 we have FDRE which is the peak power contracts of 1000 megawatts, solar of 600 megawatts and hybrid of 300 megawatt.
In terms of the PPA signing which is a very important metric for starting of our projects because PPA is the zero date for us to monitor the two years we get for commissioning the plant. So we have many successfully signed 2340 megawatt of PPAs out of our under construction capacity of 4430 megawatts. Similarly, another important issue which has come up is the adoption of these tariffs, because that’s another milestone which also is very important for us to determine the zero rate of the PPA. And for that, we have done 2,500 megawatts, which is again, more than 50% of this capacity. So in both these regards, we are up more than 53% of our under construction capacity, 450 megawatts part of our capacity is in advanced stages of construction. So that is something which is in very advanced stages.
Coming to the next slide briefly, we have done the IPO in November. So we have used all of their proceeds to reduce our debt like we had mentioned. So debt has been reduced by around 2070 crores which has resulted in a steep reduction in the net debt. So, so net debt is now at 6882 crores in this quarter as compared to 8755 crore in the previous quarter.
In terms of the greenfield financings we have sanctioned 16,500 crores. So basically around 40% of our debt is now tied up in the under construction projects. And in terms of the refinancing we have refinanced essentially 50 to 55% of our debt which is around 5,500 crores. So at an average rate of 8.8% per annum. So this results in two positives for us. One is the reduction in cost of debt and second is the cash release which is one of the sources of accruals for us in terms of the future funding.
Grid connectivity is of course very important for a utility like us which is connected to the central transmission system for providing power. So we have connectivity in place for 100% of our under construction capacity. And of course we keep on building our watches. So we have around 2000 megawatt available for future bids.
In terms of the next slide capacity roadmap. So 2540 megawatt which is operational for us will give us a run rate annual project ebitda of around 1750-1800 crores. That is basically something which we already have. So we will continue keep giving this guidance from the operational assets. Right.
And in terms of the ROCE which is basically pre tax ROCE, we do 14.5%. So this is another metric which we’ll keep on giving to all of you as we move forward. Basically the operational project run rate, EBITDA run rate and operational project roc. Basically the ROC from the company in terms of the. So we are at 25:40. We will make all efforts to achieve this preponed this. But in the base case we have 6970 megawatts of capacity which will be operating by FY 2728. All these projects have different timelines but this is the last date for those projects execution.
Lastly from my side on the operational highlights, we did a large improvement in our CUF. 23.7% is the CUF which we did this as compared to the last year. And this cuf, I can say for sure that this is going to increase because the proportion of high CUF projects have increased in the portfolio. So from the next quarter you will see a much better number on the CUF in terms of generation. We sold around 250 crore units in this nine months, which is a substantial jump of 35 4.5% units. And in terms of plant availability our plants are running at 99.4% availability and a grid availability of 99.6%.
Thanks a lot. I’ll now ask Ankit to give you update on the financial highlights quickly.
Ankit Verma — Executive Vice President, Corporate Finance
Thank you Nikita and very good morning to all the participants. So I’ll refer to the presentation again if you can refer to page number 10 if you have it handy. So here we have reported the Q3 numbers on a YUI basis for both as reported and on an adjusted basis. So adjusted basis means that we have monetized 369megawatt in the last financial year in January 24th. So for a like to like comparison it is pertinent to compare the performance on an adjusted basis. However I will give you the updates for both reported as well as on like to like comparison. So our total revenue for the quarter stands at 401 crore which is up 45% on adjusted basis and 10% on reported basis. And this is majorly on account of the phased commissioning of our recent Secchi ISTs 200 megawatt plant.
Our EBITDA for the quarter stands at 359 crore which is substantially up 59% on a like to like comparison basis and 45 and 15% on reported basis. And as far as margin are concerned they are like 90% on the reported basis on account of the higher operating leverage because now we have higher pays of operational assets.
And our PAT for The quarter stands at 112 crore which is up 152% on like on reported basis and which is up 317% on a like to like asset basis. Our cash pat is for the quarter is 189 crore which is up 52% on reported basis and up 1.9% emphasized on like to like asset basis. And the last thing here is the pat margin which is for the quarter is 28% as compared to 10% in the last quarter or yoy basis.
Moving on to the standalone financial which is you know page number 11 if you look at the nine months. So for the nine months our revenue total revenue for the nine months is 1036 crore with an EBITDA of 917 crore which reflects a EBITDA margin of roughly 89%. And on the standalone financial basis which is which reflects our profitability from the in house EPC business that we do for our own subsidiaries, our total revenue for the nine months is 1203 crore with EBITDA of 407 crore and PATO for 99 crore respectively.
On page 12 we have covered the gross log and the net debt. Our net debt as of December 2024 stood at 6882 crore which comprises 670 crore of operational debt and 813 crore of debt for the projects which are under construction. And if you look at our, some of the key metrics in terms of net debt to ebitda. So if you look at the net debt, operational debt on an annualized EBITDA basis for the current financial year, it will be around 5x which is below our guided range of 5.5x. And our net debt to equity after raising the primary capital from the IPO currently stood at 1.6x.
These are the major updates from the financials point of view. With this I would now request to open the floor for questions which our team will be happy to answer.
Questions and Answers:
Operator
Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Puneet Gulati from hsbc. Please go ahead.
Puneet Gulati
Yeah, thank you so much and congratulations on, you know, good performance, good capacity commissioning and a detailed presentation. My first question is with respect to the capacities that are highlighted under the LOA status, can you talk a bit about, you know, how soon can we see them getting converted? And, and if you think of any capacity we could get risk of not getting converted into people.
Nikhil Dhingra
Right, right. So we can, if you have access to the presentation, we can go to page 24 here. We have given the detailed status of the tariff adoption, various steps in the overall PPA signing. So the first thing is loa, right? We have LOA for all of this capacity, right, which is around 4.7 gigawatt.
Now coming to the PPA status, PPA signed for 2340 megawatt we mentioned. I think you’re more interested in what will happen to the rest of the PPA, which is around 2090 megawatt. Right. So in the. So in terms of the two projects, 380 megawatt of FDRE with Secchi and 350 megawatt of the RE with Sechi. Again, half of the BPAs have been signed. So these are expected to be signed shortly. In terms of the first, they’ll be first to be signed because they have been partially sold. So they are more likely to be sold. And of course the order has been reserved for tariff also, because now that is something we also track.
And in terms of the other ones. So we are quite positive that the NTPC once again will be signed shortly. So of course we don’t have because the this is up to the agency to do it quickly. But what we understand in the last quarter or so the PPA signing has really picked up pace because lot of FDRE tariffs have been adopted and lot of states have already done like up has done 1200 megawatt for our NHPC bid which we signed yesterday. 680 megawatt of PPA we signed yesterday. We don’t have the the. The SECI to state government status because that is up to SECI to but what do we understand is the top two ones will be signed very quickly. The rest of them are also very advanced but of course and we are hopeful that they will be done in next couple of months. But this of course we keep on tracking with the counterparty we are not able to track with the state governments but of course.
We are updated that the central government is quite positive about getting these power offtake done because as you know ACLM has also come into being. So the tariffs are expected to go up as we move forward. So these become quite attractive if you purely look at commercial angle in terms of these tariffs. Plus as I said the tariffs have been adopted in the recent past so there is a good metric for all of them and the tariffs are in the range of what we have done in the last two years. So we are quite hopeful that they will be signed soon.
In terms of the tariff adoption we have given detailed status wherever the order has been reserved. So order reserved means the order will be out in next couple of months because that is a time cycle CRC takes and we will be updating these petitions and order reserve for tariff adoption. Also in our quarterly presentation.
In terms of the grid connectivity we have the grid connectivity for all of them. So in terms of the if you look at our preparedness, so grid connectivity is there with us. We are of course moving forward on the land and transmission line because that’s a very low capex item but of course it takes long time so we keep our preparedness such that we get a head start whenever the PPA gets signed.
Puneet Gulati
Just a bit of education on the solar one 300 megawatt SGVN where you talk about order reserved. This presumably is yet to see PPA done, right? I mean an order is the CRC order you’re talking about of the PPA order.
Nikhil Dhingra
So all of 2090 is yet to see PPA. Yeah. So 2340 have seen the PPA right? The 2090 yet to see the PPA. The there are two tables right in this slide. So. So the 2340 has seen the PPA megawatt 2,090. The whole of it has to see the PPA.
Puneet Gulati
Understood. Second question is there was this CRC regulation which talked about, you know, not providing power charges for informed power. Is that likely to impact any of your projects here?
Nikhil Dhingra
No, actually we, we read that article and we were going to release a clarification. Our regulatory head has drafted it also. He’s going to shortly do it. So see in terms of renewables, right we don’t have any fuel charges and other things. So we don’t, we have no, no issues with that in terms of merchant plant or in terms of the, or in terms of the. You can say the inform power sale. We were of course impacted by it in the last quarter because we had to commission the plant to sell the power because this order became effective from December 22nd. So our all of our plants got commissioned before this order became effective. And of course in renew the merchant plant is also not at risk because we can run our plant without fuel. So but because they don’t get a pass through the thermal projects so they have a issue which we don’t have. So we will not face issues on the merchant plant.
Puneet Gulati
But. But you will miss the extra earnings that you would have otherwise got.
Nikhil Dhingra
No, actually those are not earnings which are factored in any base case. Basically what happens is when you charge the plant typically the inverters charge individually. So you have a phase commissioning, right. Your commissioning time takes around seven months. But that is part of the procedure because you have to give a 15 day notice to CEA to visit your plant because that is how the procedure works. So in those 15 days you can prepare your plant to be ready. So that is so in it was not in the base case. What happened is let’s say if there was early commissioning which people had and they got an NOC from let’s say the purchaser that they don’t want to buy the power for some time then you could sell it in merchant. That was a very special case and it was not factored in anybody’s base case. In those conditions you could have sold powered in exchange basis informed power. So that is like an upside. That is never part of any basis.
Manoj Kumar Upadhyay
No. The other thing I think this is Manoj here. I want to clarify. Actually now more and more distribution companies they are hesitant to give any noc. So the day you generate the power, even if you generating the partial power it is in benefit for them to buy that power. So they don’t be the no seed.
Puneet Gulati
That’s very clear. And just two numbers on accounts. What is the actual cash tax paid during the quarter?
Nikhil Dhingra
Cash pat is what we have mentioned here. It is 189 crores cash pat you mean? Right.
Puneet Gulati
No cash tax, tax that you paid in cash.
Nikhil Dhingra
Tax in this quarter. We will just tell you. Arun?
Puneet Gulati
And also on the other income side if you can break it up between how much is the interest related part to it and how much is you know any other surcharge Inc?
Nikhil Dhingra
Sure. So in this quarter, on the standalone basis, we paid six crores of taxes. Yes. Right. Six crores of tax in this quarter. And on the, on the console, on the power sale, it’s. There’s no tax. Arun will be confirmed.
Arun Chopra
So on the other income side, so interest on FDRs is close to around 30 odd crores fixed deposit.
Puneet Gulati
Okay. And balance up to 28.
Arun Chopra
Balance of 28 majorly includes amortization of the deferred revenue of around 16 crores.
Puneet Gulati
Thank you so much.
Operator
Thank you. The next question is from the line of Ankit Mittal from SBI Mutual funds. Please go ahead.
Ankit Mittal
Yes sir. Thank you for the opportunity. A few questions. So firstly on the cost. But you know cost seem to be fairly under control both on the employee and other expense front. And I think this is despite us, you know, taking over employees from Cleantech. You know if you could just highlight on that, you know, you know what’s happening over there and how do you look at these costs going forward?
Nikhil Dhingra
Right, right. So see in terms of the cost we don’t, we have of course increased it from the last quarter because of the transfer of employees from the ACME Clean Tech to Acme Solar holdings like we had mentioned in our drhp. So it has increased because of that. But in terms of the, the revenue and the EBITDA because we have operational le. So that is why the margins are higher because the HO cost doesn’t increase because of capacity expansion. So going forward we don’t see the HO cost going up. But of course as we do more projects. Right. And that will be part of the project cost of that project. We will hire a lot of people on the project side but that will be part of the project cost of that project. Correct.
Manoj Kumar Upadhyay
So actually to clarify, it is basically as you add more and more megawatts per megawatt cost at the corporate level will go down.
Purushottam Kejriwal
So basically if you see the standalone financials, the costs have gone up. Right. Because there we are doing the ECC and all. But once they move into the. If you see our consolidated financial, the cost being majorly because of the project related people, if it gets capitalized and gets knocked off in the capitalization front. So you don’t see a much steep hike in the consolidated financial. Whereas you see that in the standalone.
Nikhil Dhingra
You can refer to the slide 26 of the presentation. So on the standalone basis our employee benefits have moved up from 24 to 36 crores. And on a console basis they are constant.
Manoj Kumar Upadhyay
They have also taken consideration of rsu.
Purushottam Kejriwal
Yeah.
Manoj Kumar Upadhyay
Yeah. Because we have also factored the RSU you will be issued to the senior management. That is also. Actually that’s around 12 crores. Correct.
Ankit Mittal
So a large part of this is EPC related and that’s why. On the other expense as well on a Y, O, Y basis that number has gone down fairly significantly. I understand there’s been a part sale of assets.
Purushottam Kejriwal
Yeah, yeah. It is because of the 369 megawatts that we divested last year. Right. So the main operational cost has gone out from there.
Nikhil Dhingra
So the largest part of this other expenses is the O and M cost. Correct. Which has gone down because of sale of assets.
Manoj Kumar Upadhyay
And anyway, what will happen, it will further go down because what is happening as we are adding more and more larger megawatt capacity. Earlier we had a 15, 20, 30, 50 megawatt.
Nikhil Dhingra
Margins will improve.
Manoj Kumar Upadhyay
Margin will improve because the larger capacity per megawatt O and M cost is much lower than the smaller capacity the old project.
Ankit Mittal
The second question was on this 1200 megawatt that we’ve commissioned and I think, I think 3Q, you know, would have been a softer quarter because it’s not fully commissioned. But generally, what’s the type of PLFs that you’ve seen at that plant for this quarter and on an annual basis, what sort of PLF should come in from this 1200 megawatt.
Purushottam Kejriwal
Right. This 1200 megawatt is designed to achieve 30% of CUF. When we started, for example, last few days, we are touching 32, 33, 31. Right. So we are touching it. This whole plant will operate at 30% CUF.
Nikhil Dhingra
Because what I’ll just mention the reason. So it is, it is located in the higher GHI zone. I think you have visited that plant. So that is in Fatehgarh. And of course that is one reason we can do the CUF. And secondly, the DC capacity here is, as you mentioned, around 1740 odd megawatts. So 1200 megawatt of AC has, we have put in the capex for around 1740. So these are the two reasons because of which this will do higher and that will also lead to a higher CUF for us overall because the historical projects had a cap on CUF, which newer projects since 2019, 20 don’t have got that.
Ankit Mittal
And just one last question. In terms of near term commissioning, I think we have some 450 megawatt lined up, 150 megawatt of wind and 300 megawatt of solar merchant. When do we expect those capacities to commission?
Nikhil Dhingra
So we, yeah, we are doing our best to commission the 350 megawatt in this quarter. So that is the intent, that 350 megawatt gets fully commissioned. Of course we will do our best to try and do that. It may spill over to April, 350 megawatt in worst case, but that is what we are trying. And the 100 megawatt wind, again, we will try in best case to do it by, let’s say between June to September quarter. So that’s, that’s of course our intent and that’s, that’s what in terms of the other capacities. Also, we have not mentioned it in advanced stages, but we have done most of the activities relating to land and transmission line. Basically, we will only say that whenever we say advanced stages, it is basically when the capex has crossed 50%. So that is what we mean by advanced stages of construction. In some cases it is 70% CAPEX has been crossed. So we will try and evolve some metric where we say advanced and where the stages of the construction of the project are. But as of now these are the projects which are in advanced stages of construction.
Just on this merchant plan, I would like to say that we have won a bid from Seki at 3 rupees 5 paisa which we of course like we had earlier also mentioned, we plan to move this merchant to any of our PPAs. So, so this could be one of those PPAs where we transfer this merchant to Seki and that PPA requires you to supply power before June 25th. So that is one PPA where this merchant could be shifted.
Ankit Mittal
Got that sir. Thank you. Those are my questions.
Nikhil Dhingra
Thank you.
Manoj Kumar Upadhyay
Thank you.
Operator
Thank you. The next question is from the line of Shivadeep Mitra from Nuvama. Please go ahead.
Subhadip Mitra
Thank you for the opportunity with regard to the PPA signing. So I think it’s from your presentation that we have…
Operator
I would request you to be a little louder.
Subhadip Mitra
Okay. I hope I’m audible now.
Manoj Kumar Upadhyay
Yeah, yeah, good.
Subhadip Mitra
Perfect, perfect. So yeah, of that 2340 megawatt of PPA signing, how much would have the back to back PSA signed with the discoms?
Nikhil Dhingra
So Shubha, the process works like the PPA don’t get signed if PSA is not signed.
Subhadip Mitra
Understood. So that would imply the entire quantum has back to back pss.
Nikhil Dhingra
Yes, yes, yes.
Subhadip Mitra
Perfect, perfect. So that’s, that’s great. Secondly, given that, you know, there was a lot of noise around the fact that some of the older projects I’m talking about, you know, on an all India basis, not ACME in specific, but some of the older, let’s say tenders which had gone out were lacking PSA and PPA signing, do you see any sluggishness or any, let’s say slow down in terms of new tendering? Because government may want the older projects to see PPAPs assigning any of that sort happening.
Nikhil Dhingra
So in terms of the, in terms of the newer bids. Right, that’s what you’re talking about. So we don’t see a slowdown. But of course there is a temporary, temporary sort of movement from into ALCM regime. Right. Because that is a big change which has happened where the cells need to be domestically procured. So that will result in shift in tariffs so that we have to see where the tariff stabilises in that regime. But of course in terms of the bidding this year, we see all the four reias stepping up and trying to achieve the 50 gigawatt targets which the government has given. So no slowdown per se because of any other issues.
But I think the ALCM will result in a tariff reset, which on the solar side it will not result in anything on the wind and battery side, but on the solar side, there is a small ALCM related adjustment which will be percentage wise far less in an FDRE tender as compared to pure seller tender. So we believe that it will definitely set in next by March or so. So. And, and this is the quarter generally where the bidding happens maximum because the targets are generally monitored very well in the last quarter.
Subhadip Mitra
Understood, understood. But then, then this also makes the bids that you have won far more attractive. Right? Because under the LCM regime you would probably see a move up in terms of tariffs.
Nikhil Dhingra
Yes, yes, we have to see how much very attractive or more attractive because we, that LCM tariff is yet to be out because. But yeah, it will definitely make them better for the purchase.
Subhadip Mitra
Understood. Last question is with regard to, you know, the newer capacities that you’ve been winning, you know, since the IPO. Right. So we used to talk about I think five and a half to six gigawatt number earlier. Now that number is already closer to seven gigawatts and you’re planning to move towards a targeted 10 gigawatt by 2030. So for the incremental new capacities that are being won after the fundraise, how do you see the equity funding of those projects coming from? Will it be completely through internal accruals itself? Will there be any requirement for further equity funding? If you can just give some color on that.
Nikhil Dhingra
Sure, sure. So in terms of the, the planning of these projects, how we have planned it is that we will finish them by 2028 and that’s the calendar because we have factored in a phase signing and a phase tariff adoption. Right. And because of that, what we are seeing is that we will commission some projects in possibly in 26, some projects in 27. So as soon as we commission, our ability to securitize increases. Right.
Our ability to get cash flows increases. Right. And our ability to get EPC margin increases. So as much commissioning we do, we generate very significant growth in accruals. So as we commission something, our ability to do all these things improves. So because of this phase wise commissioning, we don’t see that we will have an equity gap in terms of this capacity which we have won. And of course, if we are able to win more capacities, let’s say very short period right now on this capacity, we don’t think we will need to raise equity because these commissionings are taking us to 2028. So and because of that, the cash flows and the securitization EPC margins from these three years will hold us in good stead in terms of funding these projects.
Subhadip Mitra
So we want to clarify, securitization means the top up refinance.
Nikhil Dhingra
Basically top up. Like we have mentioned in our presentation, we have raised 650 crores of securitization in this nine months which you can see that we have refinanced 5 on slide 6 5,500 crores of refinancing which have yielded 650 crore of top up. So you can say that whatever debt we have so around 13% of it we are able to get as the more debt. So that is what we mean by securitization. This is not sale of assets. Just to clarify.
Subhadip Mitra
Perfect. Perfect. This is amply clear. Thank you so much.
Operator
Thank you. The next question is from the line of Tejas Fulbadua, a big HNI Ito investor. Please go ahead.
Tejas Fulbaduwa
Hi. First of all congratulation on very good reasons and I believe the 1200 Mekanabod commissioning that you did this quarter that was a good achievement as well. I have three questions. Firstly I wanted to know do you have any exposure or any sale in us Given that the noise around, you know the tariff on green renewable energy by the new government in us I believe no, but just wanted to confirm.
Nikhil Dhingra
Right. So we. We don’t have any sales to us because we are a utility. And in terms of the sale, all of our sale is in 25 year PPA to the utilities in India. So all of our revenues is in rupees.
Manoj Kumar Upadhyay
I think. Let me also clarify a little bit that this is this there is a noise of this IRA review by the new administration in us. In fact if you ask that first of all we are not affected. We are not a module manufacturer or exporter. We are actually the power producer. And the power producer produce the power and sell it to India with under 25 years uptake what it has given.
Actually if there is a delay, if there is embargo in US I think there are 2, 3 advantage what IPP will be able to get. One is that people were selling module at higher price in us. If there is embargo I think those module will be available cheaper to IPP even in India or other part of the world. So that’s one advantage I see.
Second advantage I see that some of the ESG fund which were really focusing on us now if there is a slowness in US deployment maybe they will come and do some project here. So from my side, from IPP side I think I see that first there is no effect. If there is effect which will be the positive in terms of the cost and capital resource availability.
Tejas Fulbaduwa
Great. Second question I wanted to understand is you give an indication that you will see an annual EBITDA of 1750 to 1800 crores of the from the 2.5 gigawatt that’s online. And in one of the questions you responded that you expect around 350 megawatts going online in Q4 this year or maybe April 25th. So should I expect maybe around 10, 15% additional revenue from that? Like 200 crores or higher revenue from that annually next year?
Nikhil Dhingra
Yes, it is more than that. Yeah, you can expect that because like we said it will. It’s a three. I can tell you more about those projects. So the 350 megawatt project, 50 megawatt is at a tariff of 2.97. It’s a wind project. Wind projects typically have a CUF higher than 30%. So you can do the math in terms of the revenue and in terms of the merchant tariff. In the past quarter or so, we have sold power in the range of 2.723 rupees sometimes. So that’s the tariff you can assume on average basis more than 3 rupees we have for the merchant plant of 300 megawatt. Of course, like I said, we have got a PPA of 3.05 for that. So if the PPA gets signed before June. So the 3.05 is the revenue on the 300 megawatt megawatt and otherwise closer to 3 only. So this will definitely be more than 10%.
Manoj Kumar Upadhyay
Yeah, and this will be also operating at 30% because these plants are designed with 150% of overloading.
Tejas Fulbaduwa
Okay. And lastly, you know, 1200 megawatts went online this quarter and even the debt that you paid this quarter from the IPO proceed, that would have resulted in some interest reduction. Yeah. So, but that was not a full quarter impact. But I can see the EBITDA is around 89% and PAT is around 28%. Just Q3, 25. So can we say going forward that similar level of EBITDA and PAT will be achieved or even higher given the full quarter impact or is there any one off that happened in this quarter?
Nikhil Dhingra
Yeah, so see, this is the, this quarter is basically what represents the steady state in terms of, as you rightly said, the assets got commissioned in the phased manner. So in terms of the revenue, they have not added to the full capacity in the, in the quarter. So but in terms of the percentage margins, we will be here plus or minus 2%. Right. In terms of the EBITDA margins and the PAT margins. And of course, like you rightly said, again, the debt repayments also happen towards the FAG end of the quarter only because we raised money around November. So till the time we could pay notices and everything, we for December. So yeah, so the full impact of this debt repayments. And of course, the plant generation will come from this quarter. But in terms of the percentage margins, I think we’ll be here plus or minus 2%.
Ankit Verma
And just to add, look, EBITDA margin will be sort of fairly consistent. And of course, like we said, we will have a lot of operating leverage here given that this capacity is commissioned and manpower be fixed. But on the pat level it is dependent on number one on interest and number two the tax as well. Right. Because in consort financial you have the tax from the EPC business as well. Right. So in case in some of the quarters and we will be making higher EPC profit. So here your EPC profit gets knocked off in the console financial. But whatever tax we will be paying on the EPC on the EPC side of the business that will get reflected on the pad. And in that case while notionally it will look on the lower side if at all there is higher tax payable on the standalone business. So EBITDA will be fairly consistent.
Nikhil Dhingra
And in terms of the EPC profits I think we will try and it will be in the range of 5%. So materially should not impact much because the EPC profits will not be basically in that range. So materially this should not alter the the console profit also. So that’s where I think plus minus 2% you can look at.
Tejas Fulbaduwa
Great. Thanks a lot for all the clarification. We’ll pass on to next Monday.
Operator
Thank you. The next question is from the line of Gopal from SBI Life insurance. Please go ahead.
Gopal Nawandhar
Yeah. Hi sir. Congratulations on good set of number. Thank you for the opportunity. Sir. In this quarter we commissioned this 1,200 megawatt. What is the contribution in terms of revenue and EBITDA for this quarter from these projects?
Nikhil Dhingra
So this project contributed 80 crore of revenue in this quarter. And in terms of ebitda it is 90% the same EBITDA you can take from that project. So yeah.
Gopal Nawandhar
And is it like the full potential of…
Nikhil Dhingra
No, no, no, no, no. It is not the full potential. It is of course this project can do an annual bid of around 700 plus crore, 720 odd crores if you take 30% CUF. So it can do at its best around 180 crores in the. But it is seasonal. Right.
Manoj Kumar Upadhyay
So it will vary from 200 crore to 170 crore.
Nikhil Dhingra
Yeah, yeah. So in the range you can say on an average basis it can do 180 crores adjusted for seasons. In some quarter it may do higher, in some quarter it may do lower but on an annual. So you can take the quarterly split from there.
Gopal Nawandhar
Okay, sure, sir. And second was on CapEx. What is the capex we have done till date and what is the target for full year and next year?
Nikhil Dhingra
Yeah, so capex is very substantial gross block. So basically this quarter our gross block got strengthened because the CWP because of the commissioning. The CVIP got commission.
Gopal Nawandhar
Spend of money, not the commissioning.
Nikhil Dhingra
Yes. Yes.
Ankit Verma
Nine months we have done roughly 3,500 crore of capex for this particular year.
Gopal Nawandhar
Okay. And what is the target for this year?
Nikhil Dhingra
So this year like we said this 350 we need to commission. So Arun, any idea on what’s the capex left? I think thousand… Around 800 crores of. I think less than that. It should be less than that. Around 800 crores of capex we will be doing in next six months. You can say next two quarters. Yeah.
Gopal Nawandhar
And financial year 26, what is the capex target?
Nikhil Dhingra
So we have not yet frozen that because we keep on doing the land and the long lead ordering. We will try and incorporate that in our next quarterly presentation. In terms of the capex target for FY26, what we are doing currently is we are ordering the long lead items for those projects. So we will be able to update you on the next quarterly call or maybe if we can earlier than that.
Gopal Nawandhar
Sure. And what was the gross block for this 1200 megawatt?
Nikhil Dhingra
It is 4600 crores. If you, if you look at the. I think the actual capex so 4600 crores.
Gopal Nawandhar
Okay.
Manoj Kumar Upadhyay
I think this is one of the best project that we have commissioned per capita per megawatt basis.
Gopal Nawandhar
And sir, on this ALCM and all will it have any impact on our CAPEX number? The capacities which we already have PPA or loas will that have any impact on or it is a pass through for us?
Nikhil Dhingra
It is no impact because the government is basically if you read the ALCM circular it is applicable only for the projects where the bids happen post that circular. So actually those bids are yet to happen. They will start happening now as we speak. So none of our projects is impacted by those orders. Whatever we have currently now that we don’t have any impact, there’s no part two also because we will not be even required to follow that order for these projects.
Gopal Nawandhar
Okay. And in your opinion with the current sell prices in India what should be the increase in the tariff for pure solar?
Nikhil Dhingra
So that’s something which we need to see because it’s a very dynamic market in terms of. Because ultimately you are dependent on China for, for the, for the value chain. So we will not be able to comment on that but it will result in some, I think definitely a tangible increase.
But like I said in the FDRE the percentage will be lower as compared to pure solar tender because the solar capex is just a part of the FDRE and it has wind and battery also. So but it will be an impact. But of course the market will decide that impact because how much of the industry absorbs that and how much it pass it on is a function of the market dynamics.
So we cannot in terms of the tariffs we cannot say. But in terms of the capex sell prices, I can give you some idea that. Yeah, so let’s say without the LCM, typically cell constitutes currently around 25% of the overall module price. If you look at the cell so you can do your sensitivities, I don’t know the amount of the increase the cell prices will have in India because that’s something markets still have to clear because the lot of capacities are coming up in India. So but typically the sensitivity is like in terms of module cost itself is around 50% of the project cost and out of that 25% around 12 and a half percent of the overall project cost is cell. So whatever increase is there, that will be the sensitivity you can do.
Gopal Nawandhar
Okay, got it. Thanks a lot sir.
Nikhil Dhingra
Thank you.
Operator
Thank you. The next question is from the line of Abena from ICICI securities. Please go ahead.
Abhinav
Hi sir, thanks for the opportunity. My question is when are you getting the debt tied up for the new under construction portfolio? And of this 4.4 gigawatt under construction capacity for how much have we achieved the financial closure? And also I mean post refinancing, what is the rate of interest and what was the earlier rate? Thanks.
Nikhil Dhingra
Sure, sure. So, so thank you. We have covered. You can Refer to slide 6, I’ll answer that question but you can also refer to slide our presentation. We have sanctioned for 1700 megawatt of under construction projects out of 4400 megawatt of total under construction project. So this is essentially 40% of our under construction projects. We have debt sanctioned which is amounting to around 16,500 crores.
And in terms of the signed PPA this is essentially around 90, 80, 90% because like I said our signed PPAs are around 2,300 megawatts. So out of the 2300 megawatt, 1700 megawatt of projects have sanctioned debt. So in terms of signed PPI it is a number of around 80% but in terms of the projects one, it is around 40%.
In terms of the rate for the refinancing, as we said, we have refinanced substantially large portion of our we have taken the sanction. The actual debt disbursements are going to happen in phases. So in terms of the debt sanction we have refinanced more than 50 55% of the current debt and the rates are in the average range of 8.8 which we have mentioned in the Slide 6 as well.
Abhinav
Okay.
Ankit Verma
And this will result in a reduction of roughly 70 bps for the projects which are refinanced.
Nikhil Dhingra
On an average basis.
Ankit Verma
On an average basis.
Abhinav
Okay. Thanks.
Operator
Thank you. The next question is from the line of Akash Mehta from Canada, HSBC Life. Please go ahead.
Akash Mehta
Sir, congratulations on good set of numbers. So my first question is. So you mentioned in terms of the grid connectivity that Grid connectivity, founder construction capacities in place. So in terms of land, so how would you kind of look at it? I mean, what. I mean land also we have most of the land in place for forward capacities we have.
Nikhil Dhingra
Right, right. So land of course we focus on depending on the. We of course keep on acquiring land for each of the projects. But in terms of our prioritization for the signed PPA ones, we prioritize them in P1. So. So we have basically to give you update on the solar side and wind side both. So we have close to around 5,000 odd acres land for the under construction projects and for the wind location, around 104 locations. We have the land for these projects.
Manoj Kumar Upadhyay
So that is equivalent to 500 megawatt of wind.
Nikhil Dhingra
Yeah.
Manoj Kumar Upadhyay
400 to 500 megawatt.
Nikhil Dhingra
And this number is very dynamic. It keeps on updating every quarter. We have chosen not to update it because it’s very, very dynamic. And in terms of the timelines we are acquiring land even for projects which are far ahead sometimes. And of course our aim is like we said, in terms of the prioritization, our aim is that for the PPA signed projects, the land should be in place ideally within six months of the PPA signing completely done. And in worst case around nine to 12 months.
Akash Mehta
Okay, I think that’s helpful. And second is, I just wanted to clarify on this merchant capacity. So that will be 300 megawatt and that’s 350 megawatt you mentioned that would be separate. Right, that’s solar. So two, two projects are separate or…
Nikhil Dhingra
The merchant capacity is only 300 megawatts. We don’t have any more merchant capacity. And that merchant capacity also our intent is not to have merchant for 25 years. It will be merchant till the time we find a good resting place for it in terms of a PP. So and we have found that with the SECI tender of 3.05, which we have won, so that that is the only merchant we have in the portfolio.
Akash Mehta
So how are you looking at tariffs? Merchant tariffs, I mean, I mean moving on like from last maybe quarter or so. I mean are they, I mean improving or. I mean there is, I mean still there’s more supply, I mean in the market.
Manoj Kumar Upadhyay
I think quarterly, if you see that quarter by quarter it has improved. But our fundamental is that we don’t want to have a merchant actually three, four, five months. That’s what our plan is to run it and after that find a PPA which Nikhil was explaining. And we have already found a PPA where we will fix, we will transfer this project right at C2P 5% pesa tariff for 25 years.
Nikhil Dhingra
So for us merchants is like a strategic thing to get our projects commissioned earlier. Basically how we do looking at this is that we can commission them as merchant project. And of course the bids allow you to use the operational project as one of the projects when you bid. So your revenue can come essentially very early if you have an operational project in that ppa. So that’s the strategy we are using. Until that time merchants are profitable because whatever the tariff is, it is definitely more than the 25 year tariff at this point of time. Right. So it is profitable to run it at merchant. But definitely we don’t intend to run it on much in for long term basis because we are not in that business of taking calls on tariffs as far as our utility business is concerned. So we will try and implement this accordingly.
Akash Mehta
Understood. Yeah. That’s it for my. Thank you.
Operator
Thank you. The next question is from the line of Nikhil Abiyankar from UTI Mutual funds. Please go ahead.
Nikhil Abhyankar
Just a clarity initially. So this gross block addition of 4,600 crores is net of EPC margin that we knock off.
Nikhil Dhingra
Yes. Yes. Yeah. Yes, yes.
Nikhil Abhyankar
Okay. And now coming to the, coming to the slide, the connectivity slide. There are three projects where we have applied for connectivity and not yet granted. So do you believe that this might be a challenge for execution going forward?
Nikhil Dhingra
So this connectivity applied is basically which projects are you referring to actually?
Nikhil Abhyankar
At my Venus.
Nikhil Dhingra
Yeah. So typically this connectivity is in principle grant is there. Yeah. Right. So till the time we have the final grant we don’t say that we have secured the connectivity. But in terms of the in principle connectivity, this is definitely assured. There is no risk in terms of this not getting allotted to us because as soon how the procedure works is within a month of your application the connectivity is given to you on an intrinsic basis. But as you get the final agreement signed, this connectivity gets conformed into the binding agreement. But there is no instance of this in principle not going to the final connectivity.
Nikhil Abhyankar
Okay. And so we have refinanced our operational projects at 8.8%. Is there any scope of further reduction in these rates? Because there are some players who are doing it at lower level as well.
Nikhil Dhingra
Yeah, yeah. So even we have mentioned to you the average rate. Even we are able to get rates of 8.6, 8.5 also for some of our projects. See sometimes what happens is it is a trade off between taking securitization proceeds and the rate because the — you have to take a call in terms of the definitely lower rates are possible. Just to answer your question, definitely lower rates are possible because the rating of these projects already we have managed to get double A minus for our refinancing. So the rating upgrade is a company specific upside which will help us in getting lower rates because we’ve just done the ipo, we just paid the debt on the corporate level, basically on the consolidated level. So we will basically get the upside of that in the upcoming quarters. And of course the rates from a company specific reason, 1 is the rating upgrade because of the overall equity raise.
And secondly because of the rating upgrade because of these, the counterparty is AAA for us in all of our PPAs which we are executing. So as we said on the operational side also around 70% is AAA. So that is the upside possible. On the company specific reasons, of course that’s again a macro call whether the rates will be cut or not. Because what we are trying to do is borrow more on the variable rates and which will help us come down to the as the MCLR comes down. So that’s a macro call which we can’t. I think you guys know better on that. But on the company specific reasons there is definitely room to improve on these rates and some of these loans we are taking have a rating related rate reduction. Also let’s say in some projects we got a single A rating but if we manage to go to AA, the rate will fall by let’s say 25 to 30 basis points. So. So because the rating upgrades, the rates can come down depending on each specific project.
Nikhil Abhyankar
And now harping back on our equity requirement over the next three, four years, the back of the paper cancellation shows our capex of around 45,000 crores in next three years to complete the entire 4.6 gigawatt of pipeline. This will entail, I mean equity requirement of almost 7 and a half to 8000 crores. So how do we exactly plan on achieving that?
Nikhil Dhingra
Right, right, right, right. So it is I think three sources of equity for us like we said. So we have raised 2400 crores of IPO money. Right. So that is substantial part. That is the most significant part of that seven and a half thousand crores requirement. Then of course securitization proceeds are the second most important part of that component out of which we have already managed to raise around 650 odd crores like we mentioned in these nine months. So and of course the SECI project we just updated, you will add at least thousand odd crores in terms of the securitization proceeds. So you can see securitization will add around 2,500 odd crores on top of the 2400 crores we have from the IPO.
And the third source of this thing is the construction margins. Like we guided you on the 5% to 7% EPC margins on whatever we construct on this 45,000 crores. So you can ESC approvals of around 2,000 to 2,500 crores. So these are the three sources. On top of that, there is free cash flow from the running projects. So that will also give us buffer to have more cash flows than required.
Nikhil Abhyankar
Sure. Thank you. And all the very best.
Nikhil Dhingra
Thank you.
Operator
Thank you. The next question is from the line of JNM Jain from ICICI Securities. Please go ahead sir.
Jainam Jain
So when do we expect the conclusion of PPA signing for 190 megawatt plus 150 megawatt FDA projects?
Nikhil Dhingra
Yeah, so that’s the question. We also keep following on with Seki. So ultimately the BPA signing is done by Seki. So what we understand is that they are in discussion with a few state governments principally some of some of the states which they have already signed up with. So like Seki has signed up with Chhattisgarh for 190 megawatts. So that is the one party which they are talking to for the rest of the capacity. And of course they are talking to other states like Uttar Pradesh and Madhya Pradesh for this. But that is up to them.
So we don’t have a day by day status for the signing. But what we understand is they should be signed soon because the half of the capacity is already signed. So some of the state utilities are already fine with this tariff and fine with the PPA construct. So they are more likely to be signed in a month or so. That is what we will hope. But it could take two months also.
Jainam Jain
Okay sir. And so is there any issue I’ve learned in the one in the last three months which is not included in the presentation?
Nikhil Dhingra
I think we won 250 megawatts in the last three months.
Arun Chopra
Yeah, but it’s included what was there.
Nikhil Dhingra
It is included in the presentation.
Jainam Jain
All right. Okay. And so do you start the work or commit capital before the order is reserved by the CERC or signing of ppa?
Nikhil Dhingra
We take the connectivity because the connectivity is applied on the basis of the letter of award. So connectivity we take. There is no cost attached to it other than the very small bank guarantees you need to give. Then we start acquiring land because land is something you can use for any project. Right? So land is a useful resource and it is an appreciating resource. So we start buying land at the place where we take connectivity. But that is less than 1% of the CapEx. But of course, and this capex is reusable. This is not something which is sunk if there is any issue on that option and all things. So we don’t do capex which is non recoverable before the tariff is adopted.
Jainam Jain
Okay. So and the 1000 megawatt capacity which we commissioned in October 24 was that project Commission with the techno tracker technology?
Nikhil Dhingra
No, actually, no. Because what we have realized is the tracker makes sense more in the FDR tenders where you get the premium for time of day because you need to give peak power. You need to basically have power at all times of the day and you are incentivized to with the peak power tariffs. So trackers we plan to use mostly on the FDRE tenders. We don’t have them in the. In the. In the plain solar projects. What we do have is like we mentioned a DC to AC ratio of around 40, 50%. So that is something we do. So that compensates for not having trackers more than adequately.
Jainam Jain
All right sir, that answers my question. Thank you and all the best.
Nikhil Dhingra
Thanks.
Operator
Thank you. Ladies and gentlemen. That brings us to the end of the question and answer session. I would now like to hand the conference over to the management for the closing comments.
Manoj Kumar Upadhyay
So my name is Manoj Badhya. I would like to thank you all for patiently hearing and asking the right questions. This quarter has been a very very important thing for us. Because this 1200 megawatt one of the biggest project we were making and it was important for us to achieve it. We also wanted to show the performance improvement especially in the PAC side as well as on our UF side. I think our team has done exceptionally well on that. We also able to create a pipeline not up to 26 but beyond 26 also. And our focus will remain there that any future pipeline. Now whatever we create, we create towards 28 to 30 timeline. So we achieve a 10 GWh hour target.
We are still building more resources on the team side. So very senior person who joined us as a president of our execution on projects. He came from the very well established ABB background where he was MD of the ABB Education India. And that company became a linkson.
On the quality side also we are improving because we will do so many projects and we have added many many project directors so they ensure that are in cost and quality. We are managing that. And Acme is known for its innovation and this thing. So we want to also do that put the new technology in test. And I think in this quarter or next three, four months we will set up one small FDRE project. Because I have seen in many interaction that people had something to some concern on fdre. Although for S FDRE is not this thing. Because we have been forecasting our power under division settlement mechanism for last four, five years. So technically it is the same deviation settlement mechanism and forecasting with the battery inside which will improve it further.
On the IRA side which I mentioned it, this was the concern at various level raised to me. And I believe that something has something will help on this because there will be enough capacity available at lower cost in India. Especially on the supply chain side.
Third thing we expect that next quarter if the government thinks on the or the RBI thinks on the interest reduction. We are hopeful and from our side I think what we can do is we are focused to improve our credit rating. Our team, my team is working on that. So we expect that credit rating improvement because after IPO we expect that to happen. So that’s again one area we will work on that.
I want to tell you that on the behalf of entire team as a company we are very focused on the cost, operational cost, operation excellence, timely execution of the project. That is what is known for known about technique. We will keep on experimenting new technology which will give us edge to not only reduce the cost in current project but also to work and win in the future project.
Thank you very much for again patiently hearing our information and I look forward for your continued cooperation. Thank you.
Operator
Thank you sir. Ladies and gentlemen, on behalf of ICICI Securities Limited that concludes this conference. You may now disconnect your lines. Thank you.