Gujarat Industries Power Company Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from Gujarat Industries Power Company Limited (GIPCL) Q4 FY22 Earnings Concall

Q&A Highlights:

• Dhruvesh Sanghvi of Prospero Tree asked about the status of the Khavda solar power project. K K Bhatt CFO answered that the new project is doing well and added that that project is not a 1 year project but has a 5 years project timeline. So right now everything is going as per time line.

• Nilesh Doshi from Prospero Tree enquired how long the lignite power plant will be operational. K K Bhatt CFO answered that GIPCL is having 20 plus 10 years lignite reserve available. So for the lifetime of the lignite station, the company does not have any issue.

• Nilesh Doshi with Prospero Tree also asked about the operational time frame of the lignite plant. K K Bhatt CFO answered that with the 5-10 years another life enhancement the company is thinking of, it will also be possible to have the time frame above the 20-25 years life, with the available reserve in the region.

• Nilesh Doshi of Prospero Tree queried about the status of the 75 mw additional solar plant. K K Bhatt CFO clarified that it was the tender for GUVNL 500 mw bidding. Now GIPCL is thinking of this 75 mw expansion with some other modality where GIPCL can give it to some other companies. That plan is in process. Within few weeks it will be finalized.

• Nilesh Doshi with Prospero Tree asked about the gas based plants, if those are permanently closed or if it will recommence. K K Bhatt CFO replied that gas based station are totally debt free. GIPCL is now preserving it for future requirements. GIPCL feels that 1-2 years down the line, it will be able to run these stations.

• Nilesh Doshi from Prospero Tree also asked about FY23 capex expectation.  K K Bhatt CFO said that FY23 capex at Khavda would be around INR300 crore for solar park development, plus the 75 mw that GIPCL is thinking of, it would be around INR400-450 crores.

• Vaibhav Badjatya with HNI Investment enquired that of the INR406 crore of EBITDA done in FY22, how much was the loss from gas plant and profit from lignite, solar and wind.  K K Bhatt CFO replied that EBITDA from thermal was around INR200-215 crore and from wind and solar, around INR200-220 crore.

• Vaibhav Badjatya with HNI Investment asked that in solar plant which plant is still PBT negative for GIPCL. K K Bhatt CFO answered that none of the solar station is under negative mode, all are in positive state.

• Abhijeet Dey with Equentis PMS enquired about lignite power plant, if in FY22 GIPCL had to buy lignite from outside or was depended on itself. K K Bhatt CFO answered that in FY21-22, it was supplied by GIPCL’s own mines. The availability is affected by lot of geographical factors that impacts production in mines. In some years, it’s possible to buy from outside. In normal scenario, own mines will be sufficient.

• Vipul Shah from Sumangal Investments asked how the company is going to fund the INR600 crores of capex for next year. K K Bhatt CFO said the Khavda project capex for solar park is going to be funded through own internal accrual and also debt. GIPCL is also having 30% of the cost as MNRE subsidy for park development.

• Vaibhav Badjatya with HNI Investment queried that for FY24, based on the current capacities, what PBT GIPCL can do if all plants are operating normally. K K Bhatt CFO answered that in a normal scenario, since station 1 is not in operation, GIPCL would be hovering around INR250-300 crore.