JSW Energy Ltd (JSWENERGY) Q1 FY23 Earnings Concall Transcript

JSW Energy Ltd (NSE: JSWENERGY) Q1 FY23 Earnings Concall dated Jul. 21, 2022

Corporate Participants:

Ashwin Bajaj — Head, Investor Relations

Prashant Jain — Joint Managing Director and Chief Executive Officer

Pritesh Vinay — Director (Finance)

Analysts:

Rahul Modi — ICICI Securities — Analyst

Mohit Kumar — DAM Capital — Analyst

Swati Jhunjhunwala — VT Capital — Analyst

Nikhil Abhyankar — DAM Capital — Analyst

Apoorva Bahadur — Investec — Analyst

Lavina — Jefferies — Analyst

Atul Tiwari — Citi Group — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to JSW Energy Q1 FY 2023 Post Results Conference Call hosted by ICICI Securities Limited. [Operator Instructions]

I now hand the conference over to Mr. Rahul Modi from ICICI Securities. Thank you, and over to you, sir.

Rahul Modi — ICICI Securities — Analyst

Thank you. On behalf of ICICI Securities, I welcome you all to the Q1 FY 2023 earnings call of JSW Energy. From the management, we have Mr. Prashant Jain, Joint Managing Director and CEO, Mr. Pritesh Vinay, Director of Finance; and Mr. Ashwin Bajaj, Group Head, Investor Relations. We will start the call with a brief opening remarks followed by Q&A. I would now hand over the call to Ashwin. Thank you, and over to you, sir. All the best.

Ashwin Bajaj — Head, Investor Relations

Thank you very much, Rahul. Good evening, everyone. This is Ashwin Bajaj, and welcome to the JSW Energy Q1 call. With that, let me hand it over to Mr. Jain for an overview, and then we’ll take your questions. Mr. Jain?

Prashant Jain — Joint Managing Director and Chief Executive Officer

Thank you, Ashwin. Good evening, ladies and gentlemen. This quarter has been very interesting quarter for the industry as well as JSW Energy. For the quarter one, the power demand has seen a growth of 18.6% year-on-year, and in July till date, the power demand is growing at 2% in spite of very heavy monsoon and rain shower, what we have seen across the country. During the quarter, there was a 4.3 gigawatt of the capacity addition, taking the total capacity to 403 gigawatt. Now the total renewable capacity in the country is 161 gigawatt, which amount to 40% of the total capacity of the country. This capacity addition was mainly from renewables, which was through solar. During the quarter, merchant tariffs saw a increase of 143% year-on-year at INR7.8 per kilowatt hour. The volume though went down by 21%. The average monthly volume was 3,790 million units. The interesting statistics, what we have observed, during the quarter, the average thermal PLF for India as a whole was 69.43% as compared to 58.79% in the last year, and this PLF in the year FY 2021 was 46.61%.This is what is telling us that how the — when the power demand is growing in the country, the thermal PLF, which is the stranded capacity, is getting more and more utilized and giving the growth opportunity of existing untied capacities. The relevant PLF for — as a country as a whole was at 21.43% as compared to 20.64% last year, which was primarily driven by the higher wind PLF, which is, again, a cyclical trend, which we are seeing.

The solar PLF for the quarter, as a country as a whole, was 19.73% as compared to 20.1% of year before. And wind PLF for the quarter was 25.82%, as compared to 23.84% last year. As a company, we saw a very robust performance, our total generation was up by 14%, which was driven by higher thermal generation by 12%, which was primarily on account of higher merchant sales. We sold six times more volume in the merchant market as compared with the last year at 866 million units, which accounts to approximately 8% of the total power exchange volume in the country for the quarter. This is what reflects that how this current power demand growth is giving JSW Energy ample opportunity to use its untied capacity. The hydro generation was up by 13%. And in addition to that, we also since commissioned our solar power plant, 225-megawatt at Vijayanagar, which is also performing very good. During the June month, we saw the P60 level performance, which is 110% of P90 generation, we generated close to 94 million units during the quarter. The total generation was 5,850 million units. Also, we have been given to understand that, on the request of the Government of Rajasthan, Ministry of Coal has given an approval of rectifying the defect of the mining lease of Jalipa and Kapurdi, and we are yet to receive the formal communication from Government of Rajasthan as they are processing it. But that defect has been rectified, and the business has become as usual for the company. In terms of the financial performance of the company, we saw the strong EBITDA growth of 34% year-on-year, which was primarily on account of three things.

One is higher merchant sales and volumes. Second is solar plant at Vijayanagar. Third is the operating of the Karcham plant and operational performance improvement in terms of lower heat rates, lower O&M costs. We have continued and maintained the track record of maintaining the lowest possible and industry-leading receivables. We saw lower ever receivable days of 45 days during the quarter. And the quality of receivables are also such that only 4% of the overdue. And as we are speaking, I’m happy to announce that we had zero overdue. And we have been able to maintain the heavy healthy cash flows of the company and on cash return basis. During the quarter, we have seen close to 21% of the return. As regards to our projects, all the projects are growing and continuing the growth as per the stipulated time lines. Our SECI-X project, we are expecting to start commissioning from the current quarter, the scheduled [Technical Issues] the SECI-IX project is also moving as per the schedule, and then we are also expecting they are also commissioning much earlier than the planned time lines. The Kutehr power plant is also running ahead of the schedule, and we are going to commission the project also ahead of its timeline. During the quarter, we also added a portfolio of 2.5 gigawatts with Government of Telangana and Government of Chhattisgarh for setting up the hydro pumped storage. With this, we have a portfolio of 40,000 megawatt-hour of the storage capacity.

We are in process of making the DPR, couple of projects, we have already completed the DPR and applied for the approval with CA and also, we have already started applying for the environment clearance and land acquisition process. We believe that we will be starting these projects in a couple of quarters. And we see this as a great opportunity in time to come. We also got SECI-XII wind projects, 300 megawatts for which we have already received letter of intent. In addition to that, our commitment for decarbonization and growth in terms of the renewable energy. What we have is stipulated total capacity of 10 gigawatts by FY ’25 and 20 gigawatts by FY ’30 is moving ahead of schedule, and I’m quite confident that we will be achieving all these targets ahead of its set deadlines. Also, with respect to our plans for green hydrogen and green ammonia and chemical derivatives are moving as per the plans. And there is a substantial progress is taking place in terms of tying up various building blocks and I’m quite confident that we will be the company, who will be starting the large-scale construction in the industry, and maybe we will be the first company to start the construction as compared to the peer group. As and when, we take that project with the Board, we will be coming back to you.

With this, I end my opening remarks, and I’m happy to take the question and answer. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] First question is from the line of Mohit Kumar from DAM Capital. Please go ahead.

Mohit Kumar — DAM Capital — Analyst

Good evening, sir and congratulations on a very, very good set of numbers. My first question is, how much equity and debt have been deployed in renewable assets at end of June 2022?

Prashant Jain — Joint Managing Director and Chief Executive Officer

Mohit, how much of equity and debt has been deployed for renewable projects?

Mohit Kumar — DAM Capital — Analyst

Yes, yes.

Prashant Jain — Joint Managing Director and Chief Executive Officer

Is that your question?

Mohit Kumar — DAM Capital — Analyst

Yes, that’s the question.

Prashant Jain — Joint Managing Director and Chief Executive Officer

So, Mohit, we will not be able to give that breakup. So you will have to wait till the September quarter in the balance sheet and the cash flows are out, but I’ll just give you a broad sense so that you have a handle of that. For the Kutehr project, we have just started the loan drawdowns only in the April to June quarter. So, whatever money has been spent so far was largely equity funded. So, I think we would have drawn about INR150 crores of debt for the Kutehr project. For the other renewable projects, the only drawdown that we have done is to the extent of the capex LCs that have been opened for the equipment revenue order. There’ll be no fund-based facility that has been drawn at. So, just to give you, again, I mean, this is an incomplete picture, because you would also want to know the full picture. So let me anticipate a question you have not asked yet. The total amount that has been spent so far, INR3,830 crores cumulatively. And the total commitment that has been done is INR10,600 crores. So, that is where we are as far as the total project and expand.

Mohit Kumar — DAM Capital — Analyst

Understood. And my second question is that a lot of your — you have signed a lot of MOU for the pumped hydro storage and you are being dissipative work. Is it a fair understanding that the development will start post we have some kind of PPAs for these projects?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So, Mohit these are not the MOUs. These are the — actually the allocation letters, which we are getting, because these are the self identified projects wherein we are entering into an agreement to build a particular project at a specific location. Wherein we do the complete development of the project and we get the water allocation done and take the necessary approvals as you are building any other plant. Now, we believe that there are a number of opportunities in front of us to develop, to build the renewable power and make it round the clock. Now that opportunity could be to supply our own group requirement for captive purpose. That is also for production of the hydrogen and ammonia and other chemical derivatives that opportunity could also be in terms of any competitive bid, which is announced by any DISCOM or city that party. So, it is development of those kind of projects, which we are taking up. And as and when we start working on spending the money for a real commitment, we will be announcing it to the — going to the board and then taking a necessary approval and then would necessary tie-up will be done before the financial closure or the financial commitment is done. So, it is not necessary. It is a — it is for the particular discount. It can be for any of the opportunities, which I had spelt out, which I have label on the table.

Mohit Kumar — DAM Capital — Analyst

Sir, lastly on the P&L, you have reversed the $1.2 billion of the losses on the loan, may I know for which particular account this has been reversed?

Prashant Jain — Joint Managing Director and Chief Executive Officer

[Indecipherable]

Mohit Kumar — DAM Capital — Analyst

Understood, sir. Thank you, sir. Thank you and best of luck. Thank you.

Operator

Thank you. The next question is from the line of Rahul Modi from ICICI Securities. Please go ahead.

Rahul Modi — ICICI Securities — Analyst

Thank you, sir, for the opportunity and congratulations for super numbers. Sir, just wanted your view and outlook on the same, how do you see the bidding to take place overall in the next six to 12 months in the renewable space. That is one part. And secondly, do you see more capacities that you will add? Obviously, you’ll — there is one side where you bid for secy [Phonetic] kind of tenders and the other is the captive tender. So what is the opportunity that you’re looking at in terms of adding capacities renewable in your kitty over the next 12 months?

Prashant Jain — Joint Managing Director and Chief Executive Officer

We have already spelt out Rahul that we are — we will be making our capacity to 10 gigawatt by FY ’25 and then this kind of visibility, which we are having, we are quite confident we will be achieving it much earlier than that. So with our existing capacity and the projects under construction, we are in excess of seven gigawatt, which we are confident that we will be achieving that in the next 18 months time frame, this will be up and running. There are many more projects, which are on the — in the development stage, which we feel that in current financial year, we will be announcing and will be completing ahead of schedule as planned by FY ’25. In terms of competitive bidding, I cannot comment that what kind of a competitive bidding, which will be taking place but we are very much confident that as JSW Energy, we are only participating only on two standards and bids where we are confident to have a remunerative good quality returns for all of our projects, and we are going to maintain that part. In terms of the scope of the power and demand scenario, I have been very clearly advocating that there is more demand growth than actually the capacity addition, which is taking place. And that is what is reflecting now, which I explained in my opening remarks that the current PLFs are already shooting up. They are, as a country as a whole, you are seeing close to 70% capacity utilization at some point of time. Once that is also complete headroom is already absorbed, you are going to see the power shortage situation.

And then most of the competitive bids which have been taking place were unsustainable and because of which people are not able to do the — that project because of other headwinds in terms of the solar panel prices as well as the commodity prices. So I’m seeing the power shortage in time to come because of the demand and supply mismatch but I am quite confident that will be also overcome by the agility of the Indian entrepreneurship in the industry, which will ramp up to build more and more capacity in three, four years’ time frame. So all in all, it is going to offer a huge opportunity for all the IPPs to have a meaningful growth opportunity. And therefore, we are also preparing ourselves by locking in most of the resources and building execution capabilities. And this is what we have also demonstrated like our solar project was fastest in the industry in flat nine months’ timeframe. Our SECI-IX, SECI-X project, people have not even executed that PP and I’m talking about starting the commissioning in the current quarter as against the scheduled commercial operational timeline of July 2023 that demonstrates our execution capability and which is we are ramping up, and we feel that we will be having a meaningful share in time to come.

Rahul Modi — ICICI Securities — Analyst

Perfect. Sir, my next question is, sir, your comments and view on the fact that recently the reverse auction and in the wind auctions have been done away with — so how do you see the overall intensity in this space changing? And do you see something of this be introduced or removed the MSA in the solar also?

Prashant Jain — Joint Managing Director and Chief Executive Officer

Very tough to say and very tough to call for the behavioral signs of which you are actually asking. But what I am very clear that the story of building a book and then banking upon on certain trajectory of the availability of the equipment, which produce either wind power or solar power is — the time is over. And the ground reality has hit to the people with the reversal in the interest cycle as well as the increase in the commodity prices as well as the solar panel prices, which has hit the industry hard and that is where a disciplined approach comes into the play. So, industry should do that part. And then that is a self-restrained part. So, very tough to say that people will do it or not. Policy makers, what they have come up with the new proposal wherein the reverse bidding has been eliminated, but even there, it is a competitive bidding. But you will be only doing away with the emotions, what happens in the reverse bidding. But otherwise, that does not refrain people to even bid at lower prices than they are going to give that in the field and it is will be one-time bid.

Rahul Modi — ICICI Securities — Analyst

Sure, sir. And sir, this is very helpful. The last question from my side. Any development on the Bharat [Indecipherable]. Thank you.

Prashant Jain — Joint Managing Director and Chief Executive Officer

So that judgment is reserved. And — but I want to say that, that is also one of the projects which we had made the bid at 2019 and whatever we — the judgment will come, we will evaluate at the right point of time and then take it step-by-step.

Rahul Modi — ICICI Securities — Analyst

Thank you sir.

Operator

Thank you. The next question is from the line of Swati Jhunjhunwala from VT Capital. Please go ahead.

Swati Jhunjhunwala — VT Capital — Analyst

Congratulations on a good set of numbers sir. So, I had a little doubt on the job work part. So, can you quantify the amount of job work that you have done this quarter out of the INR3,000 crores topline?

Prashant Jain — Joint Managing Director and Chief Executive Officer

Pritesh?

Pritesh Vinay — Director (Finance)

No. So the — are you asking for what is the total quantum of job that we have done in the INR3,000 crores profit.

Swati Jhunjhunwala — VT Capital — Analyst

On the INR3000 crores revenue that we have, how much is associated with the job work that you’ve done?

Pritesh Vinay — Director (Finance)

Okay. And do you have any other questions?

Swati Jhunjhunwala — VT Capital — Analyst

Yes. So I wanted to ask after deducting the job works. So the INR1,770 crores of approx. raw material cost, so that will be our cost of goods sold for the remaining revenue. Is that correct? Not the INR3,000 crores.

Pritesh Vinay — Director (Finance)

Can you just repeat your question, please?

Swati Jhunjhunwala — VT Capital — Analyst

So the cost of raw material for us was INR1,770 crores for the quarter and the revenue was INR3,000 crores. If we remove the job work revenue, is that the correct raw material cost?

Prashant Jain — Joint Managing Director and Chief Executive Officer

No. So there’s a separate raw material costs also that will be available with you. You don’t have to try and make all those adjustments, right? If you look at the steady results format, you will see the fuel cost as well. See, the job work, as such, given the job work nature of things that the cost of fuel is being borne by the customer.

Swati Jhunjhunwala — VT Capital — Analyst

Correct.

Prashant Jain — Joint Managing Director and Chief Executive Officer

All that you were then actually billing is the charges for the job work, right? So that is not a very large number, because the main number, especially in an inflationary environment that we have seen there on a Y-o-Y basis, so the coal price indices have almost tripled, right, and not to mention the currency depreciation impact. So therefore, that will be a very small number. That is not — if you are talking about a INR3,000-plus crores top line, that number will be well below INR200 crores ballpark. So that’s not a large number, the job work amount.

Swati Jhunjhunwala — VT Capital — Analyst

Okay. And secondly, on the INR10,600 crores capex that you have committed for the renewable projects in pipeline, INR3,800 crore is already spent, is that correct? Is the INR3,800 crore part of the — and secondly, for the remaining INR6,800 crore, how much debt are we planning to take?

Prashant Jain — Joint Managing Director and Chief Executive Officer

No, you have to understand any project will be funded in a ballpark 75:25 debt equity ratio.

Swati Jhunjhunwala — VT Capital — Analyst

Okay.

Prashant Jain — Joint Managing Director and Chief Executive Officer

Yes. So you can do that math.

Swati Jhunjhunwala — VT Capital — Analyst

Okay. Okay. Thank you so much.

Operator

Thank you. The next question is from the line of Nikhil Abhyankar [Phonetic] from DAM Capital. Please go ahead. Nikhil Abhyankar your line is top mode. Please go ahead with your question.

Nikhil Abhyankar — DAM Capital — Analyst

Yes. Can you hear me now?

Operator

Yes.

Nikhil Abhyankar — DAM Capital — Analyst

Thank you. Thanks for opportunity. I just had one question. Last year, we had booked a revenue of INR25 crores through carbon credit. So I just wanted to know how much will it be this year? And — going forward, as our renewable capacity increases, what can be trend in that?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So it’s very difficult to predict how much will be the carbon credit revenue in any period in terms of looking ahead basis. I mean, just to give you a flare as you rightly said, last year, we had a certain amount of revenues. But if you look at this quarter, for example, the first quarter, there is no common credit sale, right? And if you understand what has been happening to that market, especially post the Russia-Ukraine conflict and the general economic environment. That market has been pretty subdued. So as well as there’s volatility in that pricing as well. So I don’t think it will be possible to give you a forward-looking number on that side, because it is not possible to predict that market and the behavior of that market. However, as the renewable energy capacity accretion happens. There will be avenues that we will try and tap into to see that how to get carbon credits. I’m sure you are aware that, that market has also evolved a lot from years ago from a CDM to now a voluntary market and etc. So our teams are closely working on that. And as and when there is something significant to report, we will be happy to share that. But given too many moving parts on that side, it will be very difficult to forecast something like that.

Nikhil Abhyankar — DAM Capital — Analyst

Just a couple of follow-ups on that, sir. I just wanted to, where do you sell our carbon credit and what is our inventory that we’re holding right now unsold?

Pritesh Vinay — Director (Finance)

This unsold inventory will be ballpark 20 million units, somewhere in that 15 million to 20 million units. You should take that safely. And because there is a process as you generate and then that verification happens and then the registry has to issue that, right? And once they issue it only, then you get access to it and then it is liquid and available to you for sale as and when you want to do that.

Nikhil Abhyankar — DAM Capital — Analyst

And sir, where do you sell it?

Pritesh Vinay — Director (Finance)

Whoever is willing to buy and give certainty of remunerative price with certainty of payment flow. So we don’t have any preferred that we will only sell to XYZ. The idea is value maximization at the same time.

Prashant Jain — Joint Managing Director and Chief Executive Officer

Primarily the European market and European bars.

Pritesh Vinay — Director (Finance)

Yes.

Nikhil Abhyankar — DAM Capital — Analyst

Okay. Thanks a lot. That’s all.

Operator

Thank you [Operator Instructions] The next question is from the line of Apoorva Bahadur from Investec. Please go ahead.

Apoorva Bahadur — Investec — Analyst

Hi, sir. Congratulations on strong result. And thank you for the opportunity. So I wanted to understand on our coal strategy, basically, we are seeing that still the international prices are quite elevated. And we are active in the merchant market. So how are we ensuring that or how are we offsetting the risk that we take when we book cargoes?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So we — whatever our PPAs are there, they are 100% pass-through, whether it is coal index or the foreign exchange. So in our normal PPA side of business is absolutely part for merchant, we always sell in a 15-minute block after covering our fuel price. So any time we are out of the money, we are not selling that. But in today’s market when the consider the monsoon and we are seeing that the peak prices are at INR12. So we are able to do that. As a group, we have been following the strategy to rationalize our coal procurement cost. And as of now, we are buying a lot of Russian coal, which is indexed on Indonesian index, Therefore, on a like-to-like basis, I can give you a little bit of color that as compared to API 4, which is ruling at $340 million to $380 million f.o.b. our coaling cost on the similar GCV which will be in the range of $160 to $170. So that’s more than 50% discount, and that’s how we are sourcing most of our coal.

Apoorva Bahadur — Investec — Analyst

That’s great, sir, very, very interesting. Sir, also, I think you have been highlighting this for quite some time, and there is an expectation of power shortage in the country and we have investigation now. Any chance of expanding the Rajasthan project, BLMCL, I think we have an opportunity there or entering into new thermal plants maybe after the green business is separated?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So we’ll talk about when the green business is separated. At this point of time, we are concentrating more on a reliable growth. And we are pretty much excited about that we are seeing a very strong trajectory. And there are a couple of interesting developments which are taking place and then we — that makes us more and more optimistic and which we will be happy to talk about in the current quarter or next quarter.

Apoorva Bahadur — Investec — Analyst

Sure sir. Sir, last question from my end, that’s on the capital cost from hydro projects. So now that we have prepared the API for quite a few projects — what — how do you see this spend emerging? How much would we be spending on a per megawatt basis?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So it’s project-to-project basis and it depends what kind of is storage capacity, what kind of evacuation and what kind of a turbine you are going to deploy. But I can tell you, on a ballpark number, we should understand that hydro pump storage equivalent capital cost is around $70 of the lithium-ion battery, $70 to $80. So it is so competitive that you are getting a storage capacity, what you are getting from a lithium-ion battery at $70 to $80, which is having a shelf life of seven to eight years because of the number of cycles it can do, there is some hydro project will have a shelf life for 100 years. So — so that’s what you can see at that this — at this point of time that’s what, make us so optimistic about this particular technology, and we are working. And we will be — we are quite confident that it will offer us a better return than a normal utility sector, but it is typically in a relevant project.

Apoorva Bahadur — Investec — Analyst

And sir, when can we expect first of our project to be commissioned?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So you will hear very soon. That’s why I said there’s a couple of developments are very interesting developments are happening in the company, and we are working on it multiple sites. And that’s why we want to tell you whether then we put all the blocks together and then you will see happening. Very soon, you will be probably in the current financial year, we will come back with something.

Apoorva Bahadur — Investec — Analyst

Great, sir. Thank you so much, all the best.

Operator

Thank you. The next question is from the line of Rahul Modi from ICICI Securities. Please go ahead.

Rahul Modi — ICICI Securities — Analyst

Sir, thank you for the opportunity once again. Sir, at the group level, sir, we are large procurers of coal overall. So sir, what is the view that you are getting in the near-term pricing, do you see it going up, down, sideways, if you can throw some light to understand? Because why I’m asking is that in India also, we’ve got this INR12 cap on the exchange. Do you see this going away anytime soon as well on both fronts?

Pritesh Vinay — Director (Finance)

Tough question you are asking. Both the questions are very tough for me. One thing, which I can say is that at the current gas prices, European power producers find it even remunerative to produce power from buying the coal at $350 FOB. So as soon as you see the prices of the gas going down in Europe, you will see the API4 index and Newcastle index going down. Until that happens, I am not finding any strong reason for moderation of the thermal coal prices in Europe. In terms of the power prices at INR12, I think it should be reviewed because given the fuel price where it is, capping the power prices is not a fair play because given the track record and the power prices were at INR2, there was no bottom cap, which was fixed. But, you know that power is a very social and public interest subject, and then this is always seen very differently than the economic logic and rationale in the country. So we need to really see that how does it happened. But I find it very difficult to comment whether it will be removed or not, but it should be removed.

Rahul Modi — ICICI Securities — Analyst

Sure, sir. Sir, now again, our receivable days have come off quite significantly, which is commendable. So do you see a structural or some kind of a change in the attitude of the DISCOMs towards GENCOs, or it is just that — it’s just like JSW’s very company-specific things, so some light on that?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So it is changing in a sense that the law is being settled at various forums. In the last 12 years, we have seen a sector brought into the difficulty the DISCOM health when it had deteriorated there was a larger amount of the disputes, which have happened and then, which has been settled by different adjudicating authorities in time-to-time. And because of which the more and more avenues of blocking and delaying the payments have been — are getting blocked. And so I feel that this thing will get streamlined for the industry as a whole. And like the late payment surcharge, the issue in our case was settled by Supreme Court. So most of the DISCOMs bill have now realized that they have no way they can avoid the late payment surcharge. So they are also paying late payments surcharge. And Andhra Pradesh dispute is also settled at the high court level. And now I believe in next 12 months time, it will be settled at Supreme Court level also once it is settled, then I think all the contracts will find it’s entity. And so the discount will start paying on time or otherwise, they will have to pay the late payment surcharge.

Pritesh Vinay — Director (Finance)

If I may add to what Prashant has mentioned while — I mean, Prashant has been talking about the general trend and what it looks like and how things have been evolving in the more here and now for the quarter, April to June, while our receivables have gone down. And as Prashant was saying that the quality of that receivables going down is also much better because the overdues have gone down drastically. But if you look at the property portal data for the same period at the end of June, the total outstanding from the DISCOMs to the GENCOs was up by 3% at INR1.3 lakh crores. I don’t think there has been a structural change already, but probably, we are getting there from a systemwide point of view.

Rahul Modi — ICICI Securities — Analyst

Sure. So this is very helpful. Just a couple of last questions from my side is one on the late payments surcharge, I believe the rules had been changed by the industrial part and there have been some of the GENCOs who have gone against that and appealed? So anything on that are we hearing.

Prashant Jain — Joint Managing Director and Chief Executive Officer

No, no, for the late payment surcharge, it is already settled by the Supreme Court. We had a case along with the Maharashtra DISCOM there, they were disputing the late payment surcharge effective rate also, but it has been settled at Supreme Court. Now I think that is not at all the case. Of course, it depends company to company, they want to cite that kind of second now, I think every DISCOM is going to honor that part.

Rahul Modi — ICICI Securities — Analyst

Sure. And sir, last question from my side is on the availability of modules. Sir, we’ve seen a bit of a tightness in the market, not from the EPC side, but now there is a BCD, which has been enforced. Sir, how do you see the supply chain within India evolving over the next 12 to 18 months for players like us? Thank you.

Prashant Jain — Joint Managing Director and Chief Executive Officer

So 12 to 18 months, I’m not quite optimistic in terms of the improvement of the supply chain. But yes, 36 months time, I see that there will be a good amount of supply chain, which will get created. And as the JSW Energy also we are now contemplating and looking at this. This is a great opportunity to delve into. And at some point of time, we will be also here — coming out to play a meaningful role to do certain vertical integration to meet this kind of requirement.

Rahul Modi — ICICI Securities — Analyst

Perfect, sir. Thank you and all the best.

Operator

Thank you. Ladies and gentlemen, we will take one last question from the line of Lavina [Phonetic] from Jefferies. Please go ahead.

Lavina — Jefferies — Analyst

Yes. Hi, sir. Congrats on a great set of numbers. Just wanted to understand your renewable energy capacity ramp-up plan. Are you seeing delays by any chance on the ground? And is it on [Indecipherable] on track for your longer term as well as your near-term target? Thanks.

Prashant Jain — Joint Managing Director and Chief Executive Officer

So we are not seeing delays. We are seeing accelerations Lavina. So as I said, that in [Indecipherable] my scheduled COD in July 2023, whereas I will start commissioning this current quarter itself. And we will complete the project much ahead of the schedule. And I want to give you another color is that once I start commissioning much earlier, actually, I reduced my IDC and other costs, project cost. And this is what we are doing in this kind of a project. And also, we are — because we have logged in lot of resources, and also because of our good cash flows, we are able to accelerate the growth going forward. So — that’s why I mentioned that while our target is 10 gigawatt by FY 2025, I’m quite optimistic to achieve it much earlier than FY 2025. So we — as a company, we are seeing acceleration, no days.

Lavina — Jefferies — Analyst

Understood. Thank you.

Prashant Jain — Joint Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Atul Tiwari from Citi Group. Please go ahead.

Atul Tiwari — Citi Group — Analyst

Yes. Thanks. Just one questions on this morning manufacturing announcements by various peers, you mentioned that we are also considering…

Operator

Sorry to interrupt you Mr. Tiwari. The audio is not clear from your line. Please use the handset mode.

Atul Tiwari — Citi Group — Analyst

Is it now.

Operator

Yes.

Atul Tiwari — Citi Group — Analyst

Yes. So sir, I was talking about this module manufacturing thing that we are also contemplating. If you look at some industry-wide data, it looks like the 30 gigawatt of manufacturing capacity has already been announced in earliest year. And while the market size today appears to be more like 10 gigawatt to 15 gigawatt. So do you see there is a risk of something similar to what happened with BTG capacity, you know, in 2009 to 2011 time frame. We had a lot of manufacturers started setting up the coal-based BTG capacity. And then ultimately, people have to take eye out on that. So do you think that something similar could happen with the solar manufacturing as well?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So anything is possible, Atul, but the point what I’m saying is that module manufacturing has nothing. It’s a simple assembly line, and that’s where we are not that keen. The other — the important thing, which is there is the polysilicon which is the part of the model. And that is there and which nobody is having a capacity in the country. And nobody is taking to produce it in the most economical way. And that’s where we are contemplating so that we can get our modules assembled and manufacture on a contract manufacturing basis by a lot of players who have already set up the capacity and also meet their requirement to supply to the other people.

Atul Tiwari — Citi Group — Analyst

Okay. And sir, just — I mean as we are not well world with how capital-intensive polysilicon manufacturing is. I mean would you be able to give some idea about like how capital-intensive it could be and where is the technology pay going to come from? Or is it like a simple in our job that one can do on also?

Prashant Jain — Joint Managing Director and Chief Executive Officer

So that’s why I said that we are contemplating and then we are putting all the building blocks together. We are in a process of putting the technology fees, the cost fees, economic liabilities fees together and then we will. But we see that this is one that space to fill in and which will make it a very, very viable option. So as soon as we are able to put that thing in final shape, we will be letting you know.

Atul Tiwari — Citi Group — Analyst

Okay. Thank you.

Prashant Jain — Joint Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.

Prashant Jain — Joint Managing Director and Chief Executive Officer

Great. Thank you very much, operator, and Rahul for hosting. Please feel free to get in touch with us with investments, if you have any further questions. Good evening.

Rahul Modi — ICICI Securities — Analyst

Thank you. Thank you very much.

Operator

[Operator Closing Remarks]