Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
JSW Energy Ltd (NSE: JSWENERGY) Q4 2026 Earnings Call dated May. 11, 2026
Corporate Participants:
Sharad Mahendra — Chief Executive Officer, Joint MD & Whole-Time Director
Chandrasekaran Prabhakaran — Chief Financial Officer
Bikash Chowdhury — Head of M&A and IR
Analysts:
Vishal Perival — Analyst
Apoorva Bahadur — Analyst
Aniket Mittal — Analyst
Satyadeep Jain — Analyst
Atul Tiwari — Analyst
Presentation:
Operator
Ladies and gentlemen, Kutti and welcome to JSW Energy Q4FY26 post result earnings call hosted by PL Capital. 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 continues. Should you need assistance during the conference call, please signal an operator by pressing star 100 on your touchstone phone. I now hand the conference over to Mr. Vishal Perival from PL Capital. Thank you. And over to you, Mr. Bharwal.
Vishal Perival — Analyst
Yeah, thanks Michel. Good afternoon everyone. So I welcome you all for the quarter four earnings call of GSW Energy. Today we have leadership team of GSW Energy with us led by Mr. Sharad Mahindra, joint MD and CEO, Mr. Chandrasekran Prabhakaran, CFO and Mr. Vikas Chaudhary, head investor relation and erm. I’d like to thank you to the management for giving PL Capital the opportunity to host the call. And now I’m giving the speaker to Sharat sir for the brief from him and then we’ll have a line open for Kivani.
Over to you sir. Thank you Vishal. A very good
Sharad Mahendra — Chief Executive Officer, Joint MD & Whole-Time Director
Afternoon to everyone and thank you all for joining us today. It is my pleasure to share the highlights of our performance for the quarter and the year gone by. FY26 has been an exciting year where we began to translate the bold ambitions of our strategy 3.0 into hard business outcomes. During financial year 2026, we increased our installed capacity by 2.6 gigawatt to reach at 13.45 gigawatt with generation growing commensurately by 58% year on year. The company reported its highest ever annual EBITDA of 11,041 crores in financial year 26.
Before I delve into our performance, I would like to share some sector observations. India’s power sector continued its structural transformation in FY26. Though demand dynamics were different from what we saw in recent years. Total power demand for the country grew modestly at 0.9% in FY26, the most muted growth in last five years driven by an extended monsoon season that weighed on consumption through the first half of the year. However, from quarter four FY26 onwards we saw a fair demand recovery with demand growth rebounding to 2.1% in quarter four in FY27.
So far, year to date, demand growth remains healthy at a growth of 4.6% year on year. Overall, the season softness that we have seen in the first half of FY26 does not in our view alter the medium term structural demand story in any way. India’s growing industrialization, urbanization and rising per capita consumption continue to underpin a 5 to 6% CAGR in power demand over long term. Peak demand on 25 April 26 reached 256 gigawatt and with the summer of 2026 now commenced and expected to be severe, the system is positioning to handle a new peak of approximately 270 gigawatt higher than the 250 gigawatt record seen in May 2024.
On the supply side, India added 64.9 gigawatt of new capacity during the fiscal of which renewable energy accounted for 50.9 gigawatt translating to 78% of total capacity additions. Non fossil sources have crossed 50% of total installed capacity for the first time in FY26, a landmark moment for the sector. The ongoing West Asia crisis has further reinforced the need of energy self reliance for India. India’s coal reserves insulate us from crude volatility, an advantage the country is actively leveraging.
Structural shifts toward induction heating and EVs are expanding electricity demand while data centers are also expected to anchor the long term offtake. In India the merchant market remained soft through most of FY 2026 averaging approximately 3.86 rupees per unit on exchanges reflecting muted demand. Despite this, in line with what we have maintained, our FYF 26 merchant realizations commanded more than 20% premium to average exchange prices which are driven primarily by strategically executed back to back short term contracts.
We are already seeing tariffs firm up in FY27 as summer cooling demand builds. As mentioned earlier, till date the power demand is up by 4.6%. Now coming to company performance, FY2026 has been defined by scale and integration. We have added 2.6 gigawatt of installed capacity during the year via a calibrated strategy of organic and inorganic route, taking our total operational base to 13.45 gigawatt making us one of the largest diversified power generation companies in the country. The additions span organic commissioning across wind 240 megawatts, solar 305 megawatt, hybrid 451 megawatt and hydro 240 megawatt assets and the full integration of all the inorganic acquisitions was completed in FY25 and FY26.
The integration of O2 Power, the 4.7 gigawatt renewable energy platform that we acquired in April 2025 has progressed well. O2 Power’s operating capacity has grown to approximately 2 gigawatt at the close of FY26 with active construction underway across the remaining portfolio, its asset quality underpinned by diversified geography. Long term TPA with credible counterparties supported with 100% connectivity and majority of the land and rich tariffs has met our original underwriting assumptions. Coming to Thermal on KSK Mahanadi, our 1800 megawatt operational capacity delivered robust performance during the year driven by synergies.
Post acquisition we have been focused on implementing cost efficiencies and improving plant performance and I am pleased to report that PLF has remained healthy through FY26 and among the top 10 plants in the country in the first full operational year. In our hands, the ramp up plan for the remaining units of plant is progressing on schedule with water and rail arrangements firmly in place post our recent acquisition of KSK’s Water and Rail SPD. On the organic front, we commissioned 1.24 gigawatt of new capacities during FY26.
Notably the 240 megawatt Kutahar Hydroelectric Plant which was commissioned in quarter two of FY26 is one of the fastest timelines for a project of its scale, further cementing our position as the largest private IPP in hydro sector. We also acquired 150 megawatt Tidong hydropower plant from Statcraft which is at an advanced stage of completion. I am happy to tell that 50 megawatt of this has already been commissioned on 7th of May 26th and balanced 2 units are expected to be commissioned within this quarter before June 26th which was against the original plan of October 26th.
This timely commissioning will help us catch the ongoing hydro season, adding meaningfully to the top line and bottom line alongside renewables, thermal power has regained its prominence as reliable baseload and we made rapid strides on this front as well during FY26 following the signing of 1600megawatt Saleboni PPA in FY25 we secured an additional 1600megawatt and signed the PPA for the same location making Salbuni our largest single site asset at 3200 megawatt. On the first 1600 megawatt project, construction has commenced and equipment procurement is on schedule as we have informed.
In parallel, we have taken strategic steps to de risk our thermal supply chain through the strengthening of Toshiba GSW joint venture for turbine generators and the acquisition of GE Power boiler business, with the latter transaction expected to be consummated within the next two quarters, turning to our under construction portfolio. JSW Energy is currently building 14 gigawatt of generation projects, all of which are fully tied up under long term power purchase agreements. This high quality fully contracted under construction book gives us strong visibility into future EBITDA.
This fiscal year we are looking to add about 3 gigawatt capacity and a capex spend of around 20,000 crores for the year on our thermal optionality at KSK. We expect the first 600 megawatt to be commissioned by quarter 3 of next fiscal. Beyond this we have a robust project pipeline of approximately 4.6 gigawatt where letters of intent have been secured. Our total logged in capacity now stands at 32.1 gigawatt placing us firmly on track to deliver the 30 gigawatt target of generation by 2030 under strategy 3.0.
Coming to energy storage, we recognize the critical role it plays in integrating renewable energy and ensuring grid stability. Our logged in storage capacity now stands at 29.6 GWh of which 3.2 GWh are in battery energy storage and 26.4 GWh are in the remedy pump storage space. Further, our 5 GWh battery assembly facility in Pune was commissioned in quarter 4 of FY26 and the commercial sales of the battery storage have already commenced. This plan will position us to meet domestic content requirements for battery energy storage system as and when mandated by the Government of India.
Energy storage is fast becoming a mainstream infrastructure investment and we are well ahead of the market in building this capability. Additionally, our wind blade manufacturing facility at Halol in Gujarat scheduled for Commissioning in the first half of FY27 would provide advantage to us in terms of lower capital cost for wind projects due to savings in logistic costs and foreign exchange, thereby strengthening our vertical integration. Coming to the operational performance for the quarter, we have added organic renewable capacity of 118 megawatt during the quarter.
Our net generation for quarter four in FY26 rose by 48% year on year to 11.7 billion units driven by a 68% year on year increase in renewable energy generation on the back of capacity additions across wind, Solar, Hydro and O2 power assets. Before I move to thermal, I would like to mention about the power curtailment. Regarding the power curtailment due to evacuation constraints, I would like to say that about 160 million units were curtailed for us, but a significant portion of this 160M use is under permanent recovery so we are getting the tariff for the same thus not impacting our revenue only A small portion of this curtailment has resulted in a revenue loss of around 16 crores during the quarter and approximately 50 crores during the year gone by.
This curtailment however is expected to be over by July 26 with the expected commissioning of new evacuation line. Thermal generation grew 43% year on year to 8.8 billion units driven primarily by robust offtake at our Mahanadi and Kutkal plants. Our KSK plants PLs for Quarter 4 FY26 remained robust at 93%. Further, our overall thermal portfolio maintained a healthy PLs of 78% for the quarter and 73% for the full year. Compared to this country’s average thermal PLX stood at 68.7% during the quarter and 65.8% during the full year.
I would also like to address one operational nuance from the quarter KSK Mahanadi experienced some PPA backdowns attributable to a transient demand softness in the region. However, we successfully monetized the back down volumes through short term market sales mitigating any major revenue impact. This has since normalized with the onset of summer and the consequent surge in demand. The KSK plant in fact registered an impressive ebitda of over 3300 crores in FY26, also driven by fuel cost reduction through optimizing sourcing of coal from nearby mines resulting in lower logistic costs just like what we did for our Utkal plant as well.
Further, at Utkal both our units are fully operational and the plant registered a PLF of 75% in Quarter 4 of FY26 now driven by full tie up that we had done earlier. Our Vijayanagar plant’s PLF also stood robust at 79% in quarter four with open capacity now at about 5% of our total installed capacity and a 25 year 400 megawatt PPA for the Utkal plant at 5 rupees 78 paisa per unit and another 2 year PPA for 115 megawatt PPA. With Assan reform with effect from 1st April 2026, the quality of our underlying EBITDA has improved substantially.
The predominant share of our remaining open capacity is domestic coal waste with plants closer to the mine which reduces sensitivity to global coal prices volatility and keeps our merchant breakeven economics highly competitive. Now coming to the outlook, FY2027 is expected to be a year of accelerated earnings delivery. The sizable projects commissioned during FY26 will stabilize and contribute to full year EBITDA driving a meaningful step up in our financial performance. India’s Power Demand recovery with the government projecting peak demand of 270 gigawatts this summer and a medium term CAGR of 5 to 6% provides a strong tailwind for our growing portfolio and remain fully on track towards our FY30 targets of 30 gigawatt of generation capacity and 40 gigawatt hours of energy storage.
We remain committed to disciplined capital allocation. Every investment must meet our mid teen return thresholds and our balance sheet management continues to be guided by our leverage guardrails. While net debt has risen as expected during this phase of accelerated investment, the quality and our contracts on our growing asset base means that free cash generation will improve progressively supporting deleveraging on a path towards our 2030 net debt to EBITDA target of approximately five to five and a half times.
Finally and equally important on the people front, we are proud to retain our great place to work certification, a recognition that our culture and people practices continue to keep pace with our growing scale. Also, we have been rated amongst top five 25 places in the manufacturing sector in the country. Moving to our financial performance for the quarter details that most of you have had the opportunity to review ahead of this call. Supported by our robust quarter fourth generation growth of 48%, our EBITDA during the quarter rose 72% year on year to 2,602 crores resulting in an all time high annual EBITDA for the company during FY26.
On the bottom line, our profit after tax came in at 574 crores up 38% year on year and PAT to shareholders stood at 372 crores. As you may know, we have already served a notice to exercise our call option in KSK Mahanadi to acquire the balanced 26% estate. The minority outflow should materially reduce once we consummate the same. Further, our cash profit to the shareholder for the quarter remains robust at 699 crores. Our cash returns on net worth adjusted for our investment in JSW Steel shares remain strong at approximately 18%.
Revenue for the quarter four FY26 grew 39% year on year to approximately 4851 crores, a trajectory firmly anchored in the robust expansion of our generation capacity. As our newer assets continue to be capitalized on the balance sheet, depreciation and interest costs have risen accordingly. Depreciation grew almost 1.7 times during the quarter four on a year on year basis while interest costs increased approximately 2.4 times. Both consistent with the scale of capital deployment underway on the leverage excluding capital work in progress.
Related Debt Our net debt to EBITDA stands at approximately 5.2 times well within our financial guardrails. Our liquidity remains ample with cash and cash equivalents in excess of 10,000 crores. Out of the 3000 crore preferential allotment that we have done recently, 1125 crores has been received in quarter four. On the cost of capital, consistent with our earlier guidance, our weighted average cost of debt declined by approximately 67 basis points year on year to 8.36% as of March 26th. This reflects our healthy credit profile and the sustained confidence our lenders and rating agencies place in US.
Finally, on working capital total receivables as on March 31st it stood at around 3240 crores, translating to better days of 62, a sharp and meaningful improvement from 76 days in the corresponding quarter of the prior fiscal. This reflects both improved collection disciplines and the evolving counterparty profile of our portfolio. The central message is that significant capacity additions we have executed over the past several quarters are now visibly converting into higher generation volumes and stronger cash flows.
We expect this momentum to build further through the remainder of the fiscal and into FY27. Thank you. And that concludes my opening remarks and I am now happy to open the floor for questions. Thank you.
Operator
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions, please press STAR and one on the touchtone pole. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only 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 Mohit Kumar from ICICI Securities. Please go ahead.
Vishal Perival — Analyst
Yeah, Good evening sir and thanks for the opportunity. My first question is I think what is the guidance for re asset commissioning for FY27 and FY28? I think mentioned to do 3 GHz in FY27. Is it possible to break down this between wind and solar and also give FY28 number possible?
Questions and Answers:
Sharad Mahendra
You see the thing is FY27, as I have said that approximately close to about 3 gigawatt of capacity additions will happen which will be a mix of solar, wind and hybrid projects. So the breakup between solar and wind depends on what kind of project, what kind of hybrid which is there. But as per the PPA terms we can say that. But maybe you can say in terms of if I have to do a percentage Maybe out of 3 gigawatt. About close to about 35 to 40% will be wind. Rest all is solar.
Vishal Perival
My second question is has the amount to be paid for minority acquisition for KSK Mahanadi, Is it crystallized? If we ask can you help us with amount? Yeah, no,
Chandrasekaran Prabhakaran
I think it’s not yet crystallized. I think the process is currently on. We can’t comment anything at this point in time I think but it is kind of probably by end of Q2 is what we’ll have some number of
Vishal Perival
Questions. How are you thinking about PPA for KSK Mahanadi? The last 20. Is it likely to remain on a merchant?
Sharad Mahendra
See the thing is that PPA definitely there are demands from different states which are there and the discussions are on. Meeting with our timelines of commissioning of first unit and the balance two units. The discussions are on. Various states want the power. So accordingly as and when the PPA time the requirement comes we will be definitely participating. But however to note that this being close to the mine and the low fuel cost also gives us a leverage to be merchant also. But in a longer term we will prefer to be our strategies to have a long term ppf.
Vishal Perival
Understood. Thank you and all the best. Thank you.
Operator
Thank you. The next question is from the line of Sumit Kishore from Access Capital. Please go ahead.
Vishal Perival
Good evening. Thanks for the opportunity. My first question is on the 3 gigawatt that you’re looking to commission in renewable in FY27. What would be the broad phase out of commissioning of these capacities from Q1 to Q4? If you could give us some sense.
Sharad Mahendra
See the thing is that some of our projects which are at advanced stage of commissioning so we of course giving exact number will be difficult but you can say that maybe it is uniformly divided between H1 and H2.
Vishal Perival
Okay, so one and a half. One and a half roughly. Okay, second question is on CapEx. So when you said about 200 billion rupees of CapEx, I mean the free cash flow that you are generating right now or basically your EBITDA less your net interest cost and the tax adjustment that seems to be enough to take care of the equity requirement for 20,000 crores of capex. So is there any thought process in terms of raising equity funds beyond the infusions that are coming through preference shares and the warrant issuances to promoters?
Sharad Mahendra
Okay, Prabhatran will speak up.
Chandrasekaran Prabhakaran
I think similar to what you understood is right now with the existing 20,000 the cash flows would be generated and with this kind of the net debt to kind of ebitda I think within those ratios we will be able to easily manage this 20,000 crores which we talked about in case like we want to. So we have this additional 1800 crores of which we can kind of present at any point in time. So if you again want to kind of postpone or fast track this we have this leverage to do it.
Vishal Perival
Okay, so just one last question trying to understand the broad breakup of this 20,000 crore capex because there is some allocation that should start happening to the Salboni project something to the battery energy storage system project that you’re commissioning the pump storage hydro. So just to understand because what kind of CWIP should we expect for the thermal project pump storage hydro by the end of the financial year?
Sharad Mahendra
See when you talk of thermal definitely yes when Salvoni work has started and also the pumpysourage project for which we have got the clearance from the environment and Forest Stage 1 clearance. Definitely some investment will go in these projects but we have to remember that normally the year one of such projects doesn’t entail significantly large investments. It is only the order placement and some kind of civil work which starts. So it is a very small percentage of the payment which flows and then gradually it increases so it is not significant.
But if you have want a breakup it can be maybe 16, 20,000 crores we have said you can say 4 to 5,000 crores will be for these projects enabling projects which are the thermal projects and the pump restorer rest all will be in the wind and solar system and battery energy.
Vishal Perival
Very clear. Just one keeping question to understand what was the CWIP for your RE projects at the end of FY26 because you’re going to commission siga what what percentage of the investment has already happened? Just to understand
Chandrasekaran Prabhakaran
We have a total of about 17,300 crores of CVE out of this about close to 11,200 is for hurry and the balance is for the Kurbul.
Vishal Perival
Thank you and wish you all the best. Thank you. Thank you.
Operator
Thank you. The next question is from the line of Ketan Jain from Evander Spark. Please go ahead.
Vishal Perival
Thank you. Thank you for the opportunity sir. It’s true to understand the 2.6 recall of capacity addition how much of it is acquired from OZU and how much of it is
Sharad Mahendra
See out of this 2.6 gigawatt it is 1.3 gigawatt which was the acquired capacity and the rest all it is 5050 but that is acquired and the Rest all is the greenfield capacity which we have commissioned.
Vishal Perival
Understood. I understand that there were challenges this year. So are you still seeing challenges to execute or commission plans on time for SR27?
Sharad Mahendra
See, the thing is we have been all reading and all knowing about one of the biggest challenge has been the project readiness and the power evacuation, the great curtailment, the delays. Because we know that last year government of India had planned for the evacuation networks increased by 15,000 circuit kilometers against the which the actual which happened was only 9,500 kilometers. So those challenges we see that. But otherwise we are insulated because the challenges are whether the land availability or whether the connectivity and we have that 100% of that.
Then only we start the work. So we don’t see of course re projects execution day to day issues of right of way and others is something which is part of the project which is planned and nothing unexpected. So we don’t see any challenges. And with large significant portion of our capacity at advanced stage of commissioning, we are confident at this time that definitely 3 gigawatt of capacity addition will happen without any challenge.
Vishal Perival
Understood. Second question is are we seeing any increase in cost of supply chain disruptions due to the conflict and impact on our irr.
Sharad Mahendra
See, one thing I like to say that if we talk of whatever the commodity cycle price increases we have seen in general and the currency impact on import related components for wind. As I have maintained earlier that we signed a fixed price contract for 2.4 gigawatts of wind turbine supply from Sami Wing China which is fixed in terms of the pricing and fixed in terms of the currency also which we did in around April March April to 2024. We did that sign that contract and that contract quantities have supplies have recently started.
So we are insulated from that for maybe next at least one and a half years. On wind side there is no impact to us of course minor impact on the domestic purchases. If the steel prices go up, the tower cost goes up because that is all steel. But that is a very cyclic industry steel. So we time our bulk buying accordingly when that is the best suited for us. So we are largely not impacted even if there is a small impact with the commissioning of our blade plant in India. That will further help us because of the huge reduction in the logistic cost both in terms of the ocean freight from China and also the local logistic cost.
So all those things put together we remain insulated from any cost impact for next one and a half to two years. On solar front, with what we have been seeing the increase in solar cell prices the currency impact because of the solar imports from the cell imports from China I like to say that even if the ALM comes for solar cells Also for all PPAs what we are executing next two two and a half years is all before the date on which we are allowed as per the rule regulation the rule that import from China will continue so to large extent we are insulated of course the steel also is a cost some portion of the cost on this so the same as we are doing for wind tower steel purchase we are timing our purchase to have a minimal impact on our solar projects and our benchmark return IRRs of mid teen IRRs that remains protected.
Vishal Perival
Thanks for your update answer this is the last question at the industry level is there any update on the unsigned PPAs at the country level Are things moving? Are things moving in that?
Sharad Mahendra
No, right now we are not seeing because there are enough PPAs which are signed and which are to be executed for next two to three years time and with the evacuation challenges which are there which is are going to ease out only by 2029 not before that we are not seeing any significant movement on the signing of the PPS for the unsigned capacity that status remains as it is what it was last time when we
Vishal Perival
Understood just the last if I could squeeze in what is the bass pack prices right now and does it impact our project execution? This Last1See
Sharad Mahendra
BSS
Vishal Perival
Can you repeat the question? So this is fact right? Like the capex for a basis project.
Sharad Mahendra
See the thing is when we are inflating definitely we have seen that there have been price increases which have happened but as I told you that we are we have been able to optimize our cost by starting the assembly plant within our facilities under JSW so whatever impact on sell pack prices are we remain much more competitive as compared to the best imports which are coming with our facility commissioned in quarter four
Vishal Perival
What would be the back price right now sir
Sharad Mahendra
It is varying Again if you are at tier one tier two very difficult to give a number Tier one, tier two tier three suppliers whether it is a three year warranty, whether it is a five year warranty it depends. So very difficult to give up a specific number.
Vishal Perival
Thank you. Thank you. I will get back to you.
Operator
Thank you. The next question is from the line of Apurva Bahadur from IFL Capital Please go ahead.
Apoorva Bahadur
Hi sir. Thank you for the opportunity sir. Just sort of delving deeper into this 5 gigawatt hour best sell to pack assembly plant that we’ve operationalized. Can you provide Some color on how you’re thinking about the margin profile of this business. How much should be the revenue contribution that we start building in our models? And have you built any order book?
Sharad Mahendra
Yeah, you see the thing is that this is in a ramp up stage and will be taking care of my own captive requirements as well as. Because once this capacity ramp up and stabilization takes its own time, maybe going forward, definitely the in house requirement as well as to the outside market. We will be definitely looking for outside market. We have got some order but right now the testing of the products are going on and the necessary approvals which we expect very soon. And then we’ll be going into the marketplace.
So then only we will be in a position to come out with what is the revenue and the financial numbers on this. Maybe next time we will definitely like to share on that.
Apoorva Bahadur
Okay. And so where are we importing ourselves from? In which. Which manufacturer in China?
Sharad Mahendra
There are multiple. There are multiple. But definitely we are concentrating only on tier one suppliers. Definitely. And we will be importing from them.
Apoorva Bahadur
Okay. And on the renewable capacity addition target for FY28, if you can provide some guidance over there.
Sharad Mahendra
See as we have said that we have to reach 30 gigawatt by 30 and if we add maybe 3 gigawatt this year, so maybe 3 gigawatts approximately from the RE front you can say maybe about 3, 3.5 gigawatts something is the number which definitely will continue to add.
Apoorva Bahadur
We would expect a sharp uptick in capacity addition in 29 and 30. FY 29. FY 30.
Sharad Mahendra
Yes. Because what will happen is. Yeah, yes. Beyond FY 27 it is the thermal capacity also will contribute which is the KSK 1.8 gigawatt 1800 and also by FY30 partial capacity of Salvoni also commissioning is planned. So all those things put together thermal will also be a capacity which will be added in this.
Apoorva Bahadur
Fair enough. Thank you so much, sir. I’ll get back in the queue.
Operator
Thank you. A reminder to all the participants that you may please press Star and one to ask questions at this time. The next question is from the line of Aniket Mittal from SBI Mutual Fund. Please go ahead.
Aniket Mittal
Thank you. I joined the call a bit late so apologies if any questions are repeated. But on Mithra, what’s the reason for the increase in EBITDA this quarter on a Y basis?
Sharad Mahendra
Yes Maitra,
Chandrasekaran Prabhakaran
Actually there is a one of this quarter like you must also be read in the Supreme Court gave an order on the generation based incentive. Right. And that is the pump to the increase which you have been able to see.
Aniket Mittal
What is this number?
Sharad Mahendra
It is 50 peso per unit is what the generation base incentive and it is in excess of 200 crores.
Chandrasekaran Prabhakaran
210 crores.
Aniket Mittal
So this is, this is a one of this. So this includes certain parts as well?
Sharad Mahendra
Yeah,
Chandrasekaran Prabhakaran
That’s
Sharad Mahendra
It. Yes, yes. And for now going forward, which was not being given every year we’ll be getting the generation based incentive based on this order which was not being given earlier.
Aniket Mittal
And for a commissioned wind and solar portfolio which is almost 6 gigawatt, what would be the annual steady state?
Sharad Mahendra
See you can say that almost 75 lakh rupees megawatt is what you can take as the steady state EBITDA for full year capacity available.
Aniket Mittal
And just on this one case, if I recollect, I think next year there’s supposed to be a slight drop off in the tariff at that upcn. So this year we’ve obviously done a fairly good amount of EBITDA. But how does that move heading into FY27 and 28?
Sharad Mahendra
See we have to remember two things. One is that in FY 25 March when we acquired the full year EBITDA, that plant made from the operations was around 2,650 crores. Against that we have made almost in excess of 3300 crores this year. Of course lot of efficiency improvements. In terms of the cost efficiencies improvement, what we have done is one which will continue. Of course there will be some impact because of the tariff reduction from up, but a part of this will be compensated by maybe two, three steps.
What we have taken one is that after the acquisition of the rail and water SPVs, especially the rail one, the efficiency improvements and the cost reduction there also is going to contribute to and second is in terms of the fuel allocation which we have optimized by sourcing majority of the fuel from the mine which are closest to our plant and replacing the fuel which was coming off from far off basis. So fuel logistic cost reduction is one of the main drivers efficiency improvement during the last year.
But during the year we did lot of steps we took in terms of operation and maintenance cost reduction. So those steps which have been taken during the year will also give us full year benefit in the current year will help us to mitigate the reduction in the margins because of the upppa. So but definitely it will continue to perform significantly better than what it was in FY25.
Bikash Chowdhury
If I have to add this is Vikash here If I have to add, we’ve always said that please consider a steady state EBITDA of 2700. So the idea also is that please assume that a good year is what we are highlighting and the reasons for what we are highlighting. But during this fall in trajectory we said that please assume 2700 as our base case EBITDA
Sharad Mahendra
And with the steps we are taking, we are confident that we will be delivering better than the steady state ETA what Vikas just said of 2700 crores, you can say
Aniket Mittal
That is helpful. I just have one last question. So when I look at the standard entity, the overall debt over there is almost 15,000 crores. So a lot of holdco debt coming over there. Just to understand, you know how this is, how this is panning out from a maturity point. What’s the maturity profile over here? What’s the average interest rates at the Hong Kong level
Chandrasekaran Prabhakaran
See at the full core level. So basically out of this, some of them are kind of the short term which will kind of because some of the acquisitions that we have done right in terms of the KSK Rail and all. So these are kind of, some of them are temporary. So once we take over these assets we will kind of refinance it through the major entity or the actual entity which we do. So in terms of you look at it from an overall perspective, I think all of them are close to more than kind of 3 years except for about close to 4500 crores which is in the form of shortfall.
The others are all long term.
Aniket Mittal
And what would be the average interest rate right now? The Hong Kong level For these, for these
Chandrasekaran Prabhakaran
We are at about close to 8. 8.8.2 is what we’ll have. But as a whole consolidated we are at about 8.36. See
Bikash Chowdhury
Alike. To add to what you know we would like to have a project finance based financing which means that from maturity the maturity as long as possible for borrowing. Now old school level like you mentioned is obviously short tenure. And for us the overall cost of Debt is about 8.36 including working capital. Right. So what we are saying is that obviously these short tenor borrowings are there and they will be obviously at a lower, lower cost. But overall if you look at the real estate trajectory, it has come more
Aniket Mittal
Understood. There’s one more question. Thank you.
Operator
Thank you. The next question is from the line of Nikhil Naganya from Bernstein. Please go ahead.
Vishal Perival
Hi, thanks for taking my question. I had two questions. Number one was any plan to set up a merchant battery energy storage plant.
Sharad Mahendra
See Right now we are in the process of executing the battery energy project for which we have signed the ppa. But going forward, wherever we have the solar capacity and keeping in mind how the evening peak demand shapes up, we will definitely keep exploring. But immediately in the current year, if you ask, we will be focusing on our projects under the ppa. But going forward we will keep exploring that merchant option for especially where we have the connectivity, we have the solar plants coupling the same connectivity for the evening peaks is one option which the team is working on.
We keep evaluating.
Vishal Perival
Understood. But what I understand from your peers is some of them are preponding the battery plant part of a PPA to use it in the merchant in the interior starts. Would you have any such plans like that to prep on your battery before the solar?
Sharad Mahendra
See, when I compare with what others are doing. See we if you see that we don’t have any merchant or open capacity in our solar portfolio, all is tied up, whatever is sufficient. And what we are doing is also and today we see that there are curtailments happening, especially capacities which are open untied merchant capacities in solar are facing a very high curtailment is what we are seeing. So that is where it’s a sunk cost as per me. So putting a battery using that power which is getting curtailed, charging the battery and using the evening peak option is something maybe others may be thinking on.
But I feel that this curtailment issue is a matter of three to four years. Whether for a long term I can do the investment on the basis of this principle somehow doesn’t fall in our scheme of things because we look for at least a battery life of 12 years. And based on that if the returns are protected is a better option rather than going immediately only temporarily for us. So for us it will be because we don’t have any open capacities in solar. So we are evaluating by setting up charging the batteries by solar and evening peak.
Once that model is financially definitely giving my benchmark returns, then only we’ll be moving ahead.
Vishal Perival
Understood. Appreciate your response. The other question I had was on the DSM regulation in case it is implemented as per the CRC document says and given you have a good quantum of wind as well in your portfolio, what is the impact the envisage on your financials?
Sharad Mahendra
See this new DSM regulations. We expect a total impact which we have budgeted in our plan is between 1 1/2 to 2%.
Vishal Perival
1 and a half to 2% of revenues of the renewal.
Sharad Mahendra
Yes, yes, yes. Which was not zero reminded it was not zero. Earlier also it will move up to 1.5 to 2%. It used to be there today also but now it will be slightly more
Vishal Perival
And would be fair to assume as that X factor in the DSM rule changes by 2030 this number goes up further.
Sharad Mahendra
See the thing is now when it is known that this is going to happen, everyone now is going to be designing the project, building the project, the tariff business, everything. The discovery will be accordingly. So that is definite. But yes, the tariffs have already been discovered, the projects being executed. Definitely this is going to impact. But there are options and tools available to minimize this. One of the things which is, which is being talked of is that at a particular substation grouping all the maybe other producers who are in the same substation at a group level to see to do the settlement rather than individually because someone may be at a particular moment access, someone may be down.
So it is more from the grid point of view. This is being done grid stability. So we are absolutely certain industry has made the representation at a group level. This will be assessed not at an individual level is what we are confident of.
Vishal Perival
Got it. Appreciate your answers. Those are my questions. Thank you so much.
Sharad Mahendra
Thank you. Thank you.
Operator
Thank you. The next question is from the line of Abhishek Nigam from Motilal Oswal Financial Services. Please go ahead.
Vishal Perival
Yeah. Hi. Thank you so much for the opportunity. So just two questions. One, these Andhra based generation based incentives, is that included in other income? So that’s my first question.
Chandrasekaran Prabhakaran
Yes. Yeah. I think certain of it is part of revenue and certain of it is. So I think you can say about 100, 100 crore. One is part of revenue, the other 100 is part of the benefit.
Vishal Perival
Okay. Okay. So I think the increase in other income is because of, I mean there is some other reason for that, for that. Okay, that is one. And second on the deferred tax assets if you can you know, give us some clarity. I think we’ve seen in the past also one of the quarters and you know, going forward also could there be more such tax creation?
Chandrasekaran Prabhakaran
Yes. I think the deferred tax asset is primarily on account of two things. One is that if you see that Ubkal there actually we had certain unabsorbed depreciation and business losses which were there. Now with the PPAs being signed for the entire capacity there is visibility in terms of recoverability of these tax losses. And that is why this year when we signed the PPA and we said that we’ll be able to kind of recognize this deferred Tax. So this is a one off. I think mostly both USKAL is the major one.
The second one is in the ksk. The second one is in terms of. Because currently with the new tax regime because everybody would kind of transition to the new tax regime. The current tax would be similar to what it was like 17 to 18% because you will have to adjust 25% of their. So I think going forward that will be the this one. I think we’ll be inching close to the effective tax rate of 23, 24% going forward.
Vishal Perival
Okay. Okay, that’s it for me. Thank you so much.
Operator
Thank you. The next question is from the line of Satadik Jain from Ambed Capital. Please go ahead.
Satyadeep Jain
Hi. Thank you. The first question is on the re commissioning you talked about 3 gigawatt this year, how much would be CTU, how much would be STU and generally are you seeing maybe faster commissioning for STU versus CTU and do you expect some any changes there this year?
Sharad Mahendra
See whatever we are commissioning, it’s a mix again of CTU and STU and also the CNI customers also under the group Captive. So connectivity is available for whatever we are creating gigawatt we are planning whether it is STU or ctu. So it doesn’t make any difference whether it is STU or stu, which one will happen earlier. And as I said that this time as compared to the previous year in H1, we will be seeing almost close to 50% of the capacity coming up which means that the project is at an advanced stage, connectivity is available.
So we don’t see this doesn’t make any difference whether it is CPU and S2, it’s a mix of CPU and SVU projects. And also as I told you also
Satyadeep Jain
And secondly just on the return profile for rei, I’m sorry if I missed it. What kind of curtainment do you build in the projects when you bid for a project for long term? And when you mentioned DSM, just clarifying you mentioned about 2% revenue rate is that X is equal to 0 and assuming is it assuming grouping at the substation or is it without grouping at the substation?
Sharad Mahendra
One thing is curtailment. I will just like to bifurcate into two One is that a significant portion of our capacity is under Group captive which is off grid. So I’m insulated from the curtailment on those capacities which are almost a gigawatt of capacity which is operational. And further we are going to add in the current year also and next two years, three years we will be continuing to add off grid group Captive capacities. So there we are insulated from this DSM regulations. In addition to that next question.
Aniket Mittal
The
Satyadeep Jain
Question when you look at when you calculate dsn.
Vishal Perival
Yes.
Bikash Chowdhury
Two
Satyadeep Jain
And a half percent of revenue hit is that when you consider X is equal to zero and assuming grouping or if this is without grouping in the substation.
Bikash Chowdhury
So. Sorry. Hi. You know what he was saying is that it’s the worst case scenario that it is seeing considering the what has been announced as of now. If there is grouping, obviously everyone benefits and we benefit out of it.
Sharad Mahendra
And what we see is not as two, two and a half what we said. It is one and a half to two is what I said. And also it is not zero today that we don’t have to make it from zero to one and a half. There is some which is there also it has become stricter now. So it is without grouping is what I have said. After that we expect that things can improve. But with the grouping this will reduce.
Satyadeep Jain
Just one more. If I can speak. On pump storage you mentioned 2030 for one and 2031 for another. Do you expect groundbreaking this year? And then what is the typical construction timeline you’re looking at for these TSP projects?
Sharad Mahendra
See normally for pump storage projects we see that from the zero day, maybe 36 months. And as I told maybe in my opening remark, we have got the Forest Stage 1 clearance just two days back. And work in the non forest area has already started. The contracts have been awarded. The electromechanical ordering has already been placed. So we are confident that that will be in time. This will be 36 months.
Satyadeep Jain
Thank you so much.
Operator
Thank you please. And gentlemen, due to paucity of time we will request all the participants to kindly limit their questions to only one. We’ll take the next question from the line of Mohit Pandey from city. Please go ahead.
Atul Tiwari
Yeah. Good evening sir. Is it possible to give any color on our merchandise in April and May? So far.
Sharad Mahendra
See as we have been saying that normally in the merchant when we sell the our open capacity we normally are it is through bilateral contracts. And I can say whatever merchant tariffs are being discovered in the market, we will definitely maintain at least minimum 20% premium. And we are continuing this that what we have demonstrated last year also overall discovered price we are more than 5, 20% premium. We are continuing to sell even in the current quarter.
Atul Tiwari
Okay sir. And are there any risks to the performance of our high gel portfolio due to possible El Nino and heat sales?
Sharad Mahendra
No, we don’t see that. Reason is that if you see when the Temperature increases Right now when we have been seeing onset of summers and the temperature increasing we are seeing because snow melting was slightly lower last year. But now with the good snow melting the river flow is better and the power what is required even if there is in past also data clearly shows that Even if there is 6, 7% 8% below normal monsoons the water flow required to run at full capacity and to go as per the design energy is sufficient.
So we have reviewed and we have evaluated this and we are absolutely certain that we don’t see any significant impact on our hydro operations because of this weather impact.
Bikash Chowdhury
So just to add there are broadly two ways. One is obviously snow melt the other other is rainfall. So like S was saying that last time the rainfall was there this time there will be so much. If there is like you said going to be higher re therefore for run of the river it’s not a concern as it’s been highlighted earlier as well and we reiterate the same.
Atul Tiwari
Understood sir. Thank you so much and wish you all the
Operator
Best. Thank you. The next question is from the line of Atul Tiwari from JP Morgan. Please go ahead.
Atul Tiwari
Yeah sir,
Vishal Perival
Will it be possible to at least qualitatively share how much was of KSP’s 930 odd crore rupees of vida was due to merchant in the quarter.
Sharad Mahendra
What you’ll see. We will maybe we divide and we’ll come back. My IR team will definitely get back to you and we’ll give you the the number
Aniket Mittal
Broadly speaking I mean obviously your pad has been held by deferred tax creation. I’m sorry to interrupt
Operator
You Mr. Tiwari. I would request you to kindly limit to only one question please. There are other. Thank you so much. We’ll take the next question from Rajesh Majumdar from 361 Capital. Please go ahead.
Vishal Perival
Yes sir. Thanks for the opportunity. Sir, you are talking about additions of roughly 2.53 gigawatts per annum as I understand. And if you see that pipeline for next year FY27 it consists of other than group captive guvnl then 2 or 3 tranches of seci and I think sjvn if I’m not mistaken. Do you see any kind of delays in these projects? Any of these which can happen or with the installed capacity is like for falling short of our targets. And
Sharad Mahendra
Yeah see the thing is what you have pointed out is very very correct. We definitely see the delay in this because we have deliberately delayed the execution and investment in these projects because the availability of the allotted Connectivity is getting delayed. So we are aligning our investment and commitment commissioning with the commissioning of the evacuation. We don’t want to invest, make the asset ready and then wait that I’m not able to commission because of this curtailment issues and the connectivity issues.
So we are particular. We are insulated from any kind of penalties or anything because of the delays. So we are absolutely certain. Yes, yes.
Vishal Perival
So I mean I missed it probably earlier. Did you reduce your earlier increase of 2.5 to 3 gigahertz per hour? You still maintain that based on these orders that we have, which is a lot, you know, heavy.
Sharad Mahendra
Can you repeat the question? I
Vishal Perival
Said the addition for this year is about 3 gigawatt which includes a substantial amount of SECI orders. Do you see any delay in this kind of addition for FY27 which will get postponed to next year?
Sharad Mahendra
No, no, we don’t see at all. As I said earlier also we are absolutely certain because the challenges for which the projects are getting have been getting delayed are not there. In terms of connectivity, in terms of land availability, in terms of execution, the various stages, the projects are. So we are certain that the current 3 gigawatt in the current year, we absolutely certain that this will be there.
Vishal Perival
Okay, just one follow up question. Sir, I’m sorry
Operator
To interrupt you. I’m so sorry to interrupt you. There are others who are. Thank you so much. Sir. We’ll take the next question from Nikhil from UTI Mutual Fund. Please go ahead.
Bikash Chowdhury
Just. Just one question.
Vishal Perival
So what has been the impact of curtailment on our ebitda? If you can quantify that in terms of rupees cross.
Sharad Mahendra
Yeah. As I told in my opening remarks also during the quarter, as I told you, the curtailment was not significant because a portion of the curtailment was under permanent grid network access connectivity. So I thought my plant was available, the power was offered but full flow. So I have been getting the tariff for that some portion which was under temporary grid network access because of the delay in the connectivity department and connectivity execution. So we have. There had been a loss of around 15 crores during the quarter and full year.
Approximately 50 crores the impact and it is in two of our assets in the state of Rajasthan and where the this evacuation capacity is getting commissioned maybe sometime in July. So we expect after this this will not be there.
Operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for closing comments. Thank you. And over to us.
Sharad Mahendra
Yeah, before I close, maybe Atul from JP Morgan asked for what was the merchant EBITDA on Mahanadi during the quarter? The EBITDA from the Merchant sale was 203 crores. I just wanted to give that number.
Vishal Perival
Thank you, sir.
Sharad Mahendra
Thank you everyone. And thanks for being with us. And maybe we hope to meet you all very soon again. Thank you.
Operator
Thank you, members of the management, on behalf of PL Capital, that concludes this conference. We thank you for joining us. And you may now disconnect your lines. Thank you.