Nava Ltd (NSE: NAVA) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
Unidentified Speaker
Mohit Kumar — Moderator
Ashwin Devineni — Chief Executive Officer and Executive Director
Nikhil Devineni — Executive Director and Senior Vice President
Gorthi Rama Krishna Prasad — Executive Director
Analysts:
Unidentified Participant
AM Lodha — Analyst
SriKrishna Agarwal — Analyst
Nidhi Shah — Analyst
Viraj Mahadevia — Analyst
Aryan — Analyst
Vijay P — Analyst
Radha Agarwalla — Analyst
Shree Gopal Kankani — Analyst
Faisal Hawa — Analyst
Anand Raj Singh — Analyst
Presentation:
operator
All right, ladies and gentlemen, good day and welcome to the Naval Limited Q4NFY 25 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator while pressing start and feed on your touch tone phone. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you. And over to you, sir.
Mohit Kumar — Moderator
Yeah. Thank you, Shruti. Good evening. On behalf of ICICI Securities, I welcome you all to the Q4FY25 earnings call of Naval Limited. Today we have with us from the management. Mr. Ashwin Devanani, CEO. Mr. JRK Prasad, Executive Director. Mr. Nikhil Devanani, Executive Director, Mr. KVS Battle, CFO. And Mr. V. Sir Naju, Company Secretary. We’ll begin with the opening remarks from the management which will be followed by Q and A. Thank you. And over to you, sir.
Ashwin Devineni — Chief Executive Officer and Executive Director
Thank you. Good evening everyone. And thank you for joining Nava Limited’s earning call for the fourth quarter and the full year ended March 31, 2025. We appreciate your continued interest and support for FY25. Nava Group delivered multiple milestones. Our consolidated revenue was INR 4135 crores at a year on year growth of 4.6% and a PAT of Rupees 1434 crores. Our revenue and profit for the year are the highest ever. All our major segments, metals, mining and energy have shown robust growth as compared to last year. Our Ferro Alloy’s business has significantly turned around. And contributed to the improvement in the profit in FY25.
We have also seen significant improvement in Mel’s receivables position. Post the close of the financial year, Mel received 55 million which has helped it repay its shareholder loan in full to the sponsor. With an objective to improve shareholder value. We completed two corporate actions during the last financial year. A stock split in quarter three and a share buyback for rupees 360 crores in quarter four. In addition to these, we continue to maintain our dividend distribution at a healthy rate. Our new projects under Mamba Solar, Nava Avocado and Kawambwa Sugar are showing encouraging progress. We are progressing on a robust cash and capital allocation plan which sufficiently meets our expansion objectives.
We remain committed to optimizing costs, improving efficiencies and driving strategic investments to create value for all stakeholders. With that, let’s dive into the specifics of our financial performance as I open the floor for any questions you may have. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants please limit your questions to the participant. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of a.m.
lodha from Sanvati Consulting. You may proceed.
AM Lodha
Good afternoon gentlemen. Hello.
Ashwin Devineni
Good afternoon.
AM Lodha
Good afternoon sir. Congratulations. Good set of numbers. I have got two questions. Number one is relating to your tax provision. Your tax provision in stand alone is 27 in the. I am talking of this quarter sir. In tax provision of 27.44 crore in quarter 4A stand alone. Whereas in consolidated I found it is tax Provision is only 6.39 crore. According to me your tax exemption in MCL should have been expired in this December 24. So in March quarter 25 the MCL would have been eligible to pay 50% of the eligible tax. That is the rate of 35% in MCL.
So you please number this number one question. This is the area by this position. Number two write back your written back some 47.52 crore out of the earlier provision made for the credit loss. So just I wanted to know how much amount is still pending to be written up on receive on the amount when the amount will be received from the MCL. For the areas. This is the two questions there. Yeah.
Ashwin Devineni
So from perspective we still have $105 million which is pending to be selected and the corresponding ECL provision that is existing in the books is $16.8 million. On the tax rate the quarter four for the consolidated the tax expense is 21 crores as per the financial statement. And it is the MEL tax exemption that you have said. That tax exemption continues till the end. Of financial year 26 and only after that we get into the next regime of 50% tax exemption and for three years and after that 100% beyond that. So we are still in the tax exemption for MDL even for the next financial year.
AM Lodha
100% tax exemption for that financial year?
Ashwin Devineni
Yes.
AM Lodha
That’s was five years from the date of commencement of the business.
Ashwin Devineni
From the complete of commencement of the tax will become.
AM Lodha
From the date of commencement of actual income.
Ashwin Devineni
That is after adjusting the investment element the taxes income comes in. So we have two more years to go. I mean this year and next year. Next year we will have it up to end of financial year 26.
AM Lodha
Okay sir, thank you very much. I will rejoin that you.
operator
Thank you. The next question is from the line of Sri Krish Agarwal, an investor. You may proceed.
SriKrishna Agarwal
Good afternoon gentlemen. My questions have been answered so please go ahead.
operator
The next question is from the line of Nidhi Shah from ICICI Securities. You may proceed.
Nidhi Shah
Yes, thank you so much for taking my question. So firstly on, on the solar power plant at Mamba, I wanted to know. What is, what was the, sorry, what. Is the cost of that plant? And, and at the same time do we have a tie up for, for, for Q1 for that 150 megawatt or not?
Ashwin Devineni
Sorry, your first question was on the total cost of the solar. So the project cost that we have envisaged is US$90 million. 63 would come in the form of debt and 27 come in the form of equity. What was your second question?
Nidhi Shah
So on the NVIS the 150 megawatt power plant I wanted to know if we have have a tie up for Q1 for that.
Ashwin Devineni
Yeah, I think for the 150 megawatts we have been looking at entering into short term bilateral contract of which we have a commitment until September.
Nidhi Shah
All right. And lastly I wanted to know what is the update on the construction progress of. Of the 300 megawatt expansion?
Ashwin Devineni
Yes, progressing well. I think we’re still sticking to the original schedule of commissioning in August 2026.
Nidhi Shah
All right, so I’ll get back to Further questions. Thank you.
operator
Thank you. The next question is from the line of Viraj Mahadevia from Moneygram. Yama Praseer.
Viraj Mahadevia
Hello. Hi. Hi. Congratulations on the shareholder value enhancing measures. The 7.5 dollars per kilowatt hour for the new plant is lower than the old plant, is that correct? And if you can throw some light on that.
Ashwin Devineni
Yeah. So the accident, the tariff for Solar is actually 7.8. That’s the tariff that we have negotiated that kind of escalates in the year. On year. Yes, it’s less than. I mean the tariffs we are getting for the coal fired power plant, which is normal.
Viraj Mahadevia
Okay, seven and a half is for the solar, is it? Zambia Solar?
Ashwin Devineni
Yeah, 7.8.
Viraj Mahadevia
And the second 300 megawatt is similar to the first thermal tariff. Nine point something.
Ashwin Devineni
Yeah. No, so the tariff for the phase two, 300 megawatts is 9.5 cents. It starts with 9.5 cents. And then year on year, this is quite estimated.
Viraj Mahadevia
Understood, understood. And you mentioned the target timeline for Zambia power is August 26th. How about the sugar plant and the avocado plantation? When will they start contributing to revenues?
Ashwin Devineni
So in terms of avocado, we should actually get our first commercial fruit. It will come in a small way, in a very phased manner. Please grow. You know, you get your fruit and we started in a small area of 50 hectares, that should start fruiting and we should get our first commercial crop by the end of this year. That will be in a small quantity. And in terms of the sugar, March 28th is what we’re looking at. Okay, the commission.
Viraj Mahadevia
Understood. And the last question is the balance 100 million due from Zambia, when is that likely to come through for the arbitration award? Can we expect it by September quarter?
Ashwin Devineni
I wish. I’m not going to put any. We’re in constant discussions with the utility. They’ve done a great job in terms of at least paying us what they paid us today. But we forecast by the end of this financial year we should get the remainder of the amount.
Viraj Mahadevia
Okay, so what is your next deadline as of March 25, what is next overall at console level?
Ashwin Devineni
I’m sorry, can you repeat that?
Viraj Mahadevia
What is the net debt of Nava at the console level as of March 25? Prior to this, 55 million. $55 Million.
Ashwin Devineni
It doesn’t appear as a debt.
Viraj Mahadevia
No, no, no, I’m saying prior to receiving the 55 million which came in April for your press Release, as of March 25, what is the net debt at the consolidated level?
Ashwin Devineni
No, no, you’re asking about Nava debt. Right. Consolidated.
Viraj Mahadevia
Nava’s consolidated net debt. Yes.
Ashwin Devineni
Yeah. So apart from the phase two which is a 300 megawatts in Mamba where we have a current debt of about 94 million, we don’t have any other debt at the now a level.
Viraj Mahadevia
Understood. So that’s the only debt. The call it 100 million.v
Ashwin Devineni
And by the way, the phase two debt is non recourse.
Viraj Mahadevia
Understood. But presumably that will also get net off in Q1 with the 55 million that’s come in in April. Right. So it’s technically 55 million has nothing.
Ashwin Devineni
To do with it. 55 million is you could actually consider nested big zero in the sense that the cash balance is much more than the debt that’s drawn for phase two.
Viraj Mahadevia
Okay. Okay. Understood. Thank you. All the best.
operator
Thank you. The next question is from the line of Anant from cis. You may proceed.
Aryan
Sir. Congratulations on the wonderful set of numbers. The first question is that do you have any tax concessions on the phase two of the project? Sir.
Ashwin Devineni
At this point it is not there. But we would probably go for that kind of a tax relief once the plant is commissioned. This actually will get taken in about three to four years from the date of commissioning. Post the investment element being absorbed inside the company.
Aryan
Okay. Okay. Sir. Also like how many years of the PPA project?
Ashwin Devineni
BPA is for 20 years.
Aryan
And how many years is remaining?
Ashwin Devineni
Sir, your output. Phase one.
Aryan
Phase one.
Ashwin Devineni
Yes, phase one. PPA started in 2015 for 20 years. So you still have to go.
Aryan
Okay. Okay. Okay. And sir, like what the deadline for the solar plant that we have set internally. Like if you can.
Ashwin Devineni
Sorry, can you repeat yourself?
Aryan
So what kind of a deadline are we looking at for the solar power plant that we’re going to set up?
Ashwin Devineni
Yeah, so we’re looking at commissioning it possibly by July 25th.
Aryan
Okay. Okay. Sir, I have. I’ll come back in queue for further questions. Thank you.
operator
Thank you. The next question is from the line of .
Vijay P
Good afternoon. I hope I am audible. I’ll begin with congratulating Mr. Ashwin Devineni on his elevation as the managing director of the company. And Mr. Nikhil Devini to join the board as executive director. My first question is for Mr. Ashwin Devineni. The press release was silent on the 300 megawatt power plant expansion. But then people have asked the questions already and most of my queries are answered. There is no mention about the Ivory coast project of Manganese mine and the Ferrule plant. And the further concessions received in Zambia for critical minerals etc and iron ore.
Could you please elaborate on that?
Ashwin Devineni
Yeah, so I think I’ll let Nikhil answer the Ivory course question, but if I understand you correctly, your question on the expansion, you don’t have any, right? They’ve been answered.
Vijay P
No, I was saying the expansion was not referred to in the press release, but then people have already answered. You already answered the questions that I had about the timeline, about the completion schedule, etc, which you have reconfirmed that it will be August 26th.
Ashwin Devineni
Yeah. So on the Ivory course, as we’ve disclosed, the plan is to set up a 22.5 MVA furnace to start with as phase one, producing about 40,000 tons of silico manganese per annum. And this would be coupled with the captive power plant via biomass generation of about 25 megawatts. Now, this entire project essentially hinges on two main factors. One is raw material security and the second is acquiring the land. Now, on the raw material security we have been allocated two mines, one which was already explored for a period of two years. And we concluded that in terms of taking it forward with respect to commercial mining, it is not a viable prospect.
The second mine, which is in the northern part of Ivory coast, is about 360 square kilometers out of which about 27 has been shortlisted as a prospectus zone. So the final geophysical studies are ongoing as we speak. And I think in about six months to a year we should have a clearer picture in terms of how the potential is with respect to the land. We are still working very closely with the government of Cote d’ Ivoire. I think in about three months we should have a clear update. Yeah, yeah.
Vijay P
The second one was the question about the mining concessions in Zambia for critical minerals and iron ore.
Ashwin Devineni
Yeah, So, I. Mean, there were two basically that we had disclosed previously. One was with regards to the magnetite, the inor, you know, we had conducted extensive exploration activities, including drilling, and what we found was while the grade of the magnetite was very favorable on top, as we kind of went down, it started to go down in terms of quality and we finally consumed is that the commercial viability in terms of mining probably wasn’t there. So we decided to take a halt on further activities at the iron ore magnetite mine, whereas on the lithium exploration activities are currently underway.
We’re sitting on two concessions of lithium spanning about 11,000 hectares. So it’s quite a large piece of land and exploration activity are currently underway.
Vijay P
My second question is for Mr. Nikhil Devineni. I believe that he is now looking after the ferrol oil business in India, the feral business has been at a nearly standstill for the last many, many years. Do you have any plans to grow in feral business in.
Nikhil Devineni
So when you say standstill I assume you’re talking about in terms of.
Vijay P
No, what I’m talking about is a capacity. The capacity growth and the capacity is always underutilized.
Nikhil Devineni
I would not be underutilized because if you look at our plant load factors over the last couple of years it’s close to near optimum level barring the unplanned shutdowns that we’ve had in a couple of instances. But in terms of expanding the production it really does not make sense at this juncture given that there is a massive oversupply of material in the market. I think the only time we would seriously consider an expansion within India is probably once we get our hands on the raw material source. Because today that contributes about 40% of your entire costing.
And if you do not have our own raw material source we are essentially devoid of any competitive advantage. So given today’s market it really doesn’t make sense to expand without having that.
Vijay P
Questions? Thank you very much. I have no further questions.
Nikhil Devineni
Thank you.
operator
Thank you. The next question is a follow up question by Amloda from Sanmati Consultant. You may proceed.
AM Lodha
Hello sir, I have got one is relating to your maintenance shutdown for mcl which happens to be. And every two years when it is the next user. No.
Ashwin Devineni
So we have our, you know we have two shutdowns annually. So we have. We take one half yearly which span across 15 days per unit and then we have a major shutdown which spans once every four years. And that shutdown we are probably going to be taking during the early part of 20. 27.
AM Lodha
27. Okay. The second question is other income in Eastern alone has jumped from 79 crore to 188 crore. What is the. What is the component has increased by 100 crore. Other income in stand alone business jumped from 79 crore to 188 crore. So they almost jump of 100, 110 crore. Yeah.
Ashwin Devineni
In standalone other income also constitutes the dividend from the subsidiary. So like in the last financial year we have received dividend from two subsidiaries. So for standalone it is shown as other income. Those two dividends together put together is 110.
AM Lodha
Okay sir, thank you.
operator
Thank you. The next question is from the line of Radha from PNK securities. You may proceed. Hello sir.
Radha Agarwalla
Thank you for the opportunity. I wanted to thank you for the buyback and high dividend payment. My first question was, until the commissioning of phase two of Zambia which is expected to be in first half of FY27, is there any incremental earnings growth. Driver for the company? As tax also is expected to increase to 15% because of the expiry of tax holiday. Hence, wanted to know your thoughts on the earnings growth for the near term.
Nikhil Devineni
No. Just to clarify, on the tax holiday, we also mentioned this previously in the call. The tax holiday will continue till end of financial year 26. Post which we will get into the second slab of 50% exemption for the next three years.
Radha Agarwalla
So FY26 10 it will continue then FY27 like you had previously mentioned, first two years, 75% examination.
Nikhil Devineni
Yeah. From FY27 onward, it will be 50% exact for three years.
Radha Agarwalla
Okay. Okay. So from FX. Okay. And a bit more on the earnings root driver for the near term.
Ashwin Devineni
Yeah. I think from the standalone level, in terms of ferroids division, we foresee a better scenario for FY26 than for FY25. Mainly because we are seeing that the product diversification into ferrosilicon is helping out as the demand in the US particularly is increasing. And moreover, our dependence on the Japanese market has increased over the course of FY26, which provides a reasonably better margin than say domestic sales or export to any other country. So on these two counts, we foresee that the federalized division is more encouraging for FY26 now coming to the power sector too. As I mentioned earlier, I think Most of about 60% of our power capacity is already committed up until till September through the short term bilateral contracts.
The remaining 40% also has been committed until July. So we have some good visibility in that sense. Besides that, in terms of reducing our cost of generation, which allows us to participate more in these centers, we have done a diversification of coal procurement from what was existing to many other sources, which has reduced the net fuel cost. And furthermore, to add to that, I think you all must be aware that the final approval for Orissa to convert the 60 megawatt CPP into IPP has just come through. This would enable that particular unit to run at a much higher PLs than we’ve seen in the last year.
So all these things put together, we see an encouraging sight in terms of FY26.
Radha Agarwalla
Sir, just a bit on the Federalized division. In the previous call you had mentioned that you have low cost inventory that. Will last till September 2025. So on the basis of that, since. The finance product prices are increasing, so. I had assumed that the spreads would have improved in this quarter and I expected a sharp jump on a Q OQ basis in terms of EBIT for the federalized division which did not happen. So please give us some understanding as to how to see these numbers. And from the volume perspective, how much. Growth are you expecting from the Ferrule oyster division in FY26?
Ashwin Devineni
You see I can’t. The market for Ferros is an extremely volatile one. So I can’t put an exact number in terms of what the growth prospects are. But as you rightly pointed out, we are sitting on fairly low cost inventory compared to where the market is today. That is definitely providing us with some cushion despite falling prices. But like I said, our main. Right now our main focus is not in terms of domestic sales where there’s a lot of supply overhang but we are focusing more in terms of niche products in markets like Japanese banks where there is a reasonable margin to be made.
operator
Okay sir, sorry to interrupt. Mr. We may request you to the return to the question queue again for your follow up question as there are several other participants waiting for your turn.
Radha Agarwalla
Thank you sir.
operator
Thank you. Thank you. The next question is from the line of Sri Gopal Kankani from SG Kankani & Associates.
Shree Gopal Kankani
Good afternoon. Sir, my question is that in spite of energy revenue operations almost constant in March quarter as compared to December fourth quarter. 24th Quarter the profit has come down from 351 crore to 296 crore in March quarter. What is the main reason? Sir, hello.
Ashwin Devineni
Yeah, we’re getting back to you, just one second.
Ashwin Devineni
Okay,
Nikhil Devineni
so you are referring to the Mamba reduction in profitability.
Shree Gopal Kankani
No, no, no. I am referring to the consolidated financial statements where in the segment revenue. If you see the consolidated account. Consolidated revenue from energy operations is Almost constant in March 25 quarter 834 quarter crores as compared to 833 crores in December 24 quarter. While the energy revenue is the almost same as compared to previous quarter. However the if you see the consolidated financial statements the profit has come down to 296 crore as compared to 351 crore in December quarter. So what is the major reason for decline in profitability in spite of energy operations revenue almost same at consolidated level.
Ashwin Devineni
If you see the slight drift that we have quarter on quarter that is mainly due to our Mel plant being on a shutdown. So that’s the reason why the revenue quarter on quarter has also dropped by close to $10 million.
Shree Gopal Kankani
No, no sir, the revenue is almost at the same level in December 24th it was 833 crores. And in March 25th it is 834 crores. However there is significant decline in the profitability. And my second question is one more question. That in if you see the cash flow from investing activity an amount of rupees 1325 crores is towards investments made during the year. And if you see the capital working progress there is increase of just around 475 crores. So where the balance amount has been deployed? Sir, actually could I repeat again? Yes, yes. I am repeating.
If you see the cash flow from investing activities it shows that an amount of rupees 1325 crore had been deployed towards investment made during the year 2425. But if you see the capital working progress there is increase of around the 475 crore only during the year. So when you have invested around 1,325 crore but the amount has been deployed towards capital working progress is only. Increased amount is 475 crores only. So I think when you have shown investments apart from capital working progress is there any other investments also made during the year?
Ashwin Devineni
Sir, so the other investments are mainly in the form of investment. So anything which is more than one year in terms of the maturity it goes into the investment category. So the part of it is the capital work in progress. The other part is in the long term investment.
Shree Gopal Kankani
Okay. So yes, I wanted to know what are the other long term investments. Because 1325 is the investments. And out of this 1325 only around 475 has been deployed in capital progress. Perhaps this expansion of power plant. So where other investments made? Sir, actually.
Nikhil Devineni
So these are investment in bonds and other.
Shree Gopal Kankani
Okay, okay. Okay. Okay. I. I am waiting for my. Your reply, sir, to my first question regarding declining profitability. Mark squad, in spite of energy operations almost at the constant level.
Ashwin Devineni
Yeah, we’ll get back to you. We’ll get back to you. We’ll take the next question.
Shree Gopal Kankani
Okay, sir. Okay, sir.
operator
Thank you. The next question is a follow up question from Mr. Viraj Mahadevia from Moneygroup.
Viraj Mahadevia
Sorry, nothing from my side. I’m good. Thank you.
operator
The next. Before we take the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference please limit your questions to two per participant.
Ashwin Devineni
Just a follow up on the previous participant. He had asked about the. Mr. Kankana. Yeah. Mr. Kankani had asked about the drop in profit from the energy segment. Though the revenue is same. So from a revenue perspective, as I mentioned The Mel revenue has dropped quarter on quarter where it has been made up by the other energy generating units here in India. Net, net the revenue is stable quarter on quarter. But when it goes to profitability, the profitability of Mamba is much higher than the ones in India and therefore there is a drop in the profitability from the quarter on quarter perspective.
operator
Thank you. The next question is from the line of Faisal Hawa from Edgy Hawa. You may proceed.
Faisal Hawa
Sir, there was an announcement that we are going getting into lithium ion mining also in one of the African countries. Is there any progress on that and would it make a material difference to the balance sheet and the profit and loss of the company in future?
Ashwin Devineni
No. So we basically are exploring lithium concessions that we have been granted. We, meaning Mel has been granted. We have about 11,000 hectares that’s been granted. So exploration activities for lithium is currently underway. So it’s at a very early stage right now to finalize any plans, future plan in terms of what our involvement would be.
Faisal Hawa
So which country is this in?
Ashwin Devineni
Zambia. Zambia, the subsidiary of Mamba.
Faisal Hawa
So is there a fair chance that there could be a good amount of lithium in that area?
Ashwin Devineni
I wish I could answer that. If I could answer that, we wouldn’t need to do any exploration activities. So the whole point of exploring is to figure out what the quality of the lithium in the concession is and if it’s commercially viable to mine.
Faisal Hawa
And sir, with the cost of solar falling so dramatically, are any of these African governments also encouraging you to put up solar plants and successfully giving them the power?
Ashwin Devineni
Yeah. So I mean the current initiative we’ve taken, which is the 100 megawatt solar plant, was encouraged by the government and hence we closed the power purchase agreement also at an attractive tariff. So there is encouragement from Zambia and other African countries for companies to put up solar plants.
Faisal Hawa
If you could give some kind of a vision for the next two to three years. So where do we see our revenue and profitability for the next three to four years and particularly in light of the recent buyback that we did in and absolutely adverse market conditions, which I would really congratulate the management. We were amongst only two or three companies which did buy back during that time. So how do you see the next two to three years panning out in terms of revenue and profitability?
Ashwin Devineni
Well, I think we currently have a very strong ongoing operational base, both standalone and international. So I think we will see all the current operating assets that we have performing well in the next two, three years. Apart from that, I think you would start seeing some added revenue from the projects that are currently underway, which the solar. We look, we’re looking at commissioning by July 2026. The expansion of 300 megawatts. We’re looking at commissioning in August 2026. And you know, your agri, as your avocado will start generating some revenue at least end of this year.
And also we see some progress taking place on the Ivory coast level. So I think with all these in the next two to three years, yeah, the future looks good.
Faisal Hawa
Thanks a lot. I appreciate answering my questions.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Anand from cil. You may proceed.
Anand Raj Singh
Hello, sir. Thank you for taking my question again. There’s a target that you have put like, you know, in one of the presentations I was reading that we are going to increase external sales of coal mine from 40,000 tons in 12 to 15 months. So what kind of sale, like you know, are we targeting and the capacity of the mine, sir. And will this mine be able to suffice a coal requirement for phase two of the power plant?
Ashwin Devineni
Yeah. So in terms of supplying coal for phase two, definitely. Because we wouldn’t have started with the phase two project if we didn’t have the coal or the fuel security. We have ample. We have a very large concession area. We have ample coal for both phase one, phase two, possibly even phase three. And any amount of outside sales. With regards to any specific target for external sales, we are essentially targeting about 35,000 tonnes on a monthly basis. Today we have other competing coal mines. So there are challenges that are involved. But as far as our external sales are concerned, we are doing fairly well.
But if you look at a target, it’s about 35,000 to 40,000 per month.
Anand Raj Singh
Okay. Okay, sir. And so you know, you talked about converting your power plants to ipp. Will that not reduce the alloy production? You know, because you are converting your power to selling it to the grid?
Ashwin Devineni
It won’t. Because right now in ORISSA we have two furnaces which require a maximum of about 30 megawatts. So that will remain intact. The additional 60, which is also under captive right now is now being transferred to ipt. So there won’t be any change to the Ferro operations.
Anand Raj Singh
Okay. Okay. Thank you, sir. Thank you.
operator
Thank you. The next question is from the line of Radha from BNK securities. You may proceed.
Radha Agarwalla
Hi. Thanks again. So for the 100 megawatt of solar plant in Zambia. Could you highlight whether the terms and conditions will be similar to the second phase two of Zambia power plant and. Whether any tax benefits will be there? When will it be commissioned and what is the expected PLF in this plant?
Ashwin Devineni
Yeah, so I mean in terms of the commissioning of the plant and all, I think I repeated myself multiple times during this call. We’re going to be commissioning in July 2020. I mean we’re planning on the date is July 2026. This is a solar plant and you know, the other plant is a coal plant. So there are certain similarities and there are certain differences as the terms and conditions that we negotiate with the government.
Radha Agarwalla
Pls. Sir, Sorry pls, what PLS are you expecting from solar plant?
Ashwin Devineni
It’s too early to say right now. We’ve not narrowed down on the panel manufacturers that’s currently underway and under discussions in the EPC but I think the PLS we are targeting is about 20 to 22%.
Radha Agarwalla
Secondly currently we have a net of about 580 crores. So what is the peak debt that. We are expecting considering the future CAPEX plan? And overall what is the CapEx if you could highlight for the next two to three years.
Nikhil Devineni
Sorry, can you repeat your question please? Is it about capex plan?
Radha Agarwalla
Yeah, yeah. Yes sir. Yes sir. What is the peak debt that you’re expecting for the next two, three years. And what is the per year CAPEX. Plan for the same.
Nikhil Devineni
So sitting and maintenance CAPEX is generally around $25 million per year and these are consolidated numbers results only.
operator
Ladies and gentlemen, the management’s line got disconnected. We’ll connect them. Ladies and gentlemen, we have the management on the line again. Hello. So.
Ashwin Devineni
Yeah, we can hear you.
Radha Agarwalla
Yes sir, you were telling about the. Maintenance status being 25 million dollar per year.
Nikhil Devineni
Yeah, that’s right.
Radha Agarwalla
Yes, I had asked about peak debt and CapEx plan for the next two, three years.
Nikhil Devineni
So this is the CAPEX plan for the next. This is the maintenance CapEx that we have and we also have the expansion projects which have been explained during the course of the call.
Radha Agarwalla
And what is the peak debt you are expecting for. Sorry, peak debt to fund the CAPEX
Nikhil Devineni
debt should be around. Yeah, 250 to 300 million dollar. Taking all the expansion projects together.
operator
Thank you. Due to time constraint. That was the last question. I now hand the conference over to the management for closing comments.
Ashwin Devineni
As we conclude, I would like to reiterate that Nawala Mitchid remains focused on maintaining operational excellence, delivering value to our shareholders. We are optimistic about our future growth prospects and will continue to strengthen our position in our key business sectors. Thank you for your time today and we look forward to to your continued support.
operator
Thank you. On behalf of ICICI securities limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.