Sarda Energy & Minerals Limited (NSE: SARDAEN) Q4 2025 Earnings Call dated May. 27, 2025
Corporate Participants:
Unidentified Speaker
Pankaj Sarda — Managing Director
Nilay Joshi — Head of Corporate Finance
Analysts:
Unidentified Participant
Ankit Jain — Analyst
Marshal — Analyst
Rajesh Bhandari — Analyst
Rakesh Roy — Analyst
Bharat Phatak — Analyst
Vedant Sarda — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4NFY25 earnings conference call for SADA Energy and Minerals 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 by pressing Star then zero on a Touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Ankit from Stellar Investor Relations. Thank you. And over to you, sir.
Ankit Jain — Analyst
Thank you. Good evening everyone and thank you for joining us today to discuss Q4 and FY25 business performance. We have with us the senior management team of Sada Energy and minerals represented by Mr. Pankat Sada, Managing Director and Mr. Nile Joshi, Executive Director. Before we proceed with this call, I would like to mention that some of the statements made in today’s call may be forward looking in nature and may involve risks and uncertainties. The company also undertakes no obligation to update any forward looking statements to reflect developments that occur after the statement is made. Documents relating to the company’s financial performance, including investor presentation, have been uploaded on the Stock Exchange and company website.
I now hand over the conference to Mr. Pankat Sada and then we will open the floor for Q and A. Thank you. And over to you, sir.
Pankaj Sarda — Managing Director
Thank you. Good afternoon, ladies and gentlemen. Welcome to SADA Energy’s Q4FY25 earnings call. Macroeconomic Overview the reciprocal tariff imposed by the USA has disrupted global trade and fostered a shift towards protectionism. While the full impact is yet to be realized, India remains relatively well positioned due to strong domestic demand, a growing manufacturing base and the increasing focus of developed economies on diversifying supply chains. However, the dumping of goods from countries with which we have free trade agreements continue to pose challenges. The government remains vigilant and responsive with policy actions. The safeguard duty imposed on certain steel products in April has effectively curtailed cheap imports.
India’s fiscal deficit is projected to decline to 4.4% in FY26, down from an estimated 4.8% in FY25. The RBI has infused liquidity into the banking system to ease interest rates, recently reducing the repo rate by another 0.25% inflation data suggests a continued easing trend. Banks have reduced deposit rates and loan interest rates are expected to follow, which should bolster consumption and capital expenditure. Operational Performance FY25 was a landmark year in our growth journey marked by the successful acquisition and integration of SKS Power Generation Chhattisgal Ltd. We achieved record high production across coal, iron ore. PELV from the newly acquired IPP hydropower Generation grew by 5% YoY supported by a strong monsoon.
The IPP thermal power plant delivered significantly improved performance, achieving a plant load Factor PLF of 80.42% in Q4 despite a fire incident that shut down one unit for 27 days and 73.32% for the full year, up from 56% in FY24. Continuing operational efficiency measures played a key role in this improvement. Temporary shutdowns at our steel plant and one Ferrule oil furnace for modifications led to a dip in production of metal products for the quarter. Our multi pronged strategy to reduce carbon footprints includes the adoption of solar power, the replacement of diesel vehicles with electric ones and the successful registration of our waste heat recovery project with IRAC for carbon credits expansion and project updates.
Coal Mines Gare Palma 4×7 Final approval for increasing mining capacity from 1.68 million ton to 1.8 million ton is expected in this quarter. Garipalma 4×5 Revised Block Boundaries requires fresh approval been granted 57 months to commence production. Shapur West Coal Mine Mine opening Permission was received on 10th of March 2025. Mine development work has commenced and production is expected before the end of the next financial year. Bartunga Hill JV coal mine, DPR and mining plants have been submitted to SECL and are under forest land diversion. Approval is underway. Power plants Rehar Hydropower Project 25 megawatt the trial run of the plant is complete.
Commercial operations will commence when water flow improves. The PPA is expected to be finalized this quarter. Kotay Vera hydropower project 25 megawatt the project is in the approval stage with work expected to begin by mid FY26. Two additional small hydropower projects are in varying stages of approval. Captive solar plant execution is delayed due to the issues at the end of the EPC contractor that is gensol. Most equipments have been delivered and transmission line working is ongoing. Project project commissioning is expected in current financial year. 30 megawatt TG set replacement work is on schedule with operations expected to begin by mid FY27. Mineral Wool Project operations commenced on 28 March 2025 Market response to the product has been positive. I would now hand over to Mr. Nilai Joshi to discuss financial performance.
Nilay Joshi — Head of Corporate Finance
Thank you. Pankit Veer Financial performance For the quarter FY25 and full year financial year 25 in Q4 FY25 the company achieved consolidated revenue of Rupees 1239 crore registering a growth of 39% YoY. However, revenue declined quarter on quarter by 6% due to the seasonal effect in the hydropower business. Lower power sale realization and shutdown of the steel and Ferro alloys plant for modifications, revenue grew by 20% YoY. Profitability despite challenges in the steel and Ferrero segment due to a downturn in prices, operating EBITDA for The quarter increased YoY from 162 crores to 273 crores and consolidated profit after tax grew 14% YoY to 100 crores.
Operating EBITDA for the full year grew 56% to 1247 crore and PAT grew 34% to 702 crores. One noteworthy observation is that the energy vertical between hydropower and thermal power it has already contributed almost 50% of EBIT earnings before interest and tax in FY25 and this contribution is expected to increase further in FY26 with the full year of operation of the 600 megawatt thermal power plant and the improving PLF debt and liquidity. Net consolidated debt including working capital loans stood below 1600 crores less than 600 crores. Long term loans repayable within the next year amount to rupees 235 crores.
Liquidity remains strong on the balance sheet with cash and liquid investment exceeding 1250 crore which is in addition to loans given as part of treasury investments. I now hand over back to Mr. Pankaj Sarda to discuss the steel and ferrol oil industry overview and outlook. Over to Pankaji.
Pankaj Sarda — Managing Director
Thank you Nileji. Industry Overview In FY25, global steel production declined by over 3% to 1839 million ton with China down by 0.6%. India bugged the trend with a 5.6% increase producing 152 million tonnes. Domestic finished steel demand also grew by 12%. Despite strong demand, steel prices declined due to increased imports and reduced exports. Net steel imports rose to 4.2 million tonnes up from 1.1 million tonnes in FY24. Domestic crude steel production in Q4 FY25 was 40.1 million tonnes up 7% and 4% QoQ. Finnish steel consumption rose by 3% QoQ to 40.3 million tonnes. China’s steel exports remained high despite reduced production driven by weaker domestic demand.
Q4 FY25 exports increased by 6.3% to 27.429 million tonnes. Many countries have introduced safeguard measures against cheaper Chinese steel imports. Indian coal production crossed 1 billion tonnes in FY25, growing by 5%. Coal imports fell by 9% saving USD 6.93 billion in forex. The Indian coal index declined by 14.56% and coking coal prices also softened, partly offsetting margin compression. The central government has introduced incentives for underground mining including upfront fee waivers, reduced performance guarantees and lower minimum bid prices. Ferro Loy’s exports dropped to 1,6000 metric ton from 1,15,000 metric ton due to lower production. Exchange power prices fell by 17% in FY25 to Rs.
4.31 from Rupees 5.17 in FY24 and declined by 10% YoY in Q4. Outlook. RBI’s liquidity measures and government spending are expected to support economic growth and credit expansions. China’s recent cut in the reserve requirement ratio has released $138.6 billion into global markets. Safeguard measures taken by India should improve margins in the domestic steel industry. India continues to be the fastest growing major economy driven by robust domestic demand demographics. A reversal in the interest rate cycle will enhance competitiveness and spur capital investments, boosting demand for steel and other metals. Full year of operation for the 600 megawatt thermal power plant.
Improved PLF, better realization in the IPP business and lower finance costs are expected to further strengthen profitability. That concludes our performance and outlook. 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 CHAR and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press char. Two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Marcel, an individual investor. Please go ahead.
Marshal
Yeah, my this reaction is there because you know now we have got this thermal power plant of 600 megawatt and our existing hydro are very small capacity like 130 megawatt in 60 minutes 2030 megawatt something else. And moreover these hydro are seasonal like they basically operate at a good speed only in the in the Q2 of the FI and the first quarter you can say of the model capacity. But unfortunately we have seen that in the segment reporting you have put only one power. So I encourage and request that this should be divided. This segment should be divided in two parts.
Number one should be thermal power and number two will be hydro. Or you can say yeah hydropower so that. So that the results are comparable. Now for example in the. In the Q4 results just announced our Sikkim power plant is almost closed. But but we see still good profitability coming in power because of the thermal power plant. So. So this is distorting the result. So please like going forward kindly have a two separate segment One for the thermal power, one for the hydropower.
Nilay Joshi
Okay sir, we look into that. Still if you want to get some idea you refer to slide number five of the investor presentation where you will get on on the hydropower the revenue and EBITDA margin details.
Marshal
But I take a suggestion but I’d like we can refer that I I already made like I even saw this for example last year that. That what was there for example in the Q4 what was the hydropower. It was. It’s a miniscule. So I could get some idea. But again you know this. The profitability is much higher in hydro is compared to thermal because because robot is almost three there. So whatever we like from the sale only we cannot see this profitability. So so that’s why you can see. Yeah. Thank you. And and second thing that like where do we stand in terms of for example another appeal going to Supreme Court.
Like like what is the life for example. It’s a. It’s likely result. Like are you anticipating number two, where do we stand in terms of the expansion of the another 600 megawatt of this escape power?
Nilay Joshi
Can you repeat your question? We couldn’t get your question.
Marshal
Yeah, my My first question is that since you have taken over this SK power but in the note it is also mentioned that this. This unsuccessful bidders have have filed appeal in the Supreme Court. So when they. So. So what is the current status of that and what is your like management confidence?
Pankaj Sarda
The matter is subsidized and the next hearing is coming in the next next month end.
Marshal
So like that is going to the first hearing or already few hearings have have.
Nilay Joshi
So I’ll just clarify. The matter is in the Supreme Court. It is sub judious. It has been in the Supreme Court. It has been ongoing for some time now and the next thing is tomorrow but it is a vacation bench. Let’s see what happens. The matter is. I mean whenever it will be heard as far I mean the Supreme Court.
Marshal
That’S okay, let’s understand. And sir, where do we stand in terms of the like of the next extension of this power plant another 600 megawatt for which we said okay that we already have this utility ready.
Pankaj Sarda
Sir, the regarding the next power plant expansion in SKS power. So we had an environment clearing but it has not there because it has. It has lapsed. So we have to again redo the public hearing and things like that. Our team is gearing it up and in coming one year or one and a half years we’ll have all the clearances in place and then we can start this.
Marshal
Okay sir, my last question that regarding this our. Our captive mining whatever coal or we have. So like did we now. Now we have reached this optimal like structure or like what other. For example they say valuation is going to yet to be made which. Which can push up our ebitda.
Nilay Joshi
I’ll just make a correction. So we run commercial mines mind. The commercial mind except for the four mind which is a capital mine. All the other commercial mind which means there’s no restriction on the end use of the mineral and details. If you refer to the presentation you will get the current status of each and every mine. Okay, come on board.
Marshal
Okay, sir. Okay, thank you.
Nilay Joshi
I’ll just tell you, you can refer to slide number 21 and 22 and that will give you a clear idea as to what are the levers of growth in mining and what is happening in each and every mind.
Marshal
Okay, I can see that like you also did this representation today. No problem, I’ll go through it. Yeah. If I have any question, I’ll come back on the queue. Thank you. Thank you.
Pankaj Sarda
Thank you.
operator
Thank you. The next question is from the line of Rajesh Pandari from Nakoda Engineers. Please go ahead.
Rajesh Bhandari
Yeah, good evening sir. I. I just wanted to know what is the basic reason that this quarter the results were not that good normally otherwise Sada results are quarter to quarter. Very good. What is the basic reason, sir?
Nilay Joshi
No, no sir. One is the results. I think the couple of things that you. I think should look at the results. 2 I think the results are excellent. If you look you. One, you should look at the cash profit. Okay. Because there is a different tech component to look at the cash profit that will. That is also disclosed in the presentation. That is. That is one thing. Then if you look at the revenue growth and the EBITDA growth yoy you will get a very good idea as to. I mean It’s a significant growth. 39% growth YoY and 62% growth in EBITDA.
I mean in both for the quarter and if you look at the for the year there’s a 44% growth in EBITDA. So numbers are. I think numbers are quite good. The only reason I mean there are few reasons that will make the numbers even better which I mean one is that the ongoing post acquisition destabilization efforts at SKS are on which means the PLF will keep on improving from here. Also the results only include partial like 7 months less than 7 month type of result for SKS. So all that will improve the results further. But I think the results are I mean if you can see any weakness you can find point out but normally I would say the numbers both on cost I mean revenue growth or EBITDA growth or cash profit that’s quite good.
The they cannot be like or like comparison because you have hydropower in quotability.
Rajesh Bhandari
And sir normally, normally what is the plf?
Nilay Joshi
We already speed left all the the average PLA for FY25 has been 73% but in the fourth that is already mentioned in the call address but in the fourth quarter the because of the efforts that we have put in the PLF group to 80% you know and we see an improving trajectory for the PLF we don’t want to put a number to it but we see an improving trajectory to the PLF going forward. You know if you see and look at the slide number five so I sorry slide number six. So you will see that April 96 PLF and the plan secured six position in the All India PLF rankings of CAT.
So so things are improving and clearly it’s in the right direction. You know.
Rajesh Bhandari
Demand and price. Can we expect any improvement? Hello.
Nilay Joshi
Yeah. Yeah. Ferro alloy is demand and price feral. Is pricing wise we will see probably a 5% depression mainly but this is going to be mainly caused by the reduction of the ore prices more than anything else demand wise demand. We think domestic demand is going to be quite good. Strong export demand is going to be a little stressed because of these tariff issues and safeguard investigations everything going on all over the world. So there is a little unpredictability about the export demand scenario. It is. It is a little tough.
Rajesh Bhandari
So export demand. [Foreign Speech]
Nilay Joshi
No the domestic profitability is quite good because you know in the domestic we use a less costly ore. Right. The grades are quite different and when we are seeing good support from the domestic demand is pretty strong. And the second factor is helping us in our area is that a lot of plants are facing an increased energy Cost especially area where DVC has increased the power rate by about 1 rupee 20 paisa. Finally after a long time significant about 30% of India feral oil production happens in that belt.
Rajesh Bhandari
Yeah, yeah.
Nilay Joshi
So that’s about 4,000 5,000 rupees where production cost has increased. You know so that even if there is a some demand weakness that puts a cap of how much they can reduce the price pretty operating at a very. These profitability levels are quite historically on the lower side at the moment. So there’s a limit beyond we can go lower pricing wise.
Rajesh Bhandari
But our profitability will be then comparatively better because of the availability of the power at a cheaper rate.
Nilay Joshi
Yes sir. Meaning Definitely. And if you see across the industry we are on the top 25, 25% in the costing wise for the power cost of plants which are. You know having some abnormal power rate which are remaining. All are seven rupees six hundred fifty seven. Because some are paying around six rupees or there is a default element to it. Right. Have a subsidy which is not sustainable. So we don’t see major price depression happening at the moment. Demand, it’s not so strong that we have to admit. But then a lot of capacity is also getting cut systematically as the higher price.
You know people are using higher price elixir just closing production.
Rajesh Bhandari
[Foreign Speech]
Nilay Joshi
No that keep that.
Pankaj Sarda
I mean that keeps on changing. Because raw material use and the power that you get definitely captive. Definitely pricing may advantage. So
Rajesh Bhandari
Does this percent advantage [Foreign Speech].
Nilay Joshi
[Foreign Speech] But yes, our costs are very very competitive.
Rajesh Bhandari
Take all the best for the future. Sir.
Nilay Joshi
Thank you.
Pankaj Sarda
Thank you.
Rajesh Bhandari
Thank you sir.
operator
Thank you. Participants who wish to ask questions may please press Sharon 1 at this time. The next question is from the line of Rakesh Roy from boring AMC Omkar Capital. Please go ahead.
Rakesh Roy
Hi sir. My first question regarding. Sir, if you see our steel volume. Our steel volume is down nearby 11%. Nearby 13%. Sorry, 13% is only yourself. Any reason? Any reason demand is slow or anything else?
Pankaj Sarda
Rakeshi, there are 23 things I’ve covered in my concol address. Also that we had taken some breakdown corrections in our plant. So we had stopped our plant for 30 days 30 to 45 days for further improvement in the plant. One is that second is intermittently when the power rates in the grid is higher we tend to stop our productions. And because better realization and giving power to is. So we reduce our production there and we sell power in the grid.
Rakesh Roy
Okay, okay. But sorry you sell the power to the grid. If you see your power realization for this quarter is there by 65050 paisa. If I’m right, compared to last quarter is a 6 rupee 64 pesos.
Nilay Joshi
No, which see in quarter four the realizations were weaker. Now it is in the first quarter it has gone up.
Rakesh Roy
Okay, so first in the first quarter. But that’s why I’m saying Q4. You as you say, due to the higher realization you make sell to the power to the grid. That’s why the production is down.
Nilay Joshi
But as you said, main reason, if you see, if you refer to our on call address also the main reason is because the plant was not doing certain modifications for better quality and efficiency. And all of that which you will see in better results going forward. The plant was under maintenance and improvement for more than a month. You know, different units were under different days of closure. So that is the reason, main reason. And of course yes, we have sold certain part to the IX and all. So it. That depends on the time. Might have been lesser, but certain times.
So that way, I mean you have to work out the economic.
Rakesh Roy
Okay. Okay, next question is any guidelines for FY26 in term of volume? For this was steel and power for 26 and 10 to 7.
Nilay Joshi
Normally we. We don’t give forward guidance, you know. But I mean we have taken modifications and we expect things to be. Because the plant was not. It will now be operational and. And with a better efficiency. So things should be better. But in terms of numbers we don’t. Don’t give forward looking guidance.
Rakesh Roy
No, no, I am not asking term of number. I’m telling you in terms of percentage.5%, 10% from here. For, for FY25. Like this type in term of volume.
Pankaj Sarda
Commodity prices. You can not predict what. How the commodity price.
Rakesh Roy
I’m just saying if. If prices remain same, could your prices remain like for whole year? So how much volume you are expecting?
Nilay Joshi
See, the logical is that it should come back to the regular levels of production. The production will come back to the normal levels which was there in FY24 and maybe improve a little bit because of the modifications. We. But then beyond that saying anything will be very difficult because you know, it’s a very volatile market. Prices you don’t know in commodity to put up. That is very difficult.
Rakesh Roy
Okay, my second, second question is. Are you see any margin improvement from here? Because coal prices is down. And if you see margin improvement from Q1 or Q2 from here onwards.
Nilay Joshi
So power definitely will. I think Q1. I mean compared to Q4 things will be. I mean normally thermal power Q1 is the best quarter, you know.
Rakesh Roy
Okay. So we see the margin will improve from concern versus margin will be improve in Q1 compared to Q4.
Pankaj Sarda
Very hard to say. For commodity prices it’s very hard to say that. But there are raw material prices are also going down as well as the finished prices are also going down. But there is a lag when the finished product prices go down because after generally the raw material prices go down later. But we can see the trend at the raw material prices and finished prices going little bit down from there.
Rakesh Roy
Okay. Okay. Last question is any chance to the next two, three years you will hive off your power business because the power revenue is nearby. Nearby 45 of total value nearby after SKS. So any chance in next are you planning to hive up this power business to separate company and like this any plan?
Pankaj Sarda
No plan.
Nilay Joshi
The name of the companies are the Energy and Windows Center. You know.
Rakesh Roy
Okay.
Nilay Joshi
Right. It begins with energy and energy as I said in the opening remark. Also energy is going to become more and more prominent. That is the clear guidance that we can give you. That energy vertical is going to become more and more prominent in terms of contribution to both top line and bottom line. If you see side number five of the presentation already contribution of the energy is almost 50%.
Rakesh Roy
Exactly.
Nilay Joshi
Go up significantly because of various reasons which are already captured in that slide, you know.
Rakesh Roy
Yes.
Nilay Joshi
So the energy vertical for Sarda Energy and minerals is going to become more and more prominent and the name itself is energy. So you know.
Rakesh Roy
Okay, sir. Okay. Thank you sir. Thank you. For myself.
Pankaj Sarda
Thank you. Thank you.
operator
Thank you. Participants who wish to ask questions may please press star and one at this time to ask a question. Please press star and one. Now the next question is from the line of Bharat Pathak, an individual investor. Please, please go ahead.
Bharat Phatak
Hello. Hello.
Pankaj Sarda
Hello.
Bharat Phatak
Yeah. Is my voice audible?
Pankaj Sarda
Audible? Audible, yeah.
Bharat Phatak
Thank you sir for giving me this opportunity to ask the question. And first of all, congratulations to the entire team for such phenomenal results.
Pankaj Sarda
Thank you. B.
Bharat Phatak
My question is not actually question. I just wanted to understand. It’s page number 36 that thermal power generation versus sales. So we see that the generation is 3482 million kilowatt hour but the sales is only 2096 million kilowatt hour.
Nilay Joshi
Balance is captive.Consumption
Bharat Phatak
balance is captive. Oh, thank you. Thank you sir. That was my only question.
Nilay Joshi
So we have in thermal power, as you would appreciate, we have two type of assets in thermal power. One is the power plant. The. I mean the IPP where we sell the power to the grid or under PPA or whatever. So where we basically sell the power and the other is the captive power plant. So 160 megawatt, you know, so that those captive power plant we use for internal consumption for manufacturing of steel or ferro. So that is why the difference that you see between the generation and. Okay, I hope that clarified.
Bharat Phatak
Yeah, I understood that part. Just. I mean if you allow me, maybe I can ask one more question.
Nilay Joshi
Please, Please.
Bharat Phatak
Yeah, I was looking at this metals production and change numbers for iron ore pellets and pond, iron seal bed, wire rod, HB wire and feralite. I see that it’s like last four or five years is like completely flat. Maybe at least some 4%, 2.3% minus 2.5% growth, 2.5% growth. So is this like a common trend across industry or like there’s something specific only to our company?
Nilay Joshi
No, you are talking about the. The production numbers. Volume.
Bharat Phatak
Yes, production and sales almost like flat for the last four to five years.
Nilay Joshi
So it is. Sorry, it is like this that production wise. So now, now we have. So on a big picture basis now we have basically three verticals. Energy, minerals and metals. Okay. Metals is our legacy business which is already under optimum utilization or optimum production level. There might be minor delta in production here and there because of some improvement that we do in the plant, etc. But there is no major expansion that we are planning on the metal side. As of now. Largely the expansions that are happening are either on the Mendel side or on the energy side.
As you can see from the revenue growth and EBITDA growth numbers. Also that the growth is coming from energy and minerals. Right, the metal side type of growth or rather the type of improvement that will happen will be either carbon footprint reduction or improving efficiency which includes projects like solar project or the Mendel fiber project that we did recently. So those are things which reduce cost, save cost or. Or improve efficiency or reduce carbon footprint for the company as a whole and make the steel more greener and all of that, you know. So we are not doing any large capacity expansion on the steel side.
Pankaji, you want to add anything to it?
Pankaj Sarda
I totally agree. Strategically we have taken a decision, the group has taken a decision that we would want to grow in energy and minerals direction. And that’s how we have put our capexes in last five years in those areas.
Bharat Phatak
So the EBITDA for this coal based thermal power generation, like you said, like for the hydro thing, it comes around 72% EBITDA margin. Is it something similar for coal or. It is much lower Coal is much lower.
Nilay Joshi
Coal is much hydro because the power there is no cost in hydro. No, the only cost in hydro is during the putting up the capex. Otherwise water is free, you know.
Bharat Phatak
Okay, thank you sir. Thank you for answering the question.
Pankaj Sarda
Thank you.
operator
Thank you. The next question is from the line of Rajesh Pandari from Nakoda Engineers. Please go ahead.
Rajesh Bhandari
Thanks for giving me chance once again sir. In fact. [Foreign Speech] Energy or mineral that is the best thing as a matter of fact because they will be the basic price earner. The demand in India is going to increase every day. [Foreign Speech]
Pankaj Sarda
Now we are putting 150 near Raipur.
Rajesh Bhandari
150 megawatts.
Pankaj Sarda
50. 50 megawatt.
Rajesh Bhandari
50 megawatt. Okay.
Pankaj Sarda
As of now we are putting 50 megawatt and major capexes on solar side. As of now is this much only.
Rajesh Bhandari
Okay. And greenery still get advantage. Milton said price wise any incentive.
Pankaj Sarda
What ji.
Rajesh Bhandari
Greenery still.
Nilay Joshi
No green steel as such. There is no policy of the government at the moment to price it over or give a price incentive. But going forward, you know as a group you are reducing your carbon footprint.
Rajesh Bhandari
Yeah.
Nilay Joshi
Which is important. That is the major. As of now there is a settled norm from the government that they will pay extra for some green steel or something. The technologies which are going to be used in green steel also are still under, you know, steady.
Rajesh Bhandari
Yeah, yeah.
Nilay Joshi
Radical technology like hydrogen or they will do some radical improvement in the current steel making by reducing the amount of the carbon burning or you know, different way of reduction. It’s a technology under transition at the moment. Very difficult to say anything.
Rajesh Bhandari
[Foreign Speech]
Nilay Joshi
Sir. We evaluate opportunities in the verticals that we are focusing on which is energy and minerals. We keep on evaluating opportunities. Our balance sheet is very strong. I think historically the capital allocation that we have done has been very student [Foreign Speech]
Rajesh Bhandari
[Foreign Speech]
Pankaj Sarda
Matter is totally different.
Rajesh Bhandari
Different.
Pankaj Sarda
You cannot compare. Right.
Rajesh Bhandari
Okay sir. Thank you sir. Thank you.
operator
Okay, thank you. The next question is from the line of Marcel and individual investors. Please go ahead.
Marshal
Yeah, I have gone through your sister slides besides two questions. Number one is regarding coal means currently for this SKS power unit how much approximately coal is being consumed and how much coal is and against that how much coal we are utilizing from our capital production and how much we are buying. Number one in the same regard, suppose once we like. Suppose if we just say like spent 1.8 million ton then what will be our cost to production for the coal and currently the coal which we are buying for SKS power it basically are you buying?
Pankaj Sarda
I’ll answer this sir. Every day if the plant is Running at full capacity, we are consuming 10,000 tons of coal depending on the GCB and the ARB generally. I’m just giving you thumb, thumb rule how the consumption is happening. Government comes out with Shakti Coal Linkages. Coal prices are much, much cheaper. So if we are lucky and if we get good pricing and Shakti Coal linkages. We try to take as much as coal from Shakti Coal linkages. And the shortfall is always we have a facility of a coal mine from where we can always utilize our coal.
So our coal mine is as told also in earlier question. It’s a commercial coal mine. So if it is not consumed in our captive power plants or ipp it can be sold in the market as well.
Marshal
That’s very good, sir. Yeah. My second question regarding this. One of the unit was shut down for about a month. So was it properly insured? Did we file a claim on the insurance for this for the shutdown? Because. Because there was filing filing also. So like did we file a claim for the. Like for the. For the loss of profit as well? Because it is. Because this insurance has nowhere been mentioned in the. In the accounts also.
Nilay Joshi
No, no. I’ll just. So you have to appreciate one thing sir. The asset or this plant was taken under ncnp which means it was an NPA and you know, it was. It was basically being. Being. I mean not run as a regular plant. Right. So hence after we came in we are. We have doing regular improvements and you know, things like that. But it takes distressed asset. It takes some time before you can kind of stabilize it properly and you know, take it. I mean make the operations proper and efficient the way you want the regular asset to run.
So you will see in the initial, in a. In a distance asset you will always find these type of challenges and something happens, something missing, you know. So that is where all.
Marshal
No, actually I am not referring to the first shutdown which was the maintenance shutdown which is like normal part and parcel of any plant like. Like from September. That’s fine. I am talking.
Pankaj Sarda
Yes, I’m. I’m happy to share that there was no loss of asset. And our. And I’m very proud of our team who had worked day and night to bring. To bring back the equipment in running condition. But like immediately we could procure them and could import them timely on timely basis or on fast basis. So. The fire was detected very fast and it was quenched almost immediately. Within half an hour everything was over.
Marshal
[Foreign Speech] Due to this consequence, we also lost profit for one month. [Foreign Speech]
Pankaj Sarda
Loss of profit requires a shutdown 45 days or something like that and it didn’t get triggered. It has to be minimum 45 days and it didn’t get triggered.
Marshal
[Foreign Speech]
Nilay Joshi
[Foreign Speech] That’s what I was trying to tell you. Our team has been continuously on the job after the takeover of the assets but any NPA asset is good normally properly agree fully.
Marshal
Agree fully. Agree fully in the same sequence. I want to give you one more valid input here because 45 days for example is the. As our other colleague has mentioned regarding this. Like it is the minimum required for the policy. But so let me tell you those minimum criteria are set by. By different insurer is different and this can be negotiated. So 45 days is a two large period. So I will request that.
Nilay Joshi
Only take your point sir. That is why I said the beginning that there will be gaps in any NPA asset and the team is working to fill those gaps.
Marshal
Can you just give some highlight on this one?
Nilay Joshi
The mineral fiber is basically from waste. We are project has just come online in March. We are. We have started supplying some product in the market and we’ll come back with details as market acceptance and you know. They’Ll pick up one of them.
Marshal
[Foreign Speech]
Nilay Joshi
It’s basically a waste to wealth project.
Marshal
You know how much, how much cap.
Pankaj Sarda
50 tons.
Marshal
How much
Nilay Joshi
capex was 70 cross 70 cr 70 crores of capex.
Marshal
Will it. Will it be break in positive sir or the money is gone.
Nilay Joshi
Sorry sir.
Marshal
Will it be breaking positive in the. In the near future sir we are positive.
Nilay Joshi
We are positive on the product. We have just started supply, we have built a good team and we have just started supply to the market. So that’s why I said we maybe. In the next quarter we’ll comment more on the process. We also are more. I mean the market acceptance and all of that increases. It takes some time to build the market, you know.
Marshal
So we are in that. And sir, one other humble submission and suggestion.
Pankaj Sarda
Sir, there is lot of disturbance from your. I think so you are in some traffic.
Marshal
Hello. Is it okay?
Pankaj Sarda
Better.
Marshal
Hello? Yeah. Yeah. So whatever thing that’s like as you mentioned that we are using 10,000 metric ton of coal per day. So it means there is huge amount of logistic and transportation required for the coal like this moment as well as the ore also. So sir, like I have seen because in my own experience I have seen that like this logistic course for this commodity business like be it cement or steel is very high 30% cost. The logistic cost. So are you 100% taking this transportation on hire or did you also Create your own fleet and transport department.
Because you could save a lot if you do our own captive for example, captive transportation.
Pankaj Sarda
Sir, as of now we don’t have our own fleet. And managing fleets is a different ball game. And you need to have that bandwidth also to handle all the truckers and the drivers and the helpers and the trucks and the maintenance etc. So as of now we don’t have this facility in place. And right now, as Mr. Nulay Joshi discussed first and primary objective of this IPP plant is to run at full capacity and numbers. So we are.
operator
Sorry to interrupt, sir. Sorry to interrupt.
Pankaj Sarda
Yes
operator
Mr. Marshall, I would request you to mute your lines while the management is answering your question. There’s a lot of disturbance from your background.
Marshal
Okay. Okay.
Pankaj Sarda
So that is the idea. So we are focused on improving the PLF of the plant. Maybe in future we can think of that.
Nilay Joshi
Just to add on to what Mr. Sada said, we are from the logistics side, the power plant, the IPP plant already has a running railway siding. Okay. On which the coal delivery happens as on date also. I mean that is the best way of logistics for coal. The. The. Our Sirtala plant also is railway siding. And we are in the process of developing a railway siding at our. At our coal mine. So we see that the best way to transport coal in. In the most cost effective manner is through railways. And we are working already.
Both our major plants are having a railway siding in place. And we are developing a railway siding on our coal mine also. So I think that should largely take care of the logistics of getting the logistics part under control.
Marshal
Sir, I fully agree. Just like because my own experience I’m only sharing with you. I understand that currently our prime focus, our prime objective is to. To maximize the plf. No doubt. I’m not saying to do today but. But what I’m saying since we are also seller for the long term. But I’m saying that for example even if this railway siding is there, if. If the railway siding is coming to the. To the pit or to the head of the plant. It’s fantastic. But again for example this unloading loading is there. I have seen that how the transporter are minting money.
I have seen from my own sir. I have seen that how the transporter have become multi million. Multi million. Multi million. I have seen them growing in the last 30 years. So that’s what I’m saying. Not now means that we can create a separate department or separate profit center. Like be it sufficient admin guy, transfer guy, whosoever. Because since Our volume is too huge. And plus we are more investing in the minerals and the mines. So this requirement is going to more and more and more. Because here sir like the start order a person who buys the truck today within 24 months or like he.
Yeah, he. Yeah. He took become cost of free. So what I’m saying this, this is kind of the delta they are making. So please if we cannot replace 100% for the transport rate 30, 40, 50 we should start like we should make a plan so that next money or two year we can start it. And we are a fund plus company there and like there is no like problem in. In funding those things. But yes I fully agree. Existing manpower of transport department cannot run it. It has to create a separate vertical which itself has to be profit center.
So. So. So definitely it will bring some more profit for the company sir. And like currently it is, you know we think it is a. For example we are taking it granted. But there is a money which can be saved for the company sir.
Pankaj Sarda
So thanks for your suggestion. We’ll look into it. Thank you.
Marshal
Thank you. And so like regarding PPA you mentioned that in the. In the. In the Q4 it was 80.
operator
Mr. Mr. Marcel, sorry to interrupt. Maybe request you to return to the question queue for a follow up question as we have participants waiting in the question queue. Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Vedant Sada from Nirmal Bank Securities Private Limited. Please go ahead.
Vedant Sarda
Thank you for the opportunity. I want to just ask our new capacity of 600 megabyte which is fully operational in the current year, what kind of revenue addition we can expect and a bigger from that project.
Nilay Joshi
So you. You mean the. The sk. The skill.
Vedant Sarda
Yes.
Nilay Joshi
So you can take Maybe I mean 400 crores of saleable units.
Vedant Sarda
400 units.
Nilay Joshi
Crore.
Vedant Sarda
400 crore of revenue?
Nilay Joshi
Yeah. No, no unit.
Pankaj Sarda
Last year we produced around 3,700 million units. So this year our target would be to use 1200 million units. Yeah.
Vedant Sarda
Okay.
operator
Thank you. The next question is from the line of Pranya from Alpha and Vesh. Please go ahead.
Unidentified Speaker
So yeah, just continuing on the last participants question. You mentioned that you’re hoping to produce some 4,000 million units. So what is the price? Average price per unit that you’re expecting?
Nilay Joshi
No, the price.
Unidentified Speaker
Yeah, yeah, yeah. For sure.
Nilay Joshi
We have a PPA in place. But for the balance, you know, it depends on.
Unidentified Speaker
okay. So
Nilay Joshi
But okay. So more broader picture, what we are doing is as a strategy we are trying to tie up a large part of the capacity.
operator
Sorry to interrupt. Mr. Pranay, can I request you to put your lines while the manager is asking, answering your question. Thank you. So you may go ahead.
Nilay Joshi
Yeah, so I was saying that as a strategy, I mean we right now have around 100 megawatt of medium term PPA. And we are trying to basically see that a larger part of the capacities can be tied up into medium term PPAs or long term PPA so that you, I mean you have more stability in terms of price at that point in time. But right now to comment on one single price it will very difficult because short term arrangements on sale of power or on ix, whatever that keeps on varying. You know, it’s a seasonal thing.
Summers you get a very good high price and then rainy season you’ll get a low price. So it changes, you know. So you have to get into long term or medium term PPAs to give a proper price guidance.
Unidentified Speaker
Okay, all right, but can you just give a guidance on what are the current CPAs being done at like the current rate and market like not the exchange rate but PPA rate.
Nilay Joshi
So the existing 100 megawatt is at 5.2.
Unidentified Speaker
Okay. All right. And on average we can assume 5 rupees considering summer and later on less.
Nilay Joshi
I think average 5 between 5 to 6 for the whole year.
Unidentified Speaker
And just one more, one or two. More questions on this side. What is the debt for the how. How long is the expected like of this asset?
Nilay Joshi
I didn’t get the first question. I, I didn’t get the second part of the question. The total funding requirement or the cost of the acquiring the project was 1950 crores. And that was, that was actually funded in a debt to equity of 1730. So around 1380 crores of bank debt is what we had taken and it we are already repayment.
Unidentified Speaker
When we acquired the project like we acquired the company, there was no debt on the company itself. Right. Like on sks.
Nilay Joshi
This acquisition happened under, under ibc where basically. So it had already become npa. Right. The asset was an NPA asset. Okay. So we basically the end. The payout that we made went to financial creditors or operations. So that’s. Yeah. So that debt was settled in that sense.
Unidentified Speaker
Okay. So the company itself is debt free. We have taken some debt to fund the acquisition. 70-30
Nilay Joshi
So now it is merged actually now it is a single entity.
Unidentified Speaker
Yeah, yeah. So the debt is just the one we have. So the like 2000 crores.
Nilay Joshi
The only debt which came with the asset was the one that we raised to fund the acquisition. There was no. With the asset.
Unidentified Speaker
Okay. And the second part of the question was the. What is the expected life of this asset?
Nilay Joshi
You want to answer that?
Pankaj Sarda
It would be around 30 years from now because it has run very little.
Unidentified Speaker
Okay. The usual thermal power plant. Done. 35 years or so I’m assuming. Thank you very much.
operator
Thank you. The next question is from the line of Rajesh Pandari from Nakoda Engineers. Please go ahead.
Rajesh Bhandari
[Foreign Speech] Is it being maintained by still by ntpc?
Pankaj Sarda
No, the. Just within a month after our acquisition we terminated the premature lead, reminded the contract and we are looking after with the existing people only.
Rajesh Bhandari
And oh Sarda. Sarda is in a position to maintain such a big plant. That’s really commendable.
Pankaj Sarda
The result shows.
Rajesh Bhandari
Yeah, yeah, it’s really commendable, sir.
Nilay Joshi
Highly qualified team of people. Very, very senior people from and other other established organizations who have joined us over time. Including. I mean the gentleman Mr. Speaking. He was a very senior executive director with NTPC. So the team is. We have a very strong team in place.
Rajesh Bhandari
[Foreign Speech] Turnover expects [Foreign Speech].
Nilay Joshi
Sir, right now it will be very too early to you know, speak about that. What I said it’s a new product that for us we have introduced in the market. Initial response we have got is positive. But you give us a quarter or two before we can put numbers to it. You know, fiber energy conservation.
Rajesh Bhandari
Is it kind of glass wool.
Pankaj Sarda
[Foreign Speech] Replacement
Rajesh Bhandari
Okay. Okay. Okay, sir. Okay. Okay, sir. Thank you sir. Thank you very much. This is. This was the last question from my side. Thank you sir. Thank you very much.
operator
Thank you. Ladies and gentlemen, in the interest of time we conclude this call and I hand the conference over to the management for closing comments.
Pankaj Sarda
The year gone by breaking year for the company and current year is more exciting. The diversification strategy of the company into energy and minerals has paid off well. The operating performance of IP IPP has shown consistent improvement. The company has been reinvesting surplus funds in a number of diverse projects for long term sustainable growth. Current year performance will have incremental benefit of full year operations of the IPP. Increased production and commissioning of three new projects. That is 25 megawatt Rehar Hydro power project in Chhattisgarh. The mineral wool project Vizag and 50 megawatt solar power project in Chhattisgarh.
Please feel free to reach out to us or our IR team for any further questions. Thank you all.
operator
Thank you. On behalf of Sada Energies and Minerals limited that concludes this conference. Thank you. For joining us. And you may now disconnect your lines.
Pankaj Sarda
Thank you.