Spml Infra Limited (NSE: SPMLINFRA) Q1 2026 Earnings Call dated Aug. 20, 2025
Corporate Participants:
Unidentified Speaker
Manoj Digga — Executive Director Commercial & Chief Financial Officer
Samir Patel — Chief of Technology and Operations, BESS Operations
Vikas Sharma — Vice President, Finance and Accounts
Devyanshi Dave — Investor Relations
Analysts:
Unidentified Participant
Raman Kerti — Analyst
Praveen Yadav — Analyst
Mohammed Afzal Merchant — Analyst
Rajesh Naik — Analyst
Nishita — Analyst
Raj Mantri — Analyst
Tushar Sarda — Analyst
Pratham Modi — Analyst
Presentation:
Devyanshi Dave — Investor Relations
A very good afternoon to everyone and welcome to SPML Infra Limited’s Quarter 1 FY26 earnings conference call. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask a question when the presentation concludes from the senior management. We have with us on the call today Mr. Manoj Tikka, Executive Director and Chief Financial Officer. Mr. Sameer Patel, Chief of Technology and Operations of Bess Operations and Mr. Vikas Sharma, Vice President Finance, Finance and Accounts. Before we begin the earnings call, I would like to mention that some of the statements made during today’s call may be forward looking in nature and hence may involve risks and uncertainties including those related to the future financials and operational performance of the company.
I would now like to hand over the call to Mr. Manoj Tikka for his opening remarks. Thank you. And over to you sir.
Manoj Digga — Executive Director Commercial & Chief Financial Officer
Thanks. Well, good afternoon and welcome to everybody. One welcome to all of you for the Q1 26 earning call of HTML infl we have entered the new fiscal year on a strong footing both operationally and strategically. The momentum built over financial i21 was continuing to this quarter and we are happy with the progress across all education balancing new opportunities. So we are delighted to have Mr. Sanish Patel the chief technology and operating officers of our BSS division. His expertise and leadership will play role in driving SPML next phase of innovation and growth in energy storage system.
India remains one of the world’s fastest growing large economies. Business confidence is improving and cross industries infrastructure development continue to be at the core of India’s long term growth narrative. The government backed multi years project finance for significant investment of 5 water supply and rural and urban household large scale water wastewater treatment facility Smart city infrastructure transition program the water sector growth national mission like the Jivan mission and that aims to provide safe drinking water to all the rural houses. More than 15.64 crore houses already connected with the functional tap water vaccine. The deadline now extended to 2028.
The pan India coverage for business like ours not nearly a policy milestone Crucial long term opportunity along with the Judgment Mission 2.0 Nani Gangi Irrigation program river linking projects including the Index river river diversion KWA Ki Kambal focus on the water Even at moment power sector is also going through a revolutionary chance the government 500 gigawatt of capacity in 2030 hence required strong grid infrastructure and massive energy storage development Renewable penetration rises. The new growth will be for the battery energy storage system growth prospect both in water and for us. Water and power remains two of the most critical pillars of growth.
SPML Infra enters financing at 2026 with a strong operational moment in a strategic direct. With over four decades of experience we are strategically positioned to contribute meaningfully to the national mission. Our expertise in developing large scale water infrastructure plays strong position to support the government push for the universal water access to all. However we saw tonight temporary disturbance related project delay and the hold on Jeval mission extension in 2025. This where time program has since been extended in the union budget. That said, you are now seeing clear sign of recovery from Q2 onwards for financial year 26 has begun a strong note and momentum is visible.
The inflow have also include swimming am to 1.73cr project by Ind Municipal Corporation for the augmentation of the water supply system under the AMRO 2.0 for indoor city. Another order of 3.85cr in project in CH order total order inflow of rupees 40054000 to 5000 coming up in during financial year 2026 our orders stand at around 4500 crore. Personally we are around 2200cr worth of projects by supportive government scheme in an improvement business environment. We expect strong order conversion in Q2 of the current FIN fiscal for the current L1 order trends including current year creating clear visibility for execution and topline growth going ahead, the company will continue to be focused for high margin order now coming to the more sector by the new growth in the form of vessing this early we have made a strategic clear entry into the VESS segment enabling us to win market shares is likely to grow exponentially over the coming decades.
Well with our robust etc. Strength we mocked up relationship with confident to providing plus storage solution scale. This will not only diversify the business beyond tradition EPC also right at the center of India energy transition. We expect strong contribution from this segment starting financial year 27. In the coming years we aim to generate a equal share of turnover from both water and cross segment which are key national focus area. This will also give us a leveraging our immense focus in both the grooming sector of water and power. We already have exclusive partnership with global leaders in energy flowing system.
Energy War required 25 acres land for manufacturing facility Maharashtra which offers incentive for manufacturing unit focused tourism renewable. The plant will be commissioning in two phases 2.5 gigawatt by Q1 financial 5 gigawatt capacity financial 28 is the total investment of around 170 crore for which the company has already generated the liquidity or preferential allotment. This depth of engagement ensure that we can deliver VESS solution at global platforms benchmark from the day one partnership position us with a clear advantage in large EPC vendors enabling localized products master adoption of clean energy infrastructure in India with advanced US Technology collaboration with coming to the financial performance on a standalone basis we recorded a revenue of rupees 172.9 crore and through one financial year 26 as compared to 200.7 crore in Q4 financial year 25.
Our EBITDA has recorded at rupees 21 24.3 crore compared to 22.3 crore last year recorded a PAT of 12.2 cr was compared to 11.8 crore in the last quarter. So for Q1 financial year 26 hour EBITA margin and that margin grew from Last quarter to 100% margin while Q1 performance was softer paired to the last year. It’s important to note for an EPC company like ours in the order book and I am pleased to share our order book continue to grow steadily. Typically Q2 is the quarter impacted by monsoon related slowdown. However this quarter this year certain region exceedingly usually heavy than it’s temporarily affected on execution pace the increasing share of new order in our institutionals.
We accept the improvement team in the margin and the sizable growth in the operation in Q2 onwards. Also like to clarify that the income of rupees 17 crore in our PL commonly relate to the deferred income of rupees 9.034 from the date resolution the company opted for differential is being recognized gain over the repayment period of the day. This gain can be offset against the deferred interest of rupees 8.67 crore in the interest cost other than the other income mainly of interest income. If the company earns in the normal course business from this their margin money to the man for the hiking facing the company is currently that company’s current date stand at approximately rupees 407 crable in six years inclusive of interest which is entirely backed by the arbitration amount amount to rupees 636 crore and additional rupees 4609 crore till day.
Based on the historical trend, the company expect a conversion of claim like worth of around 1500 crore for for all our there is no cash outflow on the companies for debt repayment or interest servicing from the operational cash flow. However, the company has been making additional repayment to N RCL to reduce the outstanding debt date pay. It has 23cr ahead the schedule online. Agree with RCL and plan to continue with this practice in the current year supported by improved liquidity. After receiving investment credit rating of 20 minus we are expecting an improvement credit rating from IA by September October 2025 company has the government mention of 5 more from 1 of the leading national bank ability to take the new business bank guarantees are a critical requirement for bidding the income en government.
We are in the process of further enhancement in the limit to the new business this bank are in processing. The company has focused approach on the water and power segment which is given to people positioning other large PC players. This has been further benefited by the company’s five decade and over 700 project execution track record but with a strong relationship with all customers. The adoption of high technology into the execution gives the company a sizable growth opportunity going forward with this I am I’m opening this forum for any Q A or any guy. I am here for any any question related to finance, anything related to Best Samin is here.
He will. He will also take the question and apply accordingly.
Questions and Answers:
Devyanshi Dave
Thank you sir. Participants who wish to ask a question may please raise their hand using the react button below. I’ll just wait for a few minutes. So we have the first question from Mr. Raman KV. So you may please go ahead. Kindly mention your firm name as well.
Raman Kerti
Hello, can you hear me?
Devyanshi Dave
Yes sir. You’re audible.
Raman Kerti
Hello, I’m Raman. I’m from Sequent Investment. So my first question is I just want to understand what’s the current order book and out of the current order book how much is the legacy book?
Manoj Digga
This new order of 170 crore. The current order book is roughly around 4500cr. We have received four order from Inam. One in Rajasthan, one in Chennai and yesterday in the Indore. This all are roughly around 2500cr. 2000 is the legacy order.
Raman Kerti
2000 will be the legacy order and how much time will it take for us to complete the legacy order book?
Manoj Digga
See order will be completed within two to three years and the new order also take three to four years.
Raman Kerti
So the entire order book will be completed over the period of three years.
Manoj Digga
Three to four years you can take because the last leg and then the commissioning etc needed some time. So all These the current 4,500 crore order book will be completed in four years.
Raman Kerti
And so on that, on that note itself what’s the L1 order book status and what’s the current bid pipeline and how much are you expecting the bit pipeline to be converted into order book?
Manoj Digga
As I told you the water and power both the sectors are very growing. And at the moment we are in the L1 of roughly around 2,200 crore which we are exporting converted into order by Q2 nearly the maximum. By October the entire order will get converted and the new order every year, every month we are bidding. So our target of 4,000 to 5,000 crore orders in India looks to be quite easily activate. Okay.
Raman Kerti
Basically what I wanted to understand was in the previous call you mentioned that there were. There was a slowdown in Q4 but you saw strong growth in terms of bid pipeline in Q1 FY26 which was the current quarter and you were expecting around if I around 2500 crores worth of order which was back then L1 to be converted by Q1 and Q2. So I just want to understand are we still sticking with that or have you reduced that.
Manoj Digga
Out of 3000 crore of order which we talk about the last quarter. 1500 has already been converted.
Raman Kerti
Okay.
Manoj Digga
200Cr of order which is under L1 this L1 I am expecting to be converted by September or maximum by October. So that will make roughly around 151600 cr we got and this 2000 roughly around 20003500 cr order of order we’ll get by October and we are expecting further order of 1500-2000 crore by the next six months. Okay so that is our target of 4000 to 5000 crore order for as I told you in my earlier earlier concord also this company we understood from starts and we have made a policy that we will not rush for the audible.
Although every month there is a order of tender 3000cr but we are targeting selecting order quality where we have made a criteria of funding, criteria of quality of order, criteria of completion of period and the stage where we are want to build and the support of our escrow partner. So those are the criteria we fulfill and the profit margin also. So on that basis we are very selective. So I’m happy that by by those criteria we are meeting 3500 crore hundred we have already won or exceed now balance the next six months. I am very confident to achieve further 1500-2000 crore to make our yearly target of 5000.
Raman Kerti
Okay sir. So my just one follow up question with respect to the yesterday’s order which we put Up. So I just want to understand the order which we received yesterday. Is that also a 10% less margin business? And also I have noticed that there will be a 100220 crores of recurring revenue in terms of ONM. What. What are our margins for O&M?
Manoj Digga
As I told you any order if the company is taking it’s a maximum requirement of more than 20 margin is equal. This order we have much more than 10% market. Less than 10% margin are not. We are. That’s. That’s our selection criteria. At less than 10 margin we are not taking the order. Number two, this order has a two part. One is the ONF. One is the execution of order around 650, 670. This we will complete into the three years. Then there is a operational and maintenance slightly more profitable compared to the execution. So if you see that 12, 13. 12 to 15% is my execution. 15 to 17% is my O&M.
Raman Kerti
Okay. So usually the ONM margins are like more than 10%. Right.
Manoj Digga
Is always high margin.
Raman Kerti
Okay so thank you. I’ll just join back in queue.
Devyanshi Dave
Thank you Mr. Aman. Participants who wish to ask a question may please raise their hand using the react button. We have the next question from Mr. Praveen Yadav. Sir, you may please mention your firm name and go ahead with your question.
Praveen Yadav
Yeah. First of all good afternoon everyone. Am I audible?
Manoj Digga
You are audible.
Praveen Yadav
Oh so so first of all sir, congratulations for good set of numbers. And I have just two questions. One is related to your you know water management business. Another one is with the best. So in water manager business what kind of you know, you know revenue potential you see in a current year as well as what kind of. What sort of operating margin improvement you see as. As you know the margins are hovering in between 5, 6% and all. So that is number one question. Number two question is with regard to BSS. So in basis as you know it’s a big area to tap on and you know there are a lot of players big, small and mid size are you know betting big in bss.
So what is the mode we have here and what kind of you know I mean in the entire value chain what we’re going to do all the all. Although you have mentioned some you know I guess EPC side or. Sorry that conductor side or something. But if you can explain that what you are going to do in basis. Exactly.
Manoj Digga
First let me thank my question and then I, I. Yeah. Basically in the water as I told you there is a mix of old order and new order. Old order. The Margin is roughly around less 2 to 5%. In the new orders we are keeping the order more than see the K3 Kona even to the all the orders are more than 10% margin. The way this VBA will complete the entire old order by, by two to three years. On this new orders will be completed into three to four years. So the, the more we will get, the more contribution of the turnover from the new order.
The margin will keep on increasing. So ultimately maybe after two to three years our, our margin will be around 10% which are the new orders we are thinking. But for the next two years our margin will be a mix of old and new order. So it will range with 7 to 10 now.
Samir Patel
Hi, good morning. So with regards to best, as I understand your question is about more, right? So from that perspective I can say that we have a technological handshake with Energy Gold who is a NASDAQ listed in usa. So we have a proven trial tested sort of solution which is globally deployed across the world. And we have AC block and DC block technologies. So this is the technology we are bringing to India. And I don’t think anyone else in India is doing that. You know, especially on the AC block where it’s like a plug and play sort of technology, you can easily, you know, integrate with the existing systems without incurring any heavy, you know, sort of integration costs.
So that is one thing. From technological standpoint, we have a proven tested sort of solution. Second thing is that we are setting up manufacturing footprint as what Mr. Manoj said within the Pune question. And I expect this to be operational within Q1 next year. So we are in the front run now. Let’s say we are kind of well advanced in terms of manufacturing and developing the ecosystem, you know, from localization perspective. So currently if you see the market synopsis, most of the players are kind of importing an entire gas container mainly from China. So you can say this is more like 90 to 95% of this commodity is actually getting imported.
What SDML is doing different is we are trying to localize this. So this is going to be sort of an input substitute for the entire container. And this, this adds the value to the existing ecosystem. So you’re Talking about roughly 60 to 70% of the commodities, you know, sourced locally within India. So this is the unique, distinct advantage which we are trying to create. I hope that ANSWERS your question.
Devyanshi Dave
Mr. Praveen. Sir, I believe his question was answered.
Samir Patel
Yeah, sure. Thank you. So we can move on.
Devyanshi Dave
So we have the next question from Mr. Merchant. You may please Go ahead sir.
Mohammed Afzal Merchant
Yes. See myself Muhammad Abzal, merchant. My question is related to batteries storage business which we are means establishing. So from what stage we are establishing the business, are we going to import the battery cells or battery cells are also be to be produced in India or from what stage we are planning.
Samir Patel
So if we talk about the supply chain of the west, almost 20% of the commodities, critical commodities will be imported. Right. And cell is one of them. Where from? From a. You know from a technological standpoint, India is not ready to manufacture cells for best. I know that there’s quite a lot of development going on. But even transiting that to maturity will take two to three years. So for. For that time frame we have to source from, you know, from. From China or Indonesia or Malaysia. We have to source that. Once India is ready with making India cells we can easily, you know, swap over and consume that within India.
Mohammed Afzal Merchant
Okay. Second question is that if we are going to import battery cells, do we have any tie up with energy vault in this regard or we are going to China only for inputs.
Manoj Digga
We do have type with energy vaults. For the entire system which gives us the unique advantage of getting across competitiveness. So the cells itself via energy volt handshake will be sourced from China through top three tier supplier.
Mohammed Afzal Merchant
Okay. Okay. So I want to understand that whatever we are talking regarding the revenue 5000 crore revenue will be for the current financial year or next financial year.
Manoj Digga
Yeah. Here I want to add basically the 5,000 crore revenue visibility and possibility of this will be on the 5 gigawatt class. At the moment we are setting up a 2.5 gigawatt. A ramp up will happen in the due course of time. But that the best plant can generate the revenue of 25001 gigawatt is around 1000 crore. So we. We are having setting up point 5 now and increasing it to 5 by 2 next year. By next year will be by 2.5 and next to next year we will be on 5. So that will give the generation revenue ability.
This 5000 crore of the water what we have, it will be executed into three meters to four years. So that’s. That’s the way revenue will be spent.
Mohammed Afzal Merchant
Okay. And regarding pump storage hydroelectricity, Is this pump storage hydroelectricity also connected with BESS or pumps? Storage hydroelectricity is a separate business.
Manoj Digga
Storage hydroelectricity is the power generation another facility. Like you have hydro, like you have thermal, like you have solar pump Hydro is another way to generate the power that also may require the ass. So any energy which require the storage of energy Any any power plant which require the storage of energy. Where is where the base will come into structure. So base is the storage additional facility into the power pump Storage is another power generation unit which has started recently generate the power by doing the compostation. So that’s. That’s the separate facility. Yes, that will also require the BDSs.
Mohammed Afzal Merchant
Okay. Okay. And one more question regarding water business. Our water business is like B2G. Okay. So in this B2G business what de risking means parameters we are establishing so that or by through diversification of geography. Because there is a lot of risk in B2G business.
Manoj Digga
See, the water is primarily. It is a government subject. It is not the private subject in India. So water has related. There are few things in the water. One is the water connection. Secondly to have the irrigation water. Third is the water which required for the linking of the river. That is the third facility which is required. And what is the waste water treatment? So there are various various water treatment water requirement which is there and various schemes are there for the different water. Water only for drinking water like the AMRO is mainly for the irrigation water and to the.
To the. To some extent to the bulk water also. So these are the water system which we have and various schemes are running on that basis. And we are. We are. We are. We are taking the order accordingly. Our preferred order is as. As we set up the guideline internally that we will not take the order where the margin is less than 10%. We will not take order. There are various competitive orders where they are going very low. We are not going to take. Our margin is more than 10%. Then only we are going to take.
We are going to take the States where it is easy to operate. We are going to take the order which is where we have the good support from our suppliers like the pipe supplier etc, we have with the bellspan. These are where we have a very very strong and long relationship. So these are the where we have the where we are getting the support from these these partner. We are also seeing that where it is fully funded because that is a time might be taking any order that whether it is funded or not fully funded project having a high margin, having the commercial in such a way that we can reap the price through of certain cost.
And if it is for the bulk where the water supply or contractor or suppliers is supporting us. We are taking only those type of projects. We we are not entering. As As I told you at the beginning, the SPML this time is not focusing into the order book. We are focusing More into that bottom line. That is our magic. More to the towards the quality of order. Like. Like I am telling you this indoor it’s a unique India. I don’t think any company in India or even 23 company of the world. This type of water project which we got which required the 400 TPT and TP water treatment plant. And we have the technology the water and will improve the water quality and reach to the indoor city only on a very specific specific plants. So this is this type of unique project where there is a limited player to claim and there the margins are high. We are only selecting those project into our our s o we are very selective on those.
Mohammed Afzal Merchant
Okay. Okay. So. And one more question regarding arbitration targets. What are the targets of receivables in this financial year?
Manoj Digga
Arbitration. As I told you there is a roughly around 640 crore of arbitration award where the interest is Accumulated up to 31 March 2025 every day we are accumulating the inflation to this arbitration awards. All are at various stage. Like one arbitration award of roughly around 200 crore is at the Supreme Court level. So I hopefully by this year we may get that arbitration. If that gets the arbitration award by next year we may get the money into that also. So all the arbitration award which are there at very very advanced stage that different level of the code.
As soon as we keep on getting if the reduction into the 25 we are also getting towards our liquidity. So all are in track. We. We have the time from NARCL six years for the payment of the dues. We are expecting AR 400cr expecting the arbitration award to be received in four years. And that will be along with the interest to roughly around 800 crores. So we have arbitration awards for amend to the NARCL and further for the improvement into the liquidity. Further we have roughly around 4,600 crore of claim which are going to be converted into arbitration award.
If we see the past track 40% of the claim to award we are getting conversion. So around 1500 more of further visibility of their of the arbitration award. Both are going to become next six to eight years. That will. That will further improve the liquidity into the company. And in the mean if there is another scheme like Vivas Viswas last year has helped me. It was the grand SUC scheme of the government that happen then we will get the arbitration receipt much in advance compared to. Because then then the settlement will be immediately. It will not go up to the Supreme Court or High court level. They will settle and we will get the money.
Mohammed Afzal Merchant
Okay. And my last question is regarding Bess. What differentiation in offering we have against the competition in the market.
Samir Patel
So differentiation which we have is the AC block and the DC block which I am, which I mentioned later on. So we have two different technologies, unique technologies and currently what’s happening in India is DC block technology. So the uniqueness is we are offering both customizable to any, you know, sort of capacity which the customer might demand. So this is one of the uniqueness we are bringing to the energy sector here.
Manoj Digga
I1 I want to add one more. US is famous for their technology and their upgrade into the technology. And Bess is a highly technology driven industry. That’s, that’s one of the reason why we have selected the US partners because the U. S partners are really famous for their technology improvement and they will keep on doing the improvement on the technology which ESS will have. And that benefit we will keep on getting in the next few years.
Mohammed Afzal Merchant
Okay, thank you.
Devyanshi Dave
Thank you. Participants who wish to ask a question may please raise their hand using the react button. We have the next question from Mr. Raj Mantri. So you may unmute and please go ahead with your question.
Manoj Digga
Hi Raj.
Devyanshi Dave
So we’ll take the next question. We have next. Next question from Mr. Rajesh Nayak. So you may please go ahead.
Manoj Digga
Hi Rajesh.
Rajesh Naik
Hi. Good afternoon. So my basic question was whether our MIDC land has been fully allocated to us and whether the construction has been started over there or how is it.
Manoj Digga
Oh.
Samir Patel
So yes, we have the land, we have the position and we have finalized the layout. So it’s submitted to the event. So the construction we are anticipating to kick start from early next month.
Rajesh Naik
Okay. So are we in line with the production line? How is it?
Samir Patel
Yes, it’s in line with that and we are on track. We are hoping by end of Q1 the infrastructure will be ready. We’ll have some volumes coming out from that.
Rajesh Naik
Okay. And related to compliance. So what? All compliance is required for our best type of business.
Samir Patel
So we have sort of two sort of compliance. One is the factory regulations and the other one is the certifications from a safety perspective. Right. So the factory compliance is with MIDC and from time to time, as the construction keeps on, you know, maturing, we’ll submit the relevant documents to get that approved by the regulatory. That’s one thing. And from a certification standpoint for the product itself, we are focusing more on the safety aspects as per the Ministry of Power guidance. Mainly it’s the UN and UL and IC certifications. So that we already have from energy board. So once we deploy the final product to the site will revalidate that.
Rajesh Naik
Okay. One more thing was like whether we are doing energy storage as a service or or build on operate means boot boot type of this thing or Currently we are focused on only EPC based delivery only.
Manoj Digga
Upc. But all the options are available.
Rajesh Naik
Okay.
Manoj Digga
Based on the. Based on the requirement all the options are available. But at the time we are looking into the etc done.
Rajesh Naik
So that that means we are okay with the first quarter of the next year financial year we will be having some some revenue from the this business.
Manoj Digga
Best business targeting as a EPC some base order into this financially itself. Otherwise next year. So definitely with our plant.
Rajesh Naik
Oh great. Thanks a lot. That’s it for me.
Manoj Digga
Thank you.
Devyanshi Dave
Thank you. Participants who wish to ask a question may please raise their hand using the react button. We have the next question from Ms. Nisheta. Please go ahead.
Nishita
Hello, Good afternoon. I’m Nishita from Sapphire Capital. So I had a follow up question on one of the previous participants. You mentioned that there’s a 5,000 crore revenue visibility from the 5 gigawatt plant. So. And the 5 gigawatt plant we are supposed to be done by FY28. So I just wanted to understand that this revenue guidance is just from that plant. So what is the overall revenue guidance that you would give for FY28? 27.
Manoj Digga
This is the amount which we say that the 5 gigawatt plant can have the revenue generation capacity. Because then we can set up the base facility and as a EPC for 5,000 crore. But I’m. I’m not telling that the 2028 which will be 5,000 crore it can go and it will require the ramp of the base facility to have to 5000 crore into the water. We will have. There are two unit. One is the power and second is the water. In the water we will have the target of taking the 5,000 crore of order book every year.
This year also we have the target for 5000cr of order book. If it is a 5000cr order book it will be completed into three to four years. That is the timeline of the order to execute. And every year we will keep on getting the 5,000 crore. That is our minimum target which we are targeting to give them. From that you can analyze that how. How the target and how the revenue will grow in the power sector, in the water sector, in the power sectors. Based on the ramp up of the base facility, the revenue will keep on growing.
We have the target that by by 20, 29 or 30 we should have the water and power revenue. More on incentive.
Nishita
Okay, understood. Thank you so much.
Devyanshi Dave
Thank you. We have Mr. Raj back in queue so you may unmute your line and go ahead with your question.
Raj Mantri
Hello. Hello. Am I audible? So like my first question would be from the in the BDSS segment. So we are going to import B word software which is a containerized solution. So what we are going to import from China then?
Samir Patel
So from supply chain perspective we are going to import cells as a primary commodity and we are also going to import the cooling systems to start with for the next year. But then we are going to outsource and localize this commodities in the long term. So within Google CS almost 70% of this commodities will be localized. So for a start we are going to import most of the commodities. I would say probably 70% will be import but then that will be flipped over to 70% localized within India in answer to three years.
Raj Mantri
Okay. And second question would be. So actually I saw the press release by Energy Volt regarding the agreement with SPML and they had mentioned initial 500 megawatt of capacity of $100billion to be delivered under equipment contracts over next 12 months. And in the previous concord you had actually mentioned we are going to purchase B word software for $4million. So can you reconcile both the figures.
Manoj Digga
What this basically up to the 500. Basically they will help us to generate the VSS facility that is continuing. So we are targeting few orders where we will, we will basically the energy world not only giving the technology, they are also supporting us and helping us to have the facility infrastructure completed. And basically all our base which we will, we will manufacture. We will do the EPC of the base. They will also help us in handholding our system align and our all the infrastructure placed.
Raj Mantri
Okay, so I mean what sort of revenue we will provide to be vault other than that 4 million that were previously mentioned in the concord. In the previous concord.
Manoj Digga
When is the, when is the royalty? That is 1.75. No 1.7.
Raj Mantri
Okay. And that 4 million would be expense to P L or it will be capital capitalized in the balance sheet.
Manoj Digga
Say it’s a technology cost and it is a massive cost. So it will not be pnl.
Raj Mantri
Okay. And like has someone shown interest or had given orders like for EPC in.
Manoj Digga
BSS domain to SPM participated into various standards. Let’s see what the result come.
Raj Mantri
Okay sir, and my last question like could you brief about unit economics in BSS business? Like what would be the cost Per megawatt hour or gigawatt hour. And how I mean Roc regarding this business and the break even.
Manoj Digga
I think as I told you that is a container cost is basically one if it is a 5.5Giga megawatt container. So roughly around 5cr container and there is a cycle time of 8,000 cycles. There is a charge and discharge and various calculation comes into that. So I can. I can say the cost. The cost of DESS in all aspect to the. To the renewable energy which will install between around 90 paisa to 130 paisa in with 1 rupees 30 paisa. That will be the cost and that is where they will have the differential of the unit rate from the peak and non peak time.
That is their advantage. So that’s. That’s the way they will do. We will all the EPC if we do on the bess we will have the margin. It is a minimum targeted margin more than 10%. Otherwise EPC we will not take BSS EPS EPC also when we will have our component manufacturing of battery trap 1 where our margin will increase to 15 to 16%. That, that’s. That’s the BSS economics going forward with our revenue.
Raj Mantri
By how much time we will achieve the break even in battery manufacture. In battery pack manufacturing.
Manoj Digga
Break even. I think it should be in one year itself.
Raj Mantri
Okay sir. Thank you.
Devyanshi Dave
Thank you. We have the next question from Mr. Tushar Sarta. Please go ahead sir.
Tushar Sarda
Yeah, thank you. Thank you for the opportunity. I carrying on the previous question. So are you going to sell BSS. Pack to people who are doing this renewable energy project or are you going to take up the project and own the pack and get a recurring revenue? I’m not very clear on that.
Manoj Digga
We’ll sell the container which will utilize the BESS pack. This battery pack will utilize into the container. If you see the container cost, major cost of the container is battery pack roughly around 40 cost is the battery pack and that we are manufacturing.
Tushar Sarda
So you are selling that. Right?
Manoj Digga
So you will get that sell the container. We will sell the container. That is our target.
Tushar Sarda
Okay, so what we what is the working capital and margins going to be in this business?
Manoj Digga
Working capital in the BSS only we will require the LC limit for which at appropriate time we will discuss with the bank because bank are supporting us. And. That LC limit and the timeline of the LC will be sufficient. I don’t think in the DESS also we will require any fund based limit. It’s mainly the LC limit we will require like we require the BG limit for our ECDs.
Tushar Sarda
Okay. Okay. Thank you.
Devyanshi Dave
Thank you. We have the next question from Mr. Pratham Modi. So you may unmute and go ahead with your question.
Pratham Modi
Hello sir, good afternoon. My name is Pratham Modi and I am from HPMG Shares and securities. So my question is as you mentioned in the call that you will have the BSS capacity of 2.5 gigawatt next year. Would you please share a total capex for this capacity.
Manoj Digga
For the 2.5 it is 125 crore including the land etc. And if it is going to 5 gigawatt then it is 175. Till now that is the cost which we are funding through our own 125. We are funding through our own equity which we have generated from the preferential allotment.
Devyanshi Dave
Pratham, I hope that answers your question. We have a follow up question from Mr. Raman KV. You may please go ahead sir.
Raman Kerti
Hello sir. Can you hear me? Sir? One I have doubt with respect to Bess itself. Sir, I just want to know understand what is the current total addressable market size in India with respect to this BSS battery container which you are planning to sell.
Samir Patel
The market size currently in India, if you think about the top players it’s about 30 gigawatt. Okay. In the next five years it’s going to ramp up like a banana curve to 236 gigawatt. You know. So we are in the early phases where we are PT in via 2.5 gigawatt manufacturing capacity. Right. And so in the next one year this is what I’m expecting to sort of launch. Then once, once we have fully productionized 2.5 gigawatt capacity that’s like two containers if you do the math. Then we are going to ramp it up to 5 gigawatt.
After that that’s the next phase two which will be another one one to one and a half years. Right? So we’ll have let’s say from now until 2 1/2 to 3 years we’ll have a total capacity of 5 gigawatt. Okay? But still that doesn’t meet the 236 gigawatt demand. Because we will also have competitors out within the space. So our target is to move from 5 to 10 immediately after that as well. So if you see from a ramp up perspective we will start with 2.5. Then we will go to 5 giga and straight to 10 giga, you know, long term bet. So this is the way we have scale up Answer.
Raman Kerti
I just want to understand. You announced what’s the capex required for the 2.5 gigawatt of manufacturing plant which you are planning to establish in Pune? I mean you have said that the capex is 175 crores. If I’m right, does this include the land cost also which the which we receive from MITC?
Manoj Digga
175 is for the 5 giga. So 125 is the 2.5 gigawatt. This includes the land cost also.
Raman Kerti
That’s inclusive of the land cost. And this is entirely funded from preferential allotment. Right.
Manoj Digga
25. First phase we have funded through the preference here. Second phase also we have the liquidity. But that time we can think of any other. But till now all the phase, all the both the phases are from the preference here.
Raman Kerti
Answer. With respect to this thing margins, how much margins are you expecting from Bess? And once as you mentioned this, you are planning to start commercial operation by the end of Q1FY27. How much time will it take for us to ramp it up to optimization level.
Samir Patel
In terms of optimizing and scaling it up. So by end of Q1 we will start manufacturing the to join us. So my anticipation is depending on the order book and depending on how quickly we can get the tenders, you know, awarded you can ramp it up within three to four months immediately, you know.
Raman Kerti
Okay, so answer. I just have one doubt. You initially mentioned that you have a technology tab with the NASDAQ listed company. What’s the company’s name?
Manoj Digga
Revolt. Okay.
Raman Kerti
Thank you sir.
Devyanshi Dave
Thank you. We have a follow up question from Mr. Rajesh Naik. You may please go ahead answer. I would request you due to time constraints kindly limit your question to only one question.
Rajesh Naik
Yeah, thanks again for the opportunity. Could you, could you please share the timeline or plan for converting this preferential issue into regular listed equity? Is there any specific lock in period or regulatory milestones you are waiting for?
Manoj Digga
That is we have two essential. The warrants are going on. One is going to come in number mother is going to come in the. That includes the promoter also which we want to start funding to the company well before.
Rajesh Naik
Means. And what will be the lock in period?
Manoj Digga
Six months. That is the law.
Rajesh Naik
Okay, done. Thanks. Thanks.
Devyanshi Dave
Thank you. We have a follow up question from Mr. Tushar SATA. You may please go ahead sir.
Tushar Sarda
Thanks. Thanks for the opportunity again. I’m back on that working capital thing because we are going to import so many parts for Bass and the turnover is fairly high. You know, it’s like thousand crore per gigawatt. Right. So if you’re at 2.52 500 crore and roughly if I take 25% kind of working capital requirement then it comes to 600, 700 crore. Would my understanding be right or you think?
Manoj Digga
No, it is not right. Because it say every month production and it keep on going. So roughly, roughly the requirement will be for the 2.5 gigawatt. Our requirement will be roughly around 150 to 200 crore of LC limit that we have already.
Tushar Sarda
Limit. I understand. But inventory you will need to carry. Right. Because there is transit time and all that.
Manoj Digga
Because it’s order based which will keep on going.
Tushar Sarda
So you don’t think it will be more than 200.
Manoj Digga
No. That LC limit that more than that working apple is not required.
Tushar Sarda
So what is the ROC and ROE for this best project that one should you know factor in?
Manoj Digga
See this. These are the technology driven projects. So the technology driven projects is a high margin project and it’s having very high ROC and ROE.
Tushar Sarda
So probably north of 40%.
Manoj Digga
Forward when it will be established.
Tushar Sarda
Sorry I didn’t get your answer.
Manoj Digga
And go more than that. When it is established it will go.
Tushar Sarda
More than 40 minutes. Okay. Yeah. That’s what I wanted. Thank you so much.
Devyanshi Dave
Thank you. Mr. Tushar. We’ll take the final question from Mr. Pratham Modi. You may please go ahead.
Pratham Modi
Thank you for the opportunity, sir. The 175 crore capex for the 5 gigawatt plant is expected to generate an estimated revenue of 5,000 crore. Which result in an approximate asset turnover ratio of 28.57. Could you kindly provide more details or clarify how this asset turnover ratio is achieved?
Manoj Digga
This is the EPC. When like in our EPC if we are making the 5000 crore turnover we don’t have to have any asset in the the same way power. We are setting up the VESS facility and then rest of the things we are doing the epc. So you can’t consider the asset turnover compared to our plant and capex requirement that it’s there. But BSS plant based on the order they keep on generating the battery. Let me say battery. Battery storage container on the EPC basis. So that’s. That’s no correlation in the EPC with the acceptor.
Now. Am I clear on that? Like water, we are making 5,000 crore turnover fee. Maybe in the two to three years if the all the orders keep on going and we will keep on generating then there will be suppose 5000 crore of order book. It’s on the EPC. If we keep on we are keep on producing. We will keep on getting the money and the asset is our technology, our manpower and that’s that’s the asset. Same way bss. We will set up the battery plant unit and this then rest is the EPC where the so there is no iron correlation with the turnover versus the passive.
Pratham Modi
Okay, that’s helpful. Thank you so much.
Devyanshi Dave
Thank you. As there are no further questions, I would now like to hand over the call to the management for their closing remarks.
Manoj Digga
It’s very much I I feel water is very high in the in the in the Mumbai. Thank you every very much for everybody for taking this time to join us today. We are encouraged by the positive moment observed in Q2, the order inflow and robust pipeline of vendors. We remain optimistic about the opportunities that is ahead. Current order book combined with L1 position and successful build in strategically targeted tenders provides a strong foundation for substantial profitability and revenue growth. 3 Negative in involving global economic environment. Navigating to the involving global and economic environment. Our continued focus on critical sectors such as water and clean energy backed by our execution capability and disciplined financial approach position as well for the sustainable growth in financial 26 and beyond.
Once again, thank you for all your continuing support and confidence in our journey. We look forward to sharing our progress with you in coming quarters. Thank you very much.
Samir Patel
Thank you so much.
Devyanshi Dave
Thank you all for joining the call. You may disconnect your lines.
Samir Patel
Thank you.