Torrent Power Limited (NSE : TORNTPOWER) Q4 FY22 Earnings Conference Call dated May. 11, 2022
Corporate Participants:
Saurabh Mashruwala — Vice President, Finance
Analysts:
Harshavardhan Dole — IIFL Securities Limited — Analyst
Mohit Jalan — DAM Capital Advisors — Analyst
Unidentified Speaker —
Anuj Upadhyay — HDFC Securities — Analyst
Bhavin Vithlani — SBI Mutual Fund — Analyst
Subhadip Mitra — JM Financial — Analyst
Rahul Modi — ICICI Securities — Analyst
Unidentified Participant — — Analyst
Puneet Chaddha — HSBC Asset Management — Analyst
Apoorva Bahadur — Investec — Analyst
Deepesh Agarwal — UTI Mutual Fund — Analyst
Sumit Kishore — Axis Capital Ltd. — Analyst
Ankit Mittal — SBI Mutual Fund — Analyst
Dhruv Muchhal — HDFC Asset Management — Analyst
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Torrent Power Limited Q4 FY22 Earnings Conference Call, hosted by IIFL Securities Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ” ” then “0” on your touchtone phone. Please note, that this conference is being recorded.
I now hand the conference over to Mr. Harshavardhan Dole from IIFL Securities. Thank you, and over to you, sir.
Harshavardhan Dole — IIFL Securities Limited — Analyst
Thank you, Neerav. Greetings everyone on behalf of IIFL Securities. I welcome you all for the fourth quarter earnings call of Torrent Power, to discuss the results in detail and share the performance outlook. Today, we have the senior management team of the company, represented by Saurabh Mashruwala, VP Finance; Rishi Shah, GM Finance; and Jayprakash Khanwani, GM Finance.
I would request the management to give us a brief opening remarks, subsequent to which the floor will be open for Q&A. Over to you, Saurabh.
Saurabh Mashruwala — Vice President, Finance
Thank you, Harsh. Thank you, so much. Yes, good morning to all of you and thank you for joining earnings call for Torrent Power for Q4 FY22. First, I will take you through the performance of the quarter, after which phone lines will be open for Q&A session. Will explain the performance of the company at PBT level, first. And we’ll take the tax expenses separately thereafter.
Reported PBT for the quarter before exceptional items stood at INR597 crore as compared to INR455 crore in the corresponding quarter last year. It is an increase of about INR142 crore, about 31% of reported basis. To understand the underlying performance of the company, we’ll you through the non-recurring item, first during the current quarter as well as the comparable quarter of last year.
First non-recurring item of current quarter which includes number 1, reversal of provision of doubtful debt at franchisee distribution business about odd INR16 crore to better collection efficiency and increased vigilance activities during the quarter. Economic activity at our distribution franchise business continued to recover from pandemic effect during Q4 FY22 as well.
During FY22, demand at our distribution business, licenses plus franchise distribution business has almost reached to the pre-COVID level. The second is second non-recurring item is reversal of a partial provision of odd INR28 crore out of provision of INR161 crore made for our SECI 3 projects, wind projects during Q2 FY20. Therefore, performance bank issued as a security for development of transmission infrastructure have been released by the Power Grid Corporation Limited.
The third non-recurring item is reversal partial provision of INR29 crores out of total provision of INR651 crore made for SECI 5 projects during Q4 FY20. As the project development activity has already been initiated and it’s likely to be completed in FY23, provision of INR29 crore has been reversed, balance provision of INR22 crore was made towards the land costs incurred in initially. Same have not been reversed for the time being. Now the development activities being carried out at different sites.
The fourth item is non-recurring item of about INR34 crore recognized as a liquidated damages up for 126-megawatt MSEDCL project on account of settlement with EPC contractors. And the last one is all INR11 crore is due to renewable energy project, which is acquired in the course of the Q4 FY22. Since there are three project acquisition we made, one is Surya Vidyut Limited about 156 megawatt wind capacity, 50 megawatt of Lightsource bp capacity, which is the solar capacity and 25 megawatt of visual percept. So, all put together a non-recurring credit of INR118 crore was booked in Q4 FY22.
Coming to the comparable quarter of last year, there are two items of a nonrecurring items of Q4 FY21. First one is, reversal of provisions in franchise distribution business about INR13 crore due to better collection of comparable quarter of last year. Second is that there is a fuel costs under recovery of INR38 crore in Q3 of FY21 which got recovered in Q4. So, all put together, two items put together, non-recurring credit about INR51 crore, we have booked in Q4 of FY21. Adjusted for these one-off items, PBT for the quarter stood at INR479 crore compared to INR404 crore in the comparable quarter of last year, which is higher by about INR75 crore about 19%.
Now I’ll take you through the performance of the key highlights upon improvement in adjusted PBT of INR75 crore for the current quarter. First, the improvement is coming from the gas based power project because of two reasons, we have real incremental gain of over INR25 crore in gas-based power projects, first gain from merchant business of INR40 crore mainly coming from the sale of LNG. Sale of LNG as communicated in the last call as well. The elevated gas prices it to make commercial sense for a sustained LNG rather than generating in converting into electricity. The gain of INR40 crore is reduced by lower contribution of INR15 crore on account of fuel savings due to lower PLF, partially offset by the lower O&M costs also. In total about two factors profitably of gas based power plant has improved by about INR25 crore.
Moving onto the performance of distribution business due to risk aversion of industrial demand, which has impacted the last year due to COVID pandemic, there was an improvement in overall contribution from distribution business both franchisee and license business by about INR57 crore. So, distribution profit of license and franchise distribution business has gone up by INR57 crore.
And the last one is, there was a reduction in finance costs of about INR13 crore due to lower rate of interest as well as lower average debt level during the course of the quarter. Average interest rate for the quarter was lower by about 17 basis points compared to corresponding quarter of last year. The debt level up as on March 22 was higher at INR9115 crore compared to INR7808 crore, which is roughly higher by about INR1300 crore. This is mainly because of the acquisitions we made in the course of a quarter and that is a incredible debt in both SPV. So, a more complete explanation of financial performance now on operational performance as a company and distribution because the sector normalized demand for this thing marginal degrowth of only 1% as compared to the pre-COVID levels.
Moving on to the after-tax number consolidated loss after-tax reported for the quarter was INR484 crore as compared to a profit of INR408 crore in the corresponding quarter of last year. This lower by about INR892 crore, the loss is mainly on account of impairment charges which is one-off charges within in the course of the quarter of INR1300 crore and reversal of deferred tax liability of INR370 crore. So net impact of deferred digital impairment is about INR928 crore. Adjusted for impairment provision paid for the quarter stood at INR444 crore versus INR408 crore in the corresponding quarter of last year, it is higher by about INR36 crore roughly about 9%.
This completes the overview of the quarterly performance and operating performance of the company. Now review the update about the current projects which are in the pipeline for 150 megawatt SECI 5 project, which has received an extension September 22 to February 22. EPC contract for this project has already been awarded and construction of our gas already been started, and we expect that the commissioning of this project will happen during the course of FY23.
SCOD 100 megawatt of GUVNL project extended up to October ’22 and SCOD of 300 megawatt project TPLD which is extended further extended to February to April ’23. Acquisition transaction executed with three companies CESC, Lightsource BP and Visual Percept. it have been consummated during the course of Q4 FY22.
In FY23, 2022, the company entered into the share purchase agreement with Sky Power Group to acquire a 50 megawatt solar project Sunshakti Power Limited located at Telangana, with a enterprise value of INR417 crores, company doesn’t have any debt as of now. The PPAs exhibited INR5.35 and balance life is about 20 years. Expected take over of license distribution business of Dadar & Nagar Haveli and Daman & Diu, was formally taken over by us from 2022, 51% stake owned by the Torrent Power Limited. There is a source customer base, about 1.5 lakhs with annual sales of 9 billion units, and annual turnover of about INR4,000 crore. That’s all for the quarter.
Now I would request coordinator, to open the lines for Q&A session. Wish everybody stay safe and stay healthy. Thank you so much. Handing over to the operator.
Questions and Answers:
Operator
Thank you very much. [Operator Instrcutions] The first question is from the line of Mohit J from DAM Capital Advisors. Please go ahead.
Mohit Jalan — DAM Capital Advisors — Analyst
Good morning, sir. Good to see you there. So we have been able to maintain our profitability despite various headwinds. My question is, sir, have you got any tie-up for gas in this year? And most likely, it is going to be spot purchases till the gas market softens?
Saurabh Mashruwala — Vice President, Finance
Yeah, for the current calendar year FY22, we have not additionally tie up any one, only one cargo very differently we have purchased on a spot basis, on a medium-term contract, we have not contracted so far, the situation remains same as explained in the last earning call. So we have a contract on the further cargo, except one cargo for calendar year ’22.
Mohit Jalan — DAM Capital Advisors — Analyst
Understood. Since we have taken Daman and Diu, Dadar & Nagar Haveli so what are your expectations for capex for the next few years in this particular entity? And can you also give us the regulated equity number of the area?
Saurabh Mashruwala — Vice President, Finance
In terms of the Daman and Diu, its a long-term business. So we look at some long-term perspective and expectation of capex would be about INR1,000 crore in next 5, 7 years, that is what do we expect to incur and strengthen the network with Daman and Diu area.
Mohit Jalan — DAM Capital Advisors — Analyst
Is it possible to give the breakup of the EBITDA for the entire company?
Saurabh Mashruwala — Vice President, Finance
For the quarter, I can give the numbers of quarter. So, gas based project is about INR282 crore versus INR255 crore and renewable projects 147 crore versus INR157 crore, license distribution is about INR421 crore versus INR293 crore, franchisee is about INR167 versus INR184 crore and total EBITDA before reported is INR1088 crore versus INR948 crore.
Mohit Jalan — DAM Capital Advisors — Analyst
Understood, sir. Thank you, and best of luck, sir. Thank you.
Operator
Thank you. [Operator Instructions]
Harshavardhan Dole — IIFL Securities Limited — Analyst
Moderator, till the time we have the queues assembled, I’d like to basically ask a couple of questions from my side. Saurabh, if you can just help us understand the philosophy of doing this impairment, how frequent, should we expect this exercise to be conducted? And what has been the basis or base underlying price of gas, which has been considered, while impairing this asset? I mean, hypothetically if the gas prices fall below to $10, will you look forward to reverse the impairment or any philosophy or any comments on that?
Saurabh Mashruwala — Vice President, Finance
See impairment exercises are practice, we generally do every quarter. So every quarter we do the impairment exercise along with the PWC, because its the statutory auditor, and generally on Q4 of last quarter, we do the — we involve the third party also, where thirds party also get involved and do their valuations and they give their opinion. So, that exercise every year we do carried out, even last year also, we carried out a singular exercise of third-party valuation in Q4. And this year also we carried out the similar exercise.
In terms of fuel prices, we take the fuel price in the market price whatever is available in the forward market. So, they brand price we take and we apply some slope and arrive at the fuel price and do the valuations,
Unidentified Speaker —
And just to add on what Saurabh said, Harsh, going forward, we may not expect much of impairment because if you look at the carrying value of the plant, now it’s very negligible in terms of the impairment testing is to be done. So, around only INR600 crore, which is pending for impairment. So going forward, we may not expect much of impairment coming out of this plant.
Saurabh Mashruwala — Vice President, Finance
So, thousand feed was the residual value, I would say, current carrying value, out of it about some about this INR600 crore to INR700 crore is the residual values, which will not be provided. The balance will be out INR600 crore to INR700 crore still to be left out. So, that will be paid out over the buyback will be charged to the P&L buyback of depreciation, going forward.
Mohit Jalan — DAM Capital Advisors — Analyst
Understood. Thank you. Moderator, can we take the next question. Thank you.
Operator
Sure. Thank you. The next question is from the line of Anuj Upadhyay from HDFC Securities, please go ahead.
Anuj Upadhyay — HDFC Securities — Analyst
Yeah, hi, thanks for the opportunity. Sir, can you please elaborate further on the gas settlement of the tender, which you have, you mentioned that we have already gone for the 1 cargo. But in the last call, you had mentioned that you had contracted three cargos each year for the calendar year ’22 till ’27, which would take about 25% of the requirement. And now we have contracted another one. So with this, what portion of our gas requirement has been met in debt and our strategy for the balance requirement?
Saurabh Mashruwala — Vice President, Finance
See, we have existing gas buy from reliance which is about meeting about 25% above requirement. So 25% tie up long term tie up we have already. So, in last calendar year we floated tender for Ukraine 34 cargos out of — so we secured about 34 cargos last year from calendar year ’23 to ’26, about 4 years every about 6 to 7 cargos we have contracted. With this tie up from calendar year ’23 to ’26, this is about 25% of requirement. So, total 50% of requirement, we have tied up from calendar year ’23 to ’26.
For current year, we are still, we have about 25% requirement we have tied up, one cargo recently, we have contracted. Balance requirement is yet to be tied up for the current calendar year. So, what we can say from calendar ’23 to ’26, we have secured about 50% of our requirements.
Anuj Upadhyay — HDFC Securities — Analyst
’23, ’26 calendar year?
Saurabh Mashruwala — Vice President, Finance
Calendar year, yes. For four years.
Anuj Upadhyay — HDFC Securities — Analyst
Fair enough, sir. And would you just mention about the capex plan, are we going with the around INR15 billion of capex for FY23 – FY24, or are there any changes?
Saurabh Mashruwala — Vice President, Finance
No, capex plan remains same. So INR1,200 crore for our license distribution business. Number INR250 crore for our franchise distribution business for next 3 years. I can give you the update about the current year, capex, which we have incurred FY22. License distribution, we are going as per the projections for INR1,200 crore, INR1,254 crore capex, we have incurred for the FY22, franchisee incured about INR316 crores capex. So, we are going as per the plan, which we have given during last couple of calls. So, INR1,500 crore capex, we have incurred during the course of FY22 and we expect to incur in next 3 years also.
Anuj Upadhyay — HDFC Securities — Analyst
Fair enough, sir. Lastly on that 100 megawatt GUVNL tender, sir, any update on that front?
Saurabh Mashruwala — Vice President, Finance
That we have time till October. So, we are waiting for module price to soften. So, we’ll take a call, I think in the course of next quarter.
Anuj Upadhyay — HDFC Securities — Analyst
Right. Until October in the sense it won’t incur any penalty?
Saurabh Mashruwala — Vice President, Finance
Solar projects, generally once you start implementing it in contracting of modules, it will be — it will not be like a wind power plant kind of increase, it will be implemented fast, for solar projects.
Anuj Upadhyay — HDFC Securities — Analyst
Fair enough, sir. That’s it from me.
Operator
Thank you. [Operator Instructions] The next question is from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Thank you for the opportunity, sir. I have three questions. First on SUGEN and UNOSUGEN, which are cost-plus projects. Could you just help us understand given gas tie-ups that we have? Would we be able to recover our fixed charges and return on equity?
Saurabh Mashruwala — Vice President, Finance
SUGEN and UNOSUGEN since we have TP in the section 62 and gas availability, gas is available not but at higher price. So, gas is available. So we have to establish the availability of the gas. Once we establish availability for gas as per the terms of the PPA and we are able to — we are going to recover the fixed cost up SUGEN as well as UNOSUGEN project also.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Sure. Even for fiscal ’23 as well, given the gas situation, we assume that fixed charges return?
Saurabh Mashruwala — Vice President, Finance
Yes.
Bhavin Vithlani — SBI Mutual Fund — Analyst
The second follow-up on the same is there is an element of incentive and efficiency in both SUGEN and UNOSUGEN. Could you just help us with that. What was that number in fiscal ’22 and how do you see that number given our utilizations are low currently?
Saurabh Mashruwala — Vice President, Finance
We have a number of — because of lower volumes in SUGEN and UNOSUGEN project in Q4, there were some reduction, about INR15 crore, fuel gain loss in terms of SUGEN and UNOSUGEN, that is what I can share right now with you, for Q4.
Unidentified Speaker —
So Bhavin just to add on to what Saurabh said, as far as I mean there are two elements in involved here. One is SSR savings and the other portion is O&M savings. As far as O&M savings are concerned, we are entitled to have all the savings available in that PPA as far as SSR savings, it is dependent on the PLF at which the plant operates. So, since there is a reduction in PLF of both these plants SSR savings would be lower, but we will be entitled to get our entire O&M savings. So all put together, there is a net charge on the P&L for this quarter of around INR15 crore.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Thank you. This is very helpful. The second question I had is on the franchisee. We’ve been seeing very sticky AT&C losses of around 40 odd percent in Shil, Mumbra & Kalwa. Could you just help us understand maybe on a 3-year basis, what is the kind of improvement that one can expect on the AT&C losses?
Saurabh Mashruwala — Vice President, Finance
So, in terms of SMK area, I can give you the numbers basically, so if you look at the FY21 AT&C loss number of Shil, Mumbra & Kalwa was about 52% AT&C losses for the full year. In FY22, we have achieved 39%. So, that is a significant improvement we have reported in terms of AT&C in Shil, Mumbra & Kalwa. In terms of T&D losses we have secured a reduction about 5% out of which 12% reduction in AT&C losses, 5% belongs to the T&D losses, so we can expect this kind of a reduction going forward at least for a couple of years, I would say.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Sure. The last question is on the Agra and Bhiwandi franchises. On a three-year basis, is it fair to say that we can reach the losses level what we are seeing on our Ahmedabad and Surat license areas?
Saurabh Mashruwala — Vice President, Finance
In terms of, Bhiwandi for example, the T&D losses was FY22 end it was about 11.64%. So, in terms of –we expect from reduction, every year some improvement will be there about 1% to 1.5% improvement we can expect in Bhiwandi as well as Agra also. But incrementally, since the base itself is reducing the incremental pace of reduction would get reduced for a period of time.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Sure. That’s very helpful. Thank you so much for taking my questions.
Operator
Thank you. Next question is from the line of Subhadip Mitra from JM Financial. Please go ahead.
Subhadip Mitra — JM Financial — Analyst
Good morning and thank you for the opportunity. So, if you could just help us with the regulated equity at Dadra & Nagar Haveli and also give us the regulated equity for the license business?
Saurabh Mashruwala — Vice President, Finance
So, I can give license distribution business, regulated equity as of March ’22 for license business for Ahmedabad Surat and the Dahej, regulated equity is about INR3,000 crore. And AMGEN is about INR434 crore and SUGEN is about INR916 crore and UNOSUGEN is INR533 crore.
Subhadip Mitra — JM Financial — Analyst
Sorry, I missed the last one.
Saurabh Mashruwala — Vice President, Finance
UNOSUGEN is INR533 crore.
Subhadip Mitra — JM Financial — Analyst
533?
Saurabh Mashruwala — Vice President, Finance
Yes.
Subhadip Mitra — JM Financial — Analyst
Thank you. So, the Dadra & Nagar Haveli regulated equity is not available as of now?
Saurabh Mashruwala — Vice President, Finance
About INR149 crore regulated equity — INR150 crore roughly.
Subhadip Mitra — JM Financial — Analyst
INR150 crore?
Saurabh Mashruwala — Vice President, Finance
Yes.
Subhadip Mitra — JM Financial — Analyst
Okay. Perfect. Yeah. Secondly, with regard to the gas price threshold that we have for actually operating the plants. In your opinion, that number is around that $10 — and these plants kind of become economical?
Saurabh Mashruwala — Vice President, Finance
See, it depends on the comparative cost also like coal also has gone up, so if you look at the real-time situation, because coal is also higher, coal cost has also gone up. So, numbers are changing. In fact, it’s not across at one particular level, I would say.
Subhadip Mitra — JM Financial — Analyst
Okay. I was actually just trying to understand it from the UNOSUGEN PPA if I remember correctly, I think that the cap on the tariff there was somewhere around 4.2. So I’m just trying to backward based on that. So would that culminate to around $10 kind of number, is that the right number?
Saurabh Mashruwala — Vice President, Finance
Should get 4.5 about gas cost about $9 kind of things.
Subhadip Mitra — JM Financial — Analyst
About $9. Understood, understood. Okay. Lastly, with regard to the write-offs that we’re doing for DGEN, as you mentioned that you’re doing it based on the current LNG spot prices and based on that you are doing these write-offs. So, one can possibly look at a write-back sometime going ahead, assuming gas prices come off?
Saurabh Mashruwala — Vice President, Finance
See in the impairment assessment fuel price, as well as whatever assumption in terms of sell, power selling arrangement also. So we have, assume about in terms of power selling arrangement we assume about 5 years of average merchant spot price also so, exchange price, I would say, so that also has elevated for the current quarter. If you see the cost is elevated, selling price also elevated but higher, so one as to not look at the, the fuel cost, but one has to look at what price we are going to sell it also. So, its basically combination of all factors come in and determines impairment assessment, I would say, not only one factor.
Subhadip Mitra — JM Financial — Analyst
Understood. So, you are not really anticipating any large write-backs even if prices, gas prices correct because already taken off higher exchange in price?
Saurabh Mashruwala — Vice President, Finance
So, every year, every quarter in fact, we are reviewing the assumptions and every year we do the — we engage in third party value also for these assessment. So, on ongoing basis we’ll do the impairment testing every year, every year as well as every quarter also we’ll review the assumptions.
Subhadip Mitra — JM Financial — Analyst
Understood. Last question from my side for the UNOSUGEN PPAs. So, while I think the PPA mentioned the tariff cap of about 4.2, 4.3 given that today even imported coal waste prices, have a tariff cap of INR12. In your opinion, does the PPA enable the discount to kind of buy at a higher tariff, despite the fact that the cap that was mentioned in the PPA is low?
Saurabh Mashruwala — Vice President, Finance
So basically, we have to ensure the availability of the plant and availability of the gas for the future UNOSUGEN project. Once we establish availability fixed cost, we are able to record the fixed costs.
Subhadip Mitra — JM Financial — Analyst
No, I understand, that part, I’m actually looking at it more from a P&L perspective that’s assuming that you able to recover the fixed cost of UNOSUGEN, the PPA has a tariff cap of around 4.2 whereas let’s say that discount requires far and today the next best alternative is coming at maybe INR12. So, would that enable you at some point of time to kind of operate the plant, assuming a INR12 you’re able to operate the plant and make money and the discount is ready to buy at that price. So, just trying to look at that scenario.
Saurabh Mashruwala — Vice President, Finance
We have to take take the regulators more on this particular point. Once the regulator is allowing, yes, definitely we can generate the power and elevate the discounts at this price also.
Subhadip Mitra — JM Financial — Analyst
Understood, understood. Thank you for answering the questions. That’s it from my side.
Saurabh Mashruwala — Vice President, Finance
Thank you. The next question is from the line of Rahul Modi from ICICI Securities, please go ahead. Thank you for the opportunity, sir. Sir, my first question is, the one cargo that we have tied up this year so far, sir, what is the average rate at which we would have done that, the gas? And so, what are the rates that we are getting, are we seeing any discounts? And are we able to buy gas from Russia? See all the contract is about $20 kind of a contract.
Rahul Modi — ICICI Securities — Analyst
Okay. $20. And how is the pricing now, sir, which we are getting into the market?
Saurabh Mashruwala — Vice President, Finance
Are at same level I think prices, so very decently we have contracted, the pricing is currently around $20, $21 kind of thing.
Rahul Modi — ICICI Securities — Analyst
Okay. Sir, anything on the Russian side. We are able to get some discounts in this year?
Saurabh Mashruwala — Vice President, Finance
Not so far, not so far.
Rahul Modi — ICICI Securities — Analyst
Okay. My second question is with regards to the 400 megawatt of GUVNL and our own distribution renewal bid. Sir, does this fall under the ALM procurement of or this does not entail that and you can go ahead and import? And when you are saying that we’ll be looking at the module prices so, if the BCD, is it a pass-through in our tariff, if at all, how does it work?
Saurabh Mashruwala — Vice President, Finance
Yes, it’s basically change the law condition. So BCD is going to be pass through.
Rahul Modi — ICICI Securities — Analyst
Okay. So, the 40% in the BCD is the pass through, but as your strategy sir, you are looking at locally procuring modules or continue to import?
Saurabh Mashruwala — Vice President, Finance
We are just watching the, monitoring the module price locally, as well as from the foreign market also, based on what I think cost we will take a cost based in the next couple of months.
Unidentified Speaker —
So, Rahul, what is happening here is that when we bided for the contract, module prices were hovering around certain levels. Which has got elevated to a very high level right now. Because of which we are yet to take a decision on whether to implement the project or not. Now, it is very difficult to guess where these prices will end up over a period of time. So, right now, giving any color on the implementation of the project would be very difficult.
Rahul Modi — ICICI Securities — Analyst
Sure, sir. That’s very helpful. Sir, one more thing is that obviously as a strategy, we’ve acquired many assets over the last 12 months. So, clearly inorganic growth in renewables is one of the strategy. For the other part of it is the bidding. So, how do you look at it, are we active, non-active given our experiences in the large Q3 bids, as the strategy, you probably look at that?
Saurabh Mashruwala — Vice President, Finance
Yes, in both the areas, as far as inorganically as well as organically, we are looking at both areas. We are also participating in a couple of biddings also for the new projects and at the same time, we are looking at M&A activity fees also, by acquiring the operating projects.
Rahul Modi — ICICI Securities — Analyst
Sure, sir. And last question from my side. Sir, given the customer profile of both license businesses and the franchise businesses, sir in terms of percentages what is the target AT&C losses over there or what is the best case AT&C loss that we can reduce from the current levels of 10%, 11% that we have. So, how much savings over the years can happen in the distribution area?
Saurabh Mashruwala — Vice President, Finance
As we see in licensed distribution area only we don’t have much, there are almost recovery is almost 100% and in terms of franchisee area in terms of our collection efficiency, last year, it’s almost more than in case of Bhiwandi and SMK, it is more than 100% collection efficiency, Agra is about 99% collection we have achieved last year. So in terms of a reduction in AT&C losses franchisee distribution as we explained earlier also we can export about 1% to 1.5% reduction in certain levels, I would say not every year on a perpetual basis, we can expect the reduction.
Rahul Modi — ICICI Securities — Analyst
So, that 1% to 1.5% at certain levels that you mentioned, what could that be ballpark, just to understand?
Unidentified Speaker —
So, Rahul, if you look at our existing license distribution businesses, they are in the range of 5% to 6% or 4% to 6% I would say, there is significant headroom available for franchise distribution business also to achieve that those levels over a period of time, it would be a gradual reduction in AT&C losses. So, on a long-term basis we may expect that they should be also in the same lines with license distribution businesses. But that pace of reduction will keep on reducing as your base also goes on going down.
Rahul Modi — ICICI Securities — Analyst
Right. Sir, lastly, sir, how is the interest rate market fairing once we are going in for financing or when we’ve taken fresh loans, just, this is more of a macro question. How is that faring for us and the market? Are we seeing refinancing happening at some higher levels with increase in interest rate, that guidance would be very helpful? Thank you.
Saurabh Mashruwala — Vice President, Finance
Interest rate if you look at has moved very recently. So our rate is linked with our borrowing linked with the base rate, lets say base rate is the lenders base rate. So, at the moment, the lenders is the base rate, yes, our costs are also moved up instead in similar direction.
Unidentified Participant — — Analyst
So, adding to this if you look at our mix of debt borrowing, some portion is variable some portion is fixed. So in fixed-rate loans, we don’t expect any increase in the borrowing cost. But on the variable-rate loans there would be an increase. Once MCLR start increasing over a period of time, some portion of it will also be allocated to the license distribution businesses, which will have a pass through impact. So as far as P&L impact is concerned, there would be a smaller impact in terms of existing loans, as far as new loans loans are concerned because of recent RBI hike in Repo and CRR there would be an impact on incremental borrowings, which will be over a period of time.
Rahul Modi — ICICI Securities — Analyst
Sure sir, thank you and all the best.
Saurabh Mashruwala — Vice President, Finance
Thank you.
Operator
Thank you. Next question is from the line of Puneet from HSBC Global Asset Management. Please go ahead.
Puneet Chaddha — HSBC Asset Management — Analyst
Yes. Hi, thanks. My only question is, you alluded to module prices being high and that you may not include the project. Is there — what type of penalty would have to say if you don’t execute the project and what could we be any other consequences of it now?
Saurabh Mashruwala — Vice President, Finance
In 100 megawatt project is about INR10 crore penalty is there.
Puneet Chaddha — HSBC Asset Management — Analyst
So, that it and there is nothing more to it.
Saurabh Mashruwala — Vice President, Finance
Yeah.
Puneet Chaddha — HSBC Asset Management — Analyst
Okay. That’s all form my side.
Operator
Thank you. The next question is from the line of Apoorva Bahadur from Investec. Please go ahead.
Apoorva Bahadur — Investec — Analyst
Hi, sir. Thank you for the opportunity. So, continuing on this variable cost debt question. So can you please share the amount already proportion that is due for in financing in this year?
Saurabh Mashruwala — Vice President, Finance
Can you repeat the question.
Apoorva Bahadur — Investec — Analyst
So how much of our debt is due for refinancing this year with basically the variable cost if it get repriced in?
Unidentified Speaker —
Apoorva, to answer that question, most of our loans are long-term loans, with an amortizing schedule, which means that every year we will be paying INR800 crore to INR1000 crore of repayments. But as I told you, some of the loans are variable-rate loans, which are linked to MCLR of banks from whom we have tied up, so there may not be a question of refinancing but since rates are variable, it will increase going forward once MCLR starts increasing because of recent hikes by the Central Bank.
Apoorva Bahadur — Investec — Analyst
Okay. Fair enough. And also I wanted to understand on the gas profits on the profit from gas sale, which we are guiding in the last two to three quarters. Do we need to share any of it with the discount, especially in the distribution license areas?
Unidentified Speaker —
No, we don’t have to. It’s basically its a separate line of business.
Apoorva Bahadur — Investec — Analyst
Okay. Lastly, I think you highlighted that the cost of borrowing is going up for new loans now given that we have couple of renewables, which has yet to be executed. Would you like to comment on the viability of the cost of debt increase and to what level will you continue or intend to execute? Given that the solar module price is already quite high.
Unidentified Speaker —
Apoorva, so first of all, it all hinges on how the module prices behave. If they are within the range, then the next question would be of interest cost, as you would say we understand these are all long-term 25 year projects, currently interest rates are an upward cycle. But going forward, we expect that after a couple of years, it should go down also, so it all depends on the module prices as of now. Interest rates may not be a significant factor contributing to the decision of UNO.
Apoorva Bahadur — Investec — Analyst
Okay, thank you so much.
Operator
Thank you. The next question is from line of Deepesh Agarwal from UTI. Please go ahead.
Deepesh Agarwal — UTI Mutual Fund — Analyst
Yes, good morning, sir. My first question is, would we be allowed to trade on the gas, which is procured from domestic sources, that is from IOCL or SLI? Or the trading is restricted only on the imported gas?
Saurabh Mashruwala — Vice President, Finance
Sorry?
Deepesh Agarwal — UTI Mutual Fund — Analyst
Hello.
Saurabh Mashruwala — Vice President, Finance
Can you repeat the question, please?
Deepesh Agarwal — UTI Mutual Fund — Analyst
So, my question was, so the trading on LNG is only on the imported gas or you can even trade at domestic gas? Hello?
Operator
So, one moment.
Saurabh Mashruwala — Vice President, Finance
Yeah, we don’t like to answer this question.
Deepesh Agarwal — UTI Mutual Fund — Analyst
Okay. Okay. Secondly, can you help us with the gross block of your renewable portfolio which is operational right now?
Saurabh Mashruwala — Vice President, Finance
Gross block of renewable portfolio. Can it be offline, we don’t have numbers handy right now.
Deepesh Agarwal — UTI Mutual Fund — Analyst
Okay, and lastly can you comment, are there any circles coming off for privatization in the next 12 to 18 months?
Saurabh Mashruwala — Vice President, Finance
Government has announced the union territories Lakshadweep, Pondicherry kind of thing. So those are the circles which are going to come for the bidding.
Operator
Sir, the line for the participant dropped. We move onto the next participant. The next question is from the line of Sumit Kishore from Axis Capital Ltd. Please go ahead.
Sumit Kishore — Axis Capital Ltd. — Analyst
Hi, good morning, Saurabh and Rahul. My first question is in relation to the Dadra and Nagar Haveli and D&D, while the acquisition is effective for people, would it be possible for you to share the revenue, EBITDA PAT for FY22?
Saurabh Mashruwala — Vice President, Finance
Yes. Yet to get the numbers of FY22 from the old company, I would say.
Sumit Kishore — Axis Capital Ltd. — Analyst
Okay. And second question is on the renewable side and then the last financial year, the country has managed to add close to about 15 gigawatt of renewable capacity, the bulk of it coming from solar. Hello?
Operator
Sir, one moment.
Sumit Kishore — Axis Capital Ltd. — Analyst
Hello. Am I audible?
Operator
Yes, sir. You are audible.
Sumit Kishore — Axis Capital Ltd. — Analyst
Yes, so I was saying that in the last financial year close to about 15 odd gigawatt of renewable capacity has got added and largely through solar, but now given module prices are high, the imposition of import duties on modules and sells ALM also looking in the background. Do you see the pace of execution, not only for Torrent on an organic basis, but for the country as a whole, seeing some sort of slowdown in the next couple of quarters? And also if you could comment on the bid pipeline that you’re seeing for solar, right now, maybe from 6 months to 12 months perspective?
Unidentified Participant — — Analyst
So, Sumeet, if you look at the prices of modules which are prevailing as of now and the bid label or the tariffs, which have been quoted as per our understanding, it will be very difficult for anybody to go ahead and implement the project at the tariffs, which have been quoted, at the current model prices. Expectations are that over a period of time module prices will start falling again, and then some of the projects will become viable and will get implemented. But it’s a very difficult question to answer in the sense that how module prices would behave, how ALM would work and how domestic prices would come of modules going forward. So, as of now, we understand that it would be difficult for anybody to implement the projects as the tariffs quoted at the current module prices.
Sumit Kishore — Axis Capital Ltd. — Analyst
So, rationally I understand the strategy and but is it looking like that FY23 might very well be a year, if the current situation prevails where solar capacity addition is actually lower than FY22?
Unidentified Speaker —
On this question many things change very fast so as Saurabh mentioned earlier in the call that putting up a solar plant is not that time consuming, if you have other infrastructure ready. So, if module prices start coming down, you will see higher implementation but at these elevated levels looks difficult.
Sumit Kishore — Axis Capital Ltd. — Analyst
But the discounts are not ready to budge or there is no parallel discussions happening on sort of adjusting tariffs and going ahead with the project, in the light of the new developments?
Unidentified Speaker —
These are all bided projects. So anyways ways you can do anything once the bidding is done except to reduce it further where there is — doesn’t look like there is a scope there. And we are not privy to any such kind of discussions.
Sumit Kishore — Axis Capital Ltd. — Analyst
Sure. Thank you and wish you all the best.
Saurabh Mashruwala — Vice President, Finance
Thank you.
Operator
Thank you. The next question is from the line of Ankit Mittal from SBI Mutual Fund. Please go ahead.
Ankit Mittal — SBI Mutual Fund — Analyst
Yes, thank you so much for the opportunity. So my first question was actually on the AMGEN recollect I think initial timeline for the retirement was set at December ’22 and there were some amount of discussions that you were having with the regulator on the same. If you could just point some update, how would you look at the retirement AMGEN and at this point in time?
Saurabh Mashruwala — Vice President, Finance
We are waiting for the clarification from MOEF so still it is not decided right now. So as of now the December ’22 is going to be extended, that is what our expectation is. So, it’s not going to be done by December ’22.
Ankit Mittal — SBI Mutual Fund — Analyst
Okay. And what have you — hear on the — I think there is still good four five years of useful life remaining for AMGEN, I think, correct me if I’m wrong over there?
Saurabh Mashruwala — Vice President, Finance
Looking to the current power situation in the country, we expect that the MOEF will consider the extension of most of our power plant, which are efficient I would say, so AMGEN is one of the most efficient plant. Even though it has four, five years of life available. It’s a more efficient plant as compared with the old plants. So we expect that the government will consider expansion of those plant, which are efficiently run.
Ankit Mittal — SBI Mutual Fund — Analyst
Okay, fair. That’s helpful. The other question was just to understand on the the regulatory assets, sir. If you could what is the current regulatory asset to end up? And secondly, I don’t think there is a very large traffic I think that’s happened this year, given that the average cost of purchase is going up. How do you see the regulatory gap, then moving for the current year?
Saurabh Mashruwala — Vice President, Finance
Regulatory assets is about INR1,900 crore at this moment, out of which about 1,300 crore we already booked in the books of accounts, remaining is under dispute with the regulator. And in terms of tariff hike, they have not given in the last three quarters, but it’s a basically whatever incremental cost is there, in terms of power being passed through SMK mechanism. Very recently, in fact we have got about 20 basis points tariff increase in the rate also, so, on a regular basis, regulatory is considering the increase in the pay rates so, it’s an ongoing process basically.
Ankit Mittal — SBI Mutual Fund — Analyst
Okay. In general, what would be the regulatory gap for this year? Because like I said, the tariff increase is not commensurate with the power purchase cost increase that we see this year.
Saurabh Mashruwala — Vice President, Finance
Which year you are talking about ’22 or ’23?
Ankit Mittal — SBI Mutual Fund — Analyst
For ’23.
Saurabh Mashruwala — Vice President, Finance
It is difficult to estimate, because it’s basically based on what kind of — what level we are going to purchase the power, and what will be the fuel costs. So it’s very difficult to predict what will be the level at as on March ’23.
Unidentified Speaker —
And just to add there would not be any impact on profitability because carrying cost also is available on the regulatory gap. So, it would be a question of cash flow rather than impact on the P&L, if at all there is an increase in the regulatory gap.
Ankit Mittal — SBI Mutual Fund — Analyst
That is where I was just trying to understand actually because the dividend for this year is also slightly lower. And what we see in ’21. Do you see any cash flow which is coming in for the next year, which is where?
Unidentified Speaker —
This was — the current year’s dividend is not because of any cash flow related issues. As you know, we are also in a growth phase and our stated policy is 40% dividend, any incremental dividend will depend on how management looks at in terms of growth going forward. Since, we are into growth phase, dividend has been above 40% and also there was a one-off item in the P&L, which also had certain limitations to give additional dividends. It is nothing to do with the cash flow or cash per se of the company.
Ankit Mittal — SBI Mutual Fund — Analyst
Okay. Okay, got it. And just one last question on Dholera, what is the status over there, what sort of capex are we looking to do, is there any pickup in the investments that we see within that region over the next, let’s say five years or so?
Saurabh Mashruwala — Vice President, Finance
We are seeing some activities in Dholera area also, some industries are also coming up, setting up the new projects. So, as we indicated earlier, we expect about INR1,000 crore capex in next seven, eight years in Dholera area.
Ankit Mittal — SBI Mutual Fund — Analyst
Okay. Fair. That’s it from my side. Thank you for taking my questions.
Operator
Thank you. The next question is from the line of Dhruv Muchhal from HDFC Asset Management. Please go ahead.
Dhruv Muchhal — HDFC Asset Management — Analyst
Yes, sir. Thank you. Sir, one clarification. The INR15 crore impact the gas generation business on a Y-o-Y basis, that is primarily to do with the fuel savings. So, if I have to annualize it, that’s about assuming for the rest of the year, the plant runs at similar rate hypothetically. The maximum impact is about INR60 crore because of the fuel saving, that’s broadly right sir?
Saurabh Mashruwala — Vice President, Finance
Yes. You can assume that way because the current impact is for Q1. I mean it’s the last quarter Q4.
Dhruv Muchhal — HDFC Asset Management — Analyst
Yes. Assuming the plants remain at these levels given how the gas prices are, that’s the maximum impact nothing more than that?
Saurabh Mashruwala — Vice President, Finance
Yes, you can assume that way.
Dhruv Muchhal — HDFC Asset Management — Analyst
Sir, the second thing was, when we look at your tariff orders for Ahmadabad in Surat, the tariffs, the capex that we have put in for this year, if I’m not wrong, sir Ahmedabad is about INR1500 odd crore and Surat is another, I think INR100 crore and INR200 odd crore. So, that totals to about INR1700 odd crore versus your guidance is about INR1200 crore. So, last year, last I mean FY21 was COVID, I understand there was a difference. So, should we assume that there could be some upside to your capex for distribution licenses versus what you have guided at least from the tariff orders?
Saurabh Mashruwala — Vice President, Finance
Current guidance which we have given about INR1,200 crore for our license distribution business about INR200 crore, INR250 crore for franchise distribution business. I think this is a reasonable assumption one should consider.
Dhruv Muchhal — HDFC Asset Management — Analyst
Okay. And sir, for the next two, three years, should we assume a similar rate for the license distribution INR1200 odd?
Saurabh Mashruwala — Vice President, Finance
We are seeing about two to three years a similar capex, we are going to incur.
Dhruv Muchhal — HDFC Asset Management — Analyst
Okay. That is sufficient. Sure, sir. And sir, last thing a bit of macro here. We are seeing this demand shortage, supply shortage apart because of imported coal and many other things. Sir for us also, there is some shortage in our Ahmedabad plus Surat requirement part of which we buy from exchanges and others. So, given how the situation is panning out, do you think because if you have to depend on merchant power, there is an expectation that the prices will be higher, like, what we’re seeing now. So, is there some talks or expectation that you will probably go ahead for a medium term or a long-term PPA to meet your medium-term requirement as we move ahead and as the power situation continues to get tightened? And related to that is, does this also — if it is possible, does this also create an opportunity for us to probably meet that requirement through a power plant or I’m not sure through some alternate power plants, if that’s possible?
Saurabh Mashruwala — Vice President, Finance
See as far as our distribution area is concerned, licenses and franchisee, till yesterday, we don’t have any issue about the power cuts, I would say. We are fully 24/7 we are supplying power to all our distribution area. In terms of our license distribution area, we have before the power cut started, we have contacted some short-term power purchase agreement with a couple of suppliers. So, we are fairly comfortable in terms of for our area for supplying powerful 24/7.
Dhruv Muchhal — HDFC Asset Management — Analyst
Sure, sir. Sir, I understand you’re meeting the requirement, but the cost of merchant power is increasing as we see. So, from a cost angle, is there a consideration that we should go for a medium term or a long-term PPA probably the regulators also inching towards that, some sense there?
Saurabh Mashruwala — Vice President, Finance
Before this crisis started and before the rates have moved up to INR12, prior to that, we have contracted certain short-term contract for our license distribution area. So, we have a fairly good power supply available for our license distribution area.
Dhruv Muchhal — HDFC Asset Management — Analyst
Got it, sir. Sure, sir, thank you so much. That’s all. Thank you.
Mohit Jalan — DAM Capital Advisors — Analyst
Thank you. The next question is from the line of Mohit J from DAM Capital Advisors. Please go ahead. Hi, sir. Thanks for the opportunity once again. Sir, couple of clarification. Are they still operating under 2016 regulations? Is there any talk of 2021 regulation to be framed in the near future?
Saurabh Mashruwala — Vice President, Finance
Currently, it is in the earlier regulation, MYT 2016 regulations, because new new embodied regulation is not yet pronounced by the regulator. It is delayed by about one year or so, so existing regulation 2016 is currently in operation.
Mohit Jalan — DAM Capital Advisors — Analyst
Understood. And sir, on the ancillary markets do you think the introduction of the ancillary markets will help our gas power plants, especially the DGEN in the medium term?
Operator
Participants please stay connected the line for the management dropped. [Operator Instructions]. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead.
Saurabh Mashruwala — Vice President, Finance
Yes. So, line got disconnected, I’m very sorry for that.
Operator
Mohit, may I request you to repeat your question once again?
Mohit Jalan — DAM Capital Advisors — Analyst
Yes. Sir, my question was, do you think the ancillary markets wherever they get introduced to this fiscal will help our gas-based power plants at the margin for our open capacity?
Saurabh Mashruwala — Vice President, Finance
Can you please repeat again?
Mohit Jalan — DAM Capital Advisors — Analyst
Sir, given that the ancillary markets are expected to be introduced sometime in this fiscal, do you think this will help our open capacity in material?
Saurabh Mashruwala — Vice President, Finance
Ancillary market, what are you, I mean what are you referring to?
Mohit Jalan — DAM Capital Advisors — Analyst
Sir, CERC is introducing the ancillary markets to supply power and delivery 30 minutes to two hour duration. So, this market is supposed to be introduced in this year and which should help the power plants, which can ramp up and ramp down very fast.
Unidentified Speaker —
So, Mohit, I think, yes. So, that would be a very useful market for us but for any power plant ramping up and ramping down for a gas-based power plant can happen if it is working at a base load doing a cold start or hot cold start and supplying for 30 minutes or two hours, would be very difficult, but yes for our SUGEN and UNOSUGEN untied capacities introduction of this market, — meaning we will have significant opportunity for us. As far as Dahej is concerned, would be very difficult to tell because it operates — it doesn’t operate on a base load compared to SUGEN and UNOSUGEN.
Mohit Jalan — DAM Capital Advisors — Analyst
Understood, sir. Thank you, sir. And all the best. Thank you.
Operator
Thank you. The next question is from the line of Bharani Vijay Kumar from Spark Capital Advisors. Please go ahead.
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Yes, good morning, sir. What is the yearly gains from LNG trading at the EBITDA level that is reflected in the gas generation segment?
Saurabh Mashruwala — Vice President, Finance
Q4 we said about INR40 crore.
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Yes, sir. So just trying to understand for the full year?
Unidentified Speaker —
Okay. So, can we give it to you offline.
Saurabh Mashruwala — Vice President, Finance
I have Q4 numbers so, we can give you offline.
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Okay. No problem. So, the idea is to understand the difference between EBITDA for FY21 and FY22 and that will predominantly be the gains from LNG, that’s my question. Okay. So, the second question is, what amount of equity, we would have spent in acquisitions this year for both the CESC and the other acquisition?
Unidentified Speaker —
If we see CESC INR300 crore of equity value, Lightsource was around INR100 crore and Visual Percept was around INR165 crore. So, if you refer our presentation we have provided those numbers in the presentation itself.
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Sure. So, the idea behind this, is to ask beyond the capex number you have guided INR1,200 crore to INR1,250 crore for franchise. What would be the kind of capex or capital going for acquisition like this in the next one to two years for renewables, especially?
Unidentified Speaker —
Bharani, first of all we don’t give any estimates and it will be very difficult to give estimates for any acquisitions per se. We keep on looking at acquisitions. Now it will be difficult to give any estimate per se for acquisition-related investments.
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Okay, sure. That’s it from my side.
Operator
Thank you. The next question is from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead.
Bhavin Vithlani — SBI Mutual Fund — Analyst
Thanks for the opportunity again. Sir, this is continuation to the previous participant’s question. Could you just help us understand the philosophy behind the acquisition because the observation is that you are actually going behind smaller assets. So, what’s the kind of valuation that we are getting. And what’s the kind of IRR we are able to generate at the prices that we are able to acquire assets?
Saurabh Mashruwala — Vice President, Finance
See in terms of IRR, we generally target about 13% IRR, equity IRR, I would say. So, that is what we generally target for evaluation of any acquisitions. And we only look at focus more on the [Indecipherable].
Bhavin Vithlani — SBI Mutual Fund — Analyst
Just a concluding question. So, the acquisition of the CESC assets or the wind assets which have been performing very poorly, the original expectation. So, where are we able to add value to see that the gap in the performance on the PLF, it can be bridged and consequently we are able to concentrate better return?
Saurabh Mashruwala — Vice President, Finance
Basically, we can make value addition by better O&M activities, better, I would say availability of the plant. So those are the area where we will work on it and we will improve availability and improve the PLF from the existing level. The plan is to improve the O&M practices and have now available for the O&M activities on a continuous basis, improve the availability of the plant by resolving the ROW issues. So, by doing this we will improve the PLF from the existing levels, that is sort of planning.
Bharani Vijay Kumar — Spark Capital Advisors — Analyst
Would it be able to share what’s the multiple on the EBITDA that we’ve been able to acquire and are we getting — are we smaller assets available at a much deeper discount to then what the transaction that we are hearing for larger assets on azure platforms?
Saurabh Mashruwala — Vice President, Finance
So, there would not be a simple answer to that, these asset would have its own valuation metrics and we’ll have to see how we can bring or add value to that proposition and derive higher IRRs. So as far as EV per megawatt is concerned, it is there in our presentation, EV per EBITDA we currently don’t have numbers ready, again all these acquisitions there are certain scope of improvement on the operational side. So, current EV-EBITDA may not be a true reflection of what we are envisaging. So, once it stabilizes it would be better to look at EV EBITDA on that number.
Bhavin Vithlani — SBI Mutual Fund — Analyst
I appreciate that. Thank you so much for taking my question.
Operator
Thank you very much. As there are no further questions. I now hand the conference over to Mr. Harshavardhan Dole for closing comments.
Harshavardhan Dole — IIFL Securities Limited — Analyst
Thank you on behalf of IIFL Securities. I thank you all for joining us for this call. Special thanks to the management of Torrent Power for letting us for this call. Thank you very much. Really appreciate it. Any final remarks, comments that you’d like to make.
Saurabh Mashruwala — Vice President, Finance
Yes. Thank you, Harsh. Thank you for the call and we thank you all of you and we thank you for the call and stay safe and healthy. Thank you so much.
Harshavardhan Dole — IIFL Securities Limited — Analyst
Thanks, Saurabh.
Saurabh Mashruwala — Vice President, Finance
Thank you.
Operator
[Operator Closing Remarks]