ReNew Energy Global Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 21, 2023

There are 6 speakers on the call.

Operator

Thank you for standing by, and welcome to the ReNu's First Quarter Fiscal Year 'twenty four Earnings Report. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. I would now like to hand the conference over to Mr. Nathan Judge, Head of Investor Relations.

Operator

Please go ahead.

Speaker 1

Thank you, Jason, and thank you, everyone. Good morning, and thank you for joining us. On Friday evening, the company issued a press release announcing results for its fiscal Q1 ended June 30, 2023. A copy of the press release and the presentation are available on the Investor Relations section of ReNu's website at www.renew.com. With me today are Samant Sinha, Founder, Chairman and CEO Kadar Abhaje, our CFO and Vishali Nigam Sinha, Chairman, Sustainability.

Speaker 1

After the prepared remarks, we will open up the call for questions. Please note, our Safe Harbor statements are contained within our press release, presentation materials, materials available on our website. These statements are important and integral to all our remarks. There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward looking statements. So we encourage you to review the press release refurnished in our Form 6 ks and the presentation on our website for a more complete description.

Speaker 1

Also contained in our press release, Presentation materials and annual report are certain non IFRS measures that we reconcile to the most comparable IFRS measures and these reconciliations are also available on our website in the press release, presentation materials and on our annual report. It is now my pleasure to hand it over to Sumant.

Speaker 2

Yes. Thank you, Nathan. Good morning, everybody. I'm glad to have you all on our Q1 FY twenty twenty four earnings call. In a couple of days, we will be commemorating the 2nd anniversary of our listing on NASDAQ, A significant journey that has been made possible by the support of all of our stakeholders and the dedication of our committed employees.

Speaker 2

As we approach this milestone, I extend my heartfelt gratitude to all our stakeholders, which includes our investors and analysts, our Board members, The domestic and international banking and lending community, our business partners, regulators and government authorities in India and abroad, Multiple customers and off takers, whom we have the pleasure of serving, our suppliers and technology providers, global rating agencies, Multiple contractors and agencies will make the execution of projects possible on the ground and of course, Our employees have been instrumental in our achievements thus far. This anniversary provides an opportunity to reflect upon our journey so far. There has been significant growth in the last 2 years. Despite all of the considerable hurdles, including COVID, Supply constraints and inflation, our operating portfolio has grown from 5.7 gigawatts to 8.4 gigawatts since Q1 FY 2022, an increase of about 47%. Our portfolio grew by over 3 gigawatts during that time.

Speaker 2

And importantly, we inked all the PTAs on essentially all of our megawatts in our portfolio, Thus lowering the offtake risk on our growth outlook considerably compared to 2 years ago. Our trailing 12 months adjusted EBITDA has risen by 41% and our run rate adjusted EBITDA Increase even more on about 60%. In addition, we have improved our DSO significantly, Cutting the time to get paid by more than half from over 260 days to around 114 days, that's 114. And we believe that there is some further scope for improvement. Not only this, but we have been recognized as one of the top rated ESG companies globally by several rating agencies.

Speaker 2

Moving to the highlights for the quarter on Page 6. Let me begin by delving into the strategic partnerships with global industrial leaders that are propelling our growth. We recently signed an MoU with Petronas' renewable energy arm, Gentari, for evaluating the joint development of 5 gigawatts of renewable energy assets. We believe that this and other partnerships that we have executed over the past 2 years, forged with globally recognized industry leaders, Thus illustrate our differentiated competitive advantage. This endorsement also underscores the value of collaboration in the pursuit of sustainability, while providing lower cost capital.

Speaker 2

In addition, we have recently inked MOUs With PSC and REC, which are Government of India owned financial institutions to fund the power sector, for debt funding of approximately US7.8 billion dollars combined. Furthermore, We have secured a financing arrangement of $230,000,000 from the State Bank of India for our Peak Power project. These financial partnerships enable us continued access to among the cheapest project debt in the country at a much faster pace and a larger quantum. In the Q1 of the fiscal year ended 2024, we commissioned 415 megawatts related to our B2B segment. And we are poised to commission between 1.3 to 1.7 gigawatts of projects during the remainder of this fiscal year.

Speaker 2

Our Peak Power and RPC projects Standout is our most extensive and complex undertakings to date, as well as significant contributors You are expected 35% plus EBITDA growth next year. I am pleased to report that Production progress for these projects remains on track and we are confident of meeting the guidance provided with our Q4 FY 2023 results. The conducive auction market along with a higher rate of auction continues to yield favorable outcomes in auction wins with attractive IRRs. Year to date, we have secured approximately 3.5 gigawatts of additional capacity On another 25% above our current 13.7 gigawatt portfolio, setting the stage for another leg of growth above the 45% in adjusted EBITDA growth over this fiscal year. This momentum is set to continue As we strategically engage in auctions that provide opportunities for attractive returns, it is important to note that these megawatts I'm not yet incorporated into our portfolio, but we do expect to include them in our portfolio and adjusted EBITDA run rate guidance over the next 6 to 9 months as we sign these PPAs.

Speaker 2

We are beginning to see the value of the platform being converted into results as well. We reported profit after tax of $36,000,000 while the highest we have ever made in any quarter and put on track to be around Breakeven in profit after tax on an annualized basis going forward, subject to the stability of currency and interest rates. Overall, the Q1 results for EBITDA were marginally higher and on that substantially higher than our internal budget. Turning to Page 6. I am pleased to share with our investors that our asset recycling initiative remains on a positive trajectory, effectively addressing our equity capital needs for our recent wins.

Speaker 2

A notable development on this front, as I said, Is the MoU that we have recently entered into with Gentari for exploring joint development ventures Encompassing 5 gigawatts of renewable energy assets, the partnership provides us with clearer visibility on the source of capital for future growth and demonstrates the capital discipline that we have committed to our investors. Our commitment to advancing energy transition solutions for our partners remains steadfast. This strategic partnership It is in addition to the 403 megawatts deal that we signed with Zintari earlier in the year for which we have realized the equity proceeds during the current quarter. Our intention is to build 3 to 4 gigawatts each year, and we believe we will be able to fund that equity through the current cash on our balance sheet as well as through our internal cash flow generation. It is important to reiterate that we had no intention of issuing shares.

Speaker 2

We expect that Asset Recycling will provide the equity funding for the next stage of growth that we alluded to before. Not only does Asset Recycling provide a lower cost of equity than issuing shares, it also provides us better returns on capital employed in the long run and illustrates that the inherent value of the portfolio is significantly higher than the implied multiple of our stock. The funds generated through our asset recycling efforts continue to fuel our growth trajectory, which has been sustained over the past several years. Our focus remains firmly, therefore, on this strategy designed to bolster our balance sheet and to enhance returns for our shareholders. Till date, we have successfully secured $550,000,000 of equity through strategic partnerships, including the equity funding of the 4 0 3 megawatt project from Gentari.

Speaker 2

We have raised funding through partnering with global leaders such as Gentari, Mitsui, Norfund and other valued investors. Additionally, we are considering a sale of 100 megawatts of solar assets in Karnataka And I classify the related assets as held for sale in our accounts. We expect the closure of this deal by the end of the calendar year. Moving to Page 8. As we mentioned in our last quarter earnings call, a significant development I heard earlier this year when the Ministry of New and Renewable Energy unveiled an ambitious calendar outlining We plan to auction 50 gigawatts of renewable energy projects every year.

Speaker 2

This announcement has triggered a surge of activity And notably, there has been a substantial uptick in the frequency of auction announcements spanning various renewable energy segments, In particular, complex projects. We are seeing less competition in many recent auctions, resulting in higher implied IRRs for bids that are clearing, And this trend is even more obvious for auctions for complex projects. Our in house wind and solar EPC capabilities And supply certainty provided by our now operating solar module plant provide us a distinct edge. As a testament to this, we have successfully won auctions for 3.5 gigawatts of projects above our current portfolio and expected IRRs that are at the high end and possibly even above our current portfolio At our target range, the wins include a 400 megawatt project with UB and L at a tariff of INR 2.71, for which we have signed the PPA a few days back and this project is not yet included in our committed pipeline. Turning to Page 9.

Speaker 2

The current reporting period has seen the successful commissioning of 415 megawatts of projects, primarily related to our corporate TPA business. With regard to our RTC and Peak Power projects, which represent about 3 fourths of Our expected 35% EBITDA growth next year, I am pleased to announce that the projects are approximately 2 thirds complete And we are confident about the commissioning schedule provided in our guidance earlier this year. We do expect to reach our 1.75 2.25 gigawatts commissioning guidance by the end of financial year 2024. Turning to Page 10. Our manufacturing plant commenced module production in June 2023 and is now at full production.

Speaker 2

Our 4 gigawatt facility will provide us with an assurance of module supply, streamlining up project construction efforts and giving us a competitive cost advantage relative to imports or Further, the facility will help us in controlling the quality of output, ensure self sufficiency by minimizing reliance on OEMs And potentially save O and M costs. For most of our competitors, getting solar modules is currently an issue. There is at this point a significant supply deficit in the country compared to the demand that exists right now. And most of what is being produced is either being exported to the U. S.

Speaker 2

Or is meant for internal consumption or is old technology and high cost. Importing is not a good option either as there are significant import taxes or is not allowed by the non tax import barrier of ALMM, which of course, as you know, has been deferred till early next year. Porting modules locally is a challenge for nearly all of our competitors. Our solar module plants will not only ensure stable supply, but could also provide us with a cost advantage. With that, I would like to turn it over to Kedar to go over the latest financials.

Speaker 2

Thank you.

Speaker 3

Thank you, Sumant. Turning to Page 12, the Indian government remains steadfast in its commitment to establishing robust framework for facilitating the funding of sizable projects at highly competitive interest rates. The timely closing of financing is a critical factor, as you know, in project completion schedule and cost efficiencies. The MoUs for US7.8 billion dollars we signed with Power Finance Corporation and Rudall Electrification Corporation holds significant importance to us. Not only do they bolster our credibility in the Indian renewable energy industry, They also illustrate our strong relationship with these institutions.

Speaker 3

We expect debt financing at more favorable terms than those currently prevailing in the market. Furthermore, these agreements are poised to have the way for securing substantial funding for projects with larger capital requirements And collaboration with these entities reinforce our commitment to optimizing financing avenues, thereby advancing our projects towards completion on time and with enhanced cost effectiveness. I'll now move to Slide 13, which provides The highlights of the Q1 of the fiscal year 2024. Overall, the quarterly performance was in line and, in fact, marginally higher Dan, our interim budget, and we are on track to meet our guidance for the fiscal year. We reported a profit after tax of US36 million dollars as compared to a loss of US1 $200,000 last year.

Speaker 3

The reported profit is one of the highest ever reported by us. Our installed capacity increased from 7.6 gigawatt in Q1 FY 'twenty three to 8.4 gigawatts in Q1 FY 'twenty four, increase of 10% compared to the same quarter in the previous year. Wind PLFs were lower compared to the levels Thanks at $2.27 million or 8 percent lower than last year, primarily on account of low merchant revenues, wind PLFs and higher expenses, which were planned. As stated previously, the Q1 FY 'twenty four EBITDA is slightly ahead of our rental budget and was factored into our fiscal 2024 guidance. Turning on to Page 15, our efforts to improve collections and past due receivables from the state distribution companies continue to show results.

Speaker 3

The DSO further improved 214 days from 232 days for the same period a year ago, an improvement in our collection cycle of over 2 months. Our efforts to reduce the amount of time it takes to get paid generated about $108,000,000 in our cash flow over the past 12 months. As state, DISCOMS continue to make payments on overdue amounts and all our growth is with entities that pay on time, we do expect DSO days to contract further over time. Going through a summary of our balance sheet on Page 16, we have close to $834,000,000 in liquidity, including cash and bank balances. During the current quarter, we raised close to $397,000,000 in debt, and our current mid date stands at INR At $5,800,000,000 On the following slide, we have provided more details around our sources and uses To fund the CapEx to complete our 13.7 gigawatt portfolio.

Speaker 3

Please note that we expect to be able to fund our portfolio with cash on our balance sheet As well as internal cash flow generation, and we have no intention of issuing shares for developing the current pipeline. With that, I would like to turn it over to Vaishali to talk about our ESG initiatives.

Speaker 4

Thank you, Kibar. Now turning to Page 19. As many of you know, at Renew, we have an ESG committee at the board level, Which highlights how important sustainability has been at Renew and continues to be. Renew is one of the pioneers in the industry to disclose Scope 3 GHG emissions through an inventory based approach across all relevant categories in our annual report and CVP submission. In fiscal year 'twenty three, with the deployment of robotic cleaning and condition based module cleaning, we saved about 313,000 kiloliters of water, which is an improvement of about 48% year on year.

Speaker 4

We have achieved carbon neutrality for our operations across all our sites 3 years in a row now. For our SPTI net zero target, we have a 4.8% reduction in scope 1 and 2 emissions In the 1st year of disclosure, there has been significant progress in avoided emissions powering about 4,800,000 homes with clean energy For fiscal year 2020 3, marking a 20% year on year increase. In recent times, biodiversity has evolved into a pivotal concern Within the renewable energy sector and with this in mind, we are glad to announce the release of our biodiversity policy for renewal. Our CSR journey began in 2014 and since then we have benefited the lives of over 1,000,000 people Across 500 plus villages in India spanning over 10 states across the country. Now let's turn to Page 18, where I would like to switch to the specifics of some of our efforts.

Speaker 4

Lighting lives. This is an initiative where we electrify schools with less than 3 hours of electricity using solar off grid. Since we have electrified 120 schools and established 54 digital learning centers. We have recently entered into a long term partnership with HSBC to electrify 75 schools across our areas of operation, Women for Climate. In this program, our efforts include more women in the energy sector.

Speaker 4

We have programs on green skilling in partnership with UNEC, which is the United Nations Environment Program. We are skilling Physico women's first and our farmers in Gujarat to become renewable energy technician. Community Based Water Management. In this program, in arid regions of Rajasthan and Gujarat, we've deepened 10 Lakes constructed 120 tamskar and have excavated 18 waterfalls across these regions to provide access To drinking water to communities, which is a critical need of it, we have kick started the fiscal year 'twenty four disclosure cycle With the submission of CBP Climate Change, over the next couple of months, we will also be releasing our fiscal 2023 sustainability report and look forward to sharing the highlights of this in our next earnings call. With that, I'll turn to Sumant for comments on our fiscal year 'twenty four guidance.

Speaker 2

Yes. Thanks, Rishali and Kedar. The Q1 was in line with our internal budget, and we are on track to achieve our fiscal year 'twenty four guidance, and we are confident about our run rate numbers. While we are focused on delivering the projects in the current fiscal, we have started executing the plan for the remainder of the pipeline that is due for completion towards the end of FY 'twenty five. With regard to our buyback, we have repurchased 34,500,000 shares to date, which represents about 32% of the free float At the time of listing, we have about $35,000,000 of authorization remaining, which would represent about 5% to 7% of the total CCOs.

Speaker 2

With that, we will be happy to take questions. Nathan, over to you.

Operator

Thank

Speaker 2

you.

Operator

Sinclair from Roth and Payam. Please go ahead.

Speaker 5

Yes. Hi. Thanks for taking our questions. So first off here, I was wondering, could you talk about the projects that were completed in Q1? It looks like those projects were Completed ahead of the targeted COD dates.

Speaker 5

So just wondering what may have enabled you to complete those projects earlier than expected? And then also looking at your other project timelines, it looks like 300 megawatts of utility scale solar projects will move forward in terms of their COD dates About a year. So maybe you just speak to project timelines in general. Are you seeing them shorten? And what might be driving that trend?

Speaker 2

Sure. Thank you, Justin. Always good to talk to you. Look, I'll answer the question in general. And then for the specific project that you referred to, I'll defer to Nathan also that.

Speaker 2

Look, as far as project execution timelines are concerned, I wouldn't say that there's been any dramatic change in terms of pulling Going forward, in general, all the times are shortening. I think a lot depends on the Overall availability of transmission, land and so on. And that I would say is going as per plan. At this point, it could be that there are a Couple of projects here and there, where maybe we were able to quit in the land acquisition process or something like that. And therefore, we might have speeded them up.

Speaker 2

But there is no I wouldn't say that there is a systemic improvement in timelines at this point in time. As far as the Q1 of project commissioning is concerned, yes, we did put in a lot of effort to make sure that we got those done In the month of June itself before the monsoons really started because there are ones that happen when construction becomes a little harder. So we did put some extra effort behind making sure that those projects would get commissioned in Q1 itself. So one just to sort of segue into another area, of course, one important thing that is happening is that volume prices have gone down quite substantially. And in some ways, this is actually a very, I think, strongly reaffirmed the plan that we had of postponing execution from last year, Because now we are seeing module prices coming down very, very shortly and that is actually helping us decrease CapEx of our solar plants very substantially.

Speaker 2

As you know, now we're getting mono PERC modules per watt at a price of about $0.15 to $0.17 Which is just unbelievable because compared to last year, we were getting margins at $0.24, dollars 0.25 Prices have come up very dramatically since then. So that's really, really, I think, just put into a stark Sort of affirmation of the fact that we have taken the decision to dispense all the plans and that is really benefiting us now.

Speaker 5

Okay, great. That's helpful. And then maybe just shifting to the 3.5 gigawatts You had won at auction year to date here. I was wondering if you could just talk through the timeline there. When could you potentially sign the PPAs?

Speaker 5

And then when could the COD dates likely be for that capacity? And then this is a very significant amount of In a short period of time here, does that affect your plans for bidding going forward? Because I know You're kind of targeting a 3 to 4 gigawatt per year run rate. You're already there essentially with the capacity that you've won at auction. So Just wondering how we should think about things moving forward?

Speaker 2

Yes. So This 3.5, as you know, we've done in the last few months. Most of that is to be commissioned in FY 26. So if you think about our current pipeline of 5 odd gigawatts that we have committed right now, that will be getting constructed FY 'twenty four and FY 'twenty five mostly. And all of this 3.5 will be getting done in FY 'twenty six.

Speaker 2

In a way, it just moves forward our execution pipeline to 1 more year. And as you know, these are just the first projects that have been auctioned this year. We're just barely starting the government's program of 50 gigawatts for the year. There's another 43 gigawatts of auctions that have been announced that have not happened yet, which will be happening in the remainder of the year. And if you go with our regular market share of 10% to 12% or thereabouts, then you should expect that we can pick up a lot more capacity out of that.

Speaker 2

Now the question for us, of course, is, as you rightly said, when will that be killing commission and will be ready for execution. And so the future projects that come up will probably be towards the second half of the FY 'twenty six or FY 'twenty seven. And so to that extent, We might selectively win some more projects from this point on in the next few months just to make sure that we have sufficient sort of Capacity build out happening into FY 'twenty seven as well. CPA signing, to your question on that, does take a few months. It also depends on the nature of the project.

Speaker 2

Out of that 3.5, as you know, 400 megawatts With the Gujarat government has just been signed already, so that actually should go into our committed pipeline. But there's another 3 different projects that are there that account for the balance of 3 gigawatts. 2 of those are straightforward solar projects, where there is various adoption by the regulator that is in the works right now. And the third one is a project which is another complex project that amounts to about 2 gigawatts. And that is something that take a little bit more time because that's by nature that being a complex project does require the utilities to do a little bit more homework Before they can go ahead and find the PPA.

Speaker 2

So that will take a few more months, most likely to get done. And so that's really where we are. And the 2 year time line starts from the date of signing the PPA. So assuming that these PPAs get signed between now and the end of the year, then we'll have till FY 2026 second half of the year To do most of these projects in. And then as I said, we have more rigs that we win hopefully going into FY 'twenty seven after that.

Speaker 2

So I think the point is that the market opportunity continues to be very robust for us. And so it's really a question for us now of how much capacity do we want to pick up and what time to manage our execution timelines well. And the IRRs on these projects are also very healthy because obviously with the number of auctions that are going on, everybody is getting really As much as they have the ability to execute or they have capital for and that is leading to heavier IRRs. Thank you, speaking.

Speaker 5

Okay. Appreciate it. Thank you.

Operator

And our next question comes from Michael Nijaniya from Bernstein. Please go ahead.

Speaker 2

Yes, hi. So my first question is on the Stanfill agreement. If you could please share some color on what was the rationale or motive behind that? The statute agreement between the company and the CDP, you say? CDP, correct.

Speaker 2

I mean, the logic there really was that CDP, as you know, of course, is already 52% economic owner of the company's shares. And as for the shareholders agreement, they wanted to get An additional board seat. And essentially, the board said that, look, I think as let's make sure that You do not continue to increase your ownership in the company without doing something which is A much broader kind of an offer to all shareholders. And so then it was just for that purpose that the Stanson agreement was put into it. And frankly, Nikhil, this is quite common among various companies that did the largest shareholder, Such transfer agreements are agreed to.

Speaker 2

And so really that's why our Board was advised by I'll console that such an agreement with our largest shareholder would actually be quite both standard and also would be protective of minority shareholders. Got it. Understood. Thank you so much. The second question is then on future plans on Three activities can be wafer manufacturing, 1 is the pre light feed second is merchant capacity, if any plants and third is farm storage.

Speaker 2

If you could share your color on any plants on these 3? Yes. So on manufacturing, as you know, we talked about the fact that our gigawatt module plant is now commissioned and fully running. We are also setting up 2 gigawatts of additional module capacity in Hodeira, Along with 2 gigawatts of cell capacity, the module capacity will be ready by early next year, taking our total module capacity of 2.6 6 gigawatts. Our self capacity will be ready towards the second half of next year.

Speaker 2

And then the PLI build win that we have was, as you know, for 6 gigawatts of wafer cell and modules. And therefore, the balance out of the wafers and the cells, we are looking at right now. And the appropriate time, we'll consider this forward with it. So that's where we are on the module part on the solar manufacturing part. The second question that you asked was around sorry, can you just repeat, Mikhail, if you don't mind?

Speaker 2

Sure, Sumit. That's merchant capacity. Any plans for the merchant renewable capacity? Yes. Yes.

Speaker 2

And the third is around PSP. So on merchant capacity, the reality is that as you know, the expectations in the Indian market are that we'll be running into Significant deficit on the peak power and power demand Growth in India is very robust, as we all know. We also know that new capacities in thermal, while we might get planned, will take several years to We actually come on stream. And so our sense is that there is going to be a fairly significant deficit in the market for the near term. So merchant capacity is something that we will be doing in 2 ways.

Speaker 2

1 is we will be setting up certain dedicated merchant projects To a certain percentage of our portfolio. The second thing is that we will also have merchant exposure To our peak power project, where there will be some overflow to our RTC projects. And actually, the third way is that We will also be setting up projects, which we will then potentially, depending The PPA side then apply to PPAs, whether corporate or second. And so for some period of time, we will take advantage By commissioning and earning and essentially getting exposure to the merchant market, there we expect prices will be significantly higher than In the PPM market. So by a combination of those mechanisms, we expect to get exposure to the merchant market, which we believe will be significantly value accretive for us in the short run.

Speaker 2

And now with Tekin now coming out with a view that You can construct the project and then essentially later on dig that into a PPA. We'll have the flexibility as we believe over time To then potentially move those some merchant to PPA as well. And that's a call that we can take in the future depending on how the market evolves. So I think the merchant exposure is going to, in our view, give us some reasonable upside On our PPA revenues in the next few years' time. And that is why we will increase our exposure to the merchant market through These three mechanisms that I outlined above.

Speaker 2

As far as PSP is concerned, look, I think there is a general perception in the market that DSP is absolutely essential for Chief RTC. And that is something that I would like to say that that is not the only way to get the cheapest RTC power. We have won several projects for RTC bids by using a combination of solar and wind and a small amount of storage. Now this requires, so the position you can get is either solar and pumped hydro All you can get solar, wind and batteries by upscribing the wind in the project and having, as I said, a small amount of battery. We have found that, that solutioning or that different alternative construct gets us to very competitive RTC prices, Okay.

Speaker 2

And because we do everything there for in house between the veins, solar and the batteries, we are able to make sure that the construction time lines are coordinated And are done in the most optimal manner, okay? And therefore, I think I would just like to pay for everybody's benefit that is fact This is something that does give us a pretty significant advantage in the market compared to other models that are out there where the pump hydro is divorced from the Arie thought, and therefore, it's all I don't have to put together. Having said that, we do believe that there is a significant boom for pumped hydro In the Indian grid, as we go forward, especially for the long duration storage that we do require. And therefore, like a lot of other folks, we are also looking at developing a couple of pump hydro projects over a period of time. However, most of these pump hydro Projects that are now in construction or development will take several years to come on stream.

Speaker 2

And those will not be in some way syncable with or synchronized with Some of the RTC bids that are coming up, which require to be constructed in the next 2 years' time. And so I think even in the short term, you'll see more RTC projects being constructed With wind, solar and batteries than necessarily with pump hydro. Now over time, as I said, there is a role for Pumped hydro to play and therefore we are also developing pump hydro projects for looking at the future of the group. Okay. Anshooman, very clear.

Speaker 2

Just 2 more questions from my side. One is on The Andhra Pradesh receivables, so firstly, great to see them come down to such a level from over 200 last year. But now if I look at it going forward from Andhra Pradesh, please correct me if I read it correctly, there's still a receivable DSO of 3.71 days. So should we understand that while they have paid the installments, but they have stopped paying future billing done since So this all started happening? So the issue the core issue still remains?

Speaker 2

Am I correct to read that? No, Mikhail, That's not correct. What they have been doing is in fact not just them, but all states have not just been paying their own outstanding as per the agreement that they had With the Central Government under the late payment such as fee, but all the states have also been paying their current dues that have been or the current billings that have been done. Now the question then of course is why does AP has such an old outstanding, also the loan outstanding and that's a fair question. The reason is that 3 years ago when they had actually disputed the contracts, at that point they had also Distributed 30 clauses of the contract 30 clauses of the contract.

Speaker 2

And while they paid the bulk of it, Those 2, three things that are still outstanding still have to get resolved. Now what are those 2, three things? One is the fact that They have said that for GDI, which was the deletion based incentive that since the center was paying that, This is equal to about 50 basis per unit. That base will not be paying that. And so that, for example, forms or is a reasonable amount of capital that is still So we need court sort of court processes to go through on these couple of items to get them to pay the holdout spend.

Speaker 2

So that really is really the issue. Our sense is that all of those things will get resolved, but it's just that we have to go through court process to Get some of those things done because those payments, they had put into dispute some time ago. And there are these as I said, there are legal proceedings that are going on on this. So those will get resolved eventually and those payments will also happen. But it is not because they're not paying the current billings, they are, And so are all the other states as well.

Speaker 2

Great, great, great. Good to hear Ashwin. This one last question then was on Number of employees, so I think I missed this last time. Since annual reporting, I see the number of employees have gone up from about 1,000 on average for FY 'twenty one To 2000 now, while I understand, I mean, this is largely as renew enters manufacturing and other areas and capacity grows. How do we see this going forward?

Speaker 2

Do we see this continue to rise as hydrogen becomes sizable and More opportunities come or how are you looking? Yes. So look, first of all, we're very focused on cost Because obviously, we have to look at our manpower productivity and manpower costs, that's very critical. And that's something that we're monitoring very, very carefully, okay? But you're right that most of the people increases are happening, primarily on account and manufacturing, Because obviously, these are more people intensive areas than the projects businesses.

Speaker 2

And so a lot of the growth is going to happen in that area. So as we build out Our module side and then the sell side and the wafer side eventually, then we will have a lot more people coming into the company As a result of that. Now exactly how many will depend on the pace of the rollout. So I can't give you a number for that. Yes.

Speaker 2

So that's as far as manufacturing is concerned. As far as things like deal hydrogen are concerned, of course, we have a development And business development team for that, project development and business development team for that. But that's not that many people, Because as you know, most of the execution eventually will sit in the RE arm of our company, given that most of the Capital is going to go into renewable energy part. And then, of course, there'll be some of the electrolyzer part, but we'll hire those people only when we get to Execution for those areas. We will not be obviously hiring those people in the beginning itself.

Speaker 2

So we do have some pieces of project development or business development, but that's Like in the tens. It's not even in the hundreds. It's smallest numbers. So I think that's really where things are right now. And then depending on the rollout of the business, In a fairly cost managed way, we will think about hiring more people.

Speaker 2

Thank you so much. Thank you so much for answering the questions. Yes.

Operator

This concludes the question and answer session. And that does conclude our conference for today. Thank you for participating. You may now disconnect.

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Earnings Conference Call
ReNew Energy Global Q1 2024
00:00 / 00:00
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