NHPCNSESeptember 30, 2023

NHPC Limited

6,197words
94turns
10analyst exchanges
2executives
Management on call
R. P. Goyal
DIRECTOR (FINANCE) – NHPC LIMITED
R.K. Chaudhary
DIRECTOR (TECHNICAL) – NHPC LIMITED
Key numbers — 40 extracted
16,797 million
ny is as follows:-  During the Half Year FY’24, our power stations have achieved generation of 16,797 million units as against 18,303 million units generated in the corresponding period of the previous year,
18,303 million
e Half Year FY’24, our power stations have achieved generation of 16,797 million units as against 18,303 million units generated in the corresponding period of the previous year, which is lower by about 8% i.e.
8%
million units generated in the corresponding period of the previous year, which is lower by about 8% i.e. 1,506 million units. This is mainly due to lower water availability and intense rain and f
1,506 million
its generated in the corresponding period of the previous year, which is lower by about 8% i.e. 1,506 million units. This is mainly due to lower water availability and intense rain and flood in some parts of
9,010 million
III Power Station. During the 2nd quarter FY’24, our power stations have achieved generation of 9,010 million units as against 10,138 million units generated in the corresponding period o
10,138 million
2nd quarter FY’24, our power stations have achieved generation of 9,010 million units as against 10,138 million units generated in the corresponding period of the previous year, which is lo
11%
ted in the corresponding period of the previous year, which is lower by about 11% or 1,128 million units due to reasons that I have just shared with you. Parbati-III Power Stati
1,128 million
e corresponding period of the previous year, which is lower by about 11% or 1,128 million units due to reasons that I have just shared with you. Parbati-III Power Station is now fully ope
510 megawatt
e Teesta Basin were unfortunately hit by unprecedented flash floods in North Sikkim. As such, our 510 megawatt Teesta-V Power Station and 500 megawatt Teesta-VI HE project, which is under construction, have s
500 megawatt
unprecedented flash floods in North Sikkim. As such, our 510 megawatt Teesta-V Power Station and 500 megawatt Teesta-VI HE project, which is under construction, have suffered damages. This has impacted TLDP-
91.93%
al implications of this calamity on NHPC would not be much.  PAF for Half Year FY’24 stands at 91.93%, corresponding previous period of 99.23%, which is about 7% lower. This is mainly due to lower wa
99.23%
would not be much.  PAF for Half Year FY’24 stands at 91.93%, corresponding previous period of 99.23%, which is about 7% lower. This is mainly due to lower water availability and outage of some of po
Guidance — 20 items
RP Goyal
opening
“As such, our 510 megawatt Teesta-V Power Station and 500 megawatt Teesta-VI HE project, which is under construction, have suffered damages.”
RP Goyal
opening
“4,095 Crore has been incurred during Half Year'24 against target CAPEX of Rs.”
RP Goyal
opening
“965 Crore for which we have already received the cash but due to accounting compulsion, it will be reversed in the coming period on repayment of the instalment by the discoms.”
RP Goyal
opening
“So, all these three items will be billed in the coming period.”
RP Goyal
opening
“ On physical front, as we have been sharing that the active construction work at Subansiri Lower Project site is going on in full swing, I am very hopeful that we can commission two units of the project in fourth quarter of current financial year and remaining six units are expected to be commissioned one-by-one by May '25.”
RP Goyal
opening
“The estimated cost of the project is Rs.”
RP Goyal
opening
“ In respect of Parbati-II HE project, we have achieved a major milestone towards full commissioning by the day lighting of 31.5 km long Head Race Tunnel of the project.”
RP Goyal
opening
“We are trying our best to complete the project by September'24.”
RP Goyal
opening
“The anticipated cost of the project is Rs.”
RP Goyal
opening
“The estimated levelised tariff of this project will be around Rs.”
Risks & concerns — 5 flagged
This has resulted in a positive impact of Rs.
— RP Goyal
This has resulted in a positive impact of Rs.
— RP Goyal
Unbilled debtors mainly include Impact of AFC billed as against AFC claimed as per Regulation 2019-24 including Security Expenses of Rs.
— RP Goyal
However, all assets and works of the project are ensured under Construction All Risk Policy.
— RP Goyal
250 Crore and it is fully insured through our Contractors All Risk Policy.
— RP Goyal
Q&A — 10 exchanges
Q
Yes, sir. Can you please advise that how much is our renewable portfolio? Currently, how much project we are executing? How much is already live? And what's our vision for the next two years, by the end of fiscal year'24-25?
RP Goyal
As of now, we have commissioned only two renewable energy projects, one 50 megawatt solar project and another 50 megawatt wind power project We are in the process of construction of 1,000 megawatt solar project as of now at our own balance sheet and 65 megawatt is being developed in one of our subsidiary companies, i.e. Bundelkhand Saur Urja Limited. Another 88 megawatt is being developed in another subsidiary, i.e. NHDC. And we have just won a bid for 200 megawatt in Gujarat. So this is our portfolio as of now, which is under construction in the renewable sphere. And we are not much aggressiv
Q
My question is regarding the dip in revenue in this quarter. Can you please explain?
RP Goyal
Dip in revenue? Yes. Our generation during this quarter was 9,010 million units against 10,138 million units in corresponding previous quarter. So it was down by 1,128 million units. That is why our revenue was lower in the current quarter – second quarter of current year.
Q
Yes, sir. Can you please advise regarding our portfolio of hydro, how much capacity is already live, how much capacity we are in the execution mode, and how much is, for example, in the pipeline for which the project is not yet awarded? And then can you also give, for example, what is the cost of project or cost of funds? Sorry, like total project cost, how much? And then whether everything is tied up or not?
RP Goyal
Mr. Lewis, we have already commissioned 6,971 megawatt in hydro and we are likely to commission our Parbati-II of 800 megawatt and Rangit-IV 120 megawatt in FY’24-25 and 2,000 megawatt will be added in FY25-26 by commissioning our Subansiri Lower Project 2,000 megawatt with 624 Kiru Project also in FY’25-26. In FY’26-27, we will be commissioning Pakal Dul 1,000 megawatt, Kwar 540 megawatt, Ratle 850 megawatt, and Teesta-VI 500 megawatt. And thereafter in hydro, we will commission our Dibang Project of 2,880 megawatt in 2031-32. So by end of 31-32, our total installed capacity in hydro will be
Q
Yes, sir. Thank you so much. Sir, the first question is, the levelized tariff for two projects have increased marginally although, but have increased despite the project cost remaining the same versus what you were communicating last two quarters. So what's causing this increase?
Management
So basically, you see, Parbati-II, it was earlier 6.14. It has been decreased now to coming around Rs. 6.09. So there is slight reduction in the capital cost of Parbati-II. Okay. 6.09. I thought it is 6.9. It is 6.09. 6.09. And Subansiri, we have been sharing at the same level. So, there is not much change in Subansiri, per se. And sir, the second question is the unfortunate thing with Teesta VI, I think now. So you have already spent Rs. 2,900 Crore and I think a large part of that will, you'll have to reconstruct is what our basic understanding is. So do you get the whole amount from insuran
Q
On the pump storage hydro, any of the projects where elementary study has been done and what tariff does it imply?
RP Goyal
We have prepared our PFR for Indira Sagar and Omkareshwar Project and the tentative tariff for generation, it is coming around Rs. 5 per unit and the pumping cost will be additional. What that number could be, sir? You can take Rs. 2.75 maximum. So, effectively, the overall tariff will be anywhere like Rs. 8. And this is for what period, sir? I mean for four hours, is there something like that count? Six hours. Six hours of peaking? Yes. Okay. Thanks. That was my question.
Q
Thank you for the opportunity and good performance. My question is about confirmation on our cost of equity. We expect in terms of the return on the equity around 12% or so. And the second part is overall general La Nina condition, do we expect similar situation even next year? And will that impact our generation? In case you can answer, that will be good. Thank you.
Management
Yes, certainly. So, you see, if you look at the cost of equity of the company, so that is basically your perspective, how much what you call the market rate of return. If you take 10 years, 15 years, accordingly it will vary. Accordingly, if you consider five years beta or one year beta, so accordingly it will vary. But broadly, I can share with you the cost of equity, you can consider about 12%. Okay. Thank you. And about La Nina condition, because people are expecting that even next year, the water or the rain might be lesser. So, will that impact our generation like it has done this year? Y
Q
Yes. Sir, couple of questions from my side. Firstly, in the last two quarters, our incentive income is almost nil. So, how do we see the incentive incomes in the coming quarters? Because we do see that availability factor will be lower than the last 2Q FY23. That was the first question. And secondly, sir, now we have a huge pipeline on the renewable energy side, as well as the hydro projects, pump hydro storage. So, how do we see the equity contribution? Are we comfortable position to have for equity contribution? Or we need to have some equity dilution going right?
Management
Yes. So, first question regarding incentive, Rupesh, we have been sharing that the accounting or method of recognition of incentive has been changed. Earlier, we used to recognize the PAF incentive also on monthly basis. So, we found that in later half of the year, when PAF is basically lower than even the trend of PAF in first six months, So negative numbers even goes in negative. So, that does not show the true picture of the incentive number. That is the reason we changed our accounting. Now, we will start recognizing incentive income. Definitely, incentive income would be there depending u
Q
Hello, sir. My question is more general and related to realizations. In years when we have generation more than the design capacity, the extra energy that we produce, does that go at the same realization at the same average selling price set by the regulator? I mean, the tariff or the tariff would be very low for the extra generation.
RP Goyal
No, no, secondary energy, which is beyond the design energy, it goes at the rate of maximum Rs. 1.20 per unit or the energy charges, whichever is lower. So, it is not the same rate. You said Rs. 1.20 per unit. Maximum. If the energy charges are low, then it will be at the rate of energy charges only. Understood. Thank you.
Q
Yes. So, we thank NHPC management for giving us an opportunity to host this call. We also thank all the investors and the analysts for joining this call. And happy Diwali to everyone.
RP Goyal
Thank you. Thank you, Mr. Rupesh, and happy Diwali to you and all the investor community. Thank you.
Q
Thank you so much.
Management
Speaking time
RP Goyal
26
Marcel Lewis
14
Management
14
Moderator
12
Dhruv Machal
7
Rupesh Sankhe
6
Abhineet Anand
5
Bhavish Patel
3
Mohit Surana
3
Marsal Lewis
2
Opening remarks
Rupesh Sankhe
Good afternoon everyone. On behalf of Elara Securities, we welcome you all for the Q2 FY’24 Conference Call of NHPC. So, I take this opportunity to welcome the management of NHPC represented by Mr. R.P. Goyal, he is the Director (Finance), Mr. R.K. Chaudhary. he is the Director (Technical). We will begin the call with a brief overview by the management followed by Q&A session. I will now hand over the call to management for opening remarks. Over to you, sir.
RP Goyal
Good afternoon, friends. The NHPC Board has adopted a Half Yearly financial results for the period ended 30th September’23 in its meeting held on 6th November’23 and the same has already been communicated to exchanges. By now, I hope you all would have got a good chance to go through the quarterly and Half Yearly set of numbers. The detailed number analysis of financial results of the company is as follows:-  During the Half Year FY’24, our power stations have achieved generation of 16,797 million units as against 18,303 million units generated in the corresponding period of the previous year, which is lower by about 8% i.e. 1,506 million units. This is mainly due to lower water availability and intense rain and flood in some parts of Himachal Pradesh in August’23, which has impacted the generation in the region, especially the outage of all units of Parbati-III Power Station. During the 2nd quarter FY’24, our power stations have achieved generation of 9,010 million units as against 1
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