Orient Green Power Company Ltd — Q4 FY26

Orient Green Power Company Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=z_fJ3ZF1t_s Published: 15 hours ago

0:01 1 second Good morning ladies and gentlemen and welcome to the earnings conference call for Q4 and FI26 for Orient Green Power Company Limited. 0:11 11 seconds Orient Green Power Company Limited headquartered in Chennai is one of India's leading independent renewable power producer. 0:20 20 seconds The company operates over 380 megawatt of BIM power capacity across key Indian 0:26 26 seconds states and a 10.5 megawatt BIM power in CRIA. 0:32 32 seconds Also, the company developed a 7 megawatt solar capacity in Q3 FI26. 0:39 39 seconds As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the management discussion concludes. 0:49 49 seconds Should you need assistance during this conference call, please signal an operator by pressing star followed by zero on it at stonefall. 0:59 59 seconds Let us now begin with the introduction of the management team. We have with us today Mr. T. Shivaraman, managing director and CEO of the company. 1:10 1 minute, 10 seconds Also joining us today is Miss J. Koteshwari, chief financial officer. I would now like to request Mr. T. 1:18 1 minute, 18 seconds Shivadamin, managing director and CEO to give his opening remarks and share the company's performance in Q4 and FY26 1:27 1 minute, 27 seconds with the audience. Thank you and over to you sir. 1:32 1 minute, 32 seconds Thank you. Good morning everyone. I'm pleased to welcome you all to the Orient Green Powers earnings call for FY26 as well as Q4 of FY26. Thank you for taking 1:41 1 minute, 41 seconds the time to join us and your continued faith and support in our journey. 1:46 1 minute, 46 seconds FI26 was a breakthrough year for the company with many firsts. Uh we commissioned our first uh solar power 1:53 1 minute, 53 seconds plant of 7 megawatts capacity uh in December 25. Uh and overall in FY26 we achieved the highest profits in the 2:02 2 minutes, 2 seconds history of the company. The favorable wind patterns in the first half of the year as well as the refund of excess interest charged in earlier periods uh 2:11 2 minutes, 11 seconds helped offset slight reduction in wind and performance dip in the fourth quarter uh due to lower wind availability. Overall we have been able 2:19 2 minutes, 19 seconds to achieve as I said the highest uh net profits in the history of the company. 2:23 2 minutes, 23 seconds Uh we have successfully added 9.5 meg 9.9 megawatt of wind capacity in this uh 2:31 2 minutes, 31 seconds fiscal 6.6 26 was added in end of March 26 and 3.3 added in April 26. Uh we are 2:39 2 minutes, 39 seconds uh also under in the process of constructing 17.6 megawatt of solar capacity which will be commissioned in Q1 and will probably will enter full uh production uh during the course of Q2. 2:52 2 minutes, 52 seconds In order to improve operating efficiencies we have uh uh started the process of repowering 7.8 8 megawatts of 2:59 2 minutes, 59 seconds our older wind turbines under the new uh repowering policy of the government of Tamil Nadu. Uh this was uh pending for 3:06 3 minutes, 6 seconds quite some years because the policy was not uh conducive to repowering. But with the uh with the uh uh with the new 3:14 3 minutes, 14 seconds policy in force, we are proactively looking at all our other older wind assets to see which will benefit from repowering either purely with wind or 3:24 3 minutes, 24 seconds with hybrid of wind and solar. the financial and liquidity position of the company is uh improving and uh the credit rating and outlook have also been 3:33 3 minutes, 33 seconds enhanced for its uh key subsidiaries during the course of this year. Now quickly running through the performance highlights for FI26 the total income and 3:42 3 minutes, 42 seconds IITA was around 316 crores and 206 crores respectively. is about 13% and 10% over improvement over FI25. A PAT 3:51 3 minutes, 51 seconds grew by 70% to 72 gross uh which is the highest in the history of the company. 3:57 3 minutes, 57 seconds Other than the better wind and the refund of excess interest, we also had a sign significant reduction in interest costs by about 21%. due to both decline 4:05 4 minutes, 5 seconds in overall debt and uh 45 basis points reduction in uh the interest rate in our largest uh loan. 4:14 4 minutes, 14 seconds Q4 of FY26 uh the wind availability was uh somewhat lower compared to the similar period in the previous year uh 4:22 4 minutes, 22 seconds which is not unusual given the higher wind that we had in Q one and Q2 Q1 to Q3. 4:30 4 minutes, 30 seconds uh the generation from the solar power plant and the interest cost savings partially absorbed the uh reduction in 4:37 4 minutes, 37 seconds generation from the wind assets. So total income and ITA were marginally lower at 46 crores and 18 crores respectively compared to Q4 of previous 4:45 4 minutes, 45 seconds year and loss before exceptional items and tax was at about 16.4 crores during this quarter as against 14.7 crores for the compared to period last year. 4:56 4 minutes, 56 seconds Operationally, the wind assets continue to perform reliably through the wind season and we are all ready and waiting for the upcoming wind season which 5:03 5 minutes, 3 seconds should start by the end of uh May. Uh the 9.9 capacity that has been recently commissioned will be fully available for 5:10 5 minutes, 10 seconds this win season. The generation from the uh company's solar power plant will also be available throughout this fiscal. So the full expansion full effect of these 5:19 5 minutes, 19 seconds expansions will be seen from this fiscal onwards. 5:23 5 minutes, 23 seconds Uh the new capacity of 17.6 6 megawatt of solar as well as the repowering of the wind will also uh show start showing 5:31 5 minutes, 31 seconds uh uh results during the later half of this fiscal. 5:39 5 minutes, 39 seconds The as I said earlier we are looking at all our older capacity wind turbines uh older vintage wind turbines 5:47 5 minutes, 47 seconds to see which would benefit from the repowering policy and uh during the course of this year we will definitely look at uh adding more such repowering 5:56 5 minutes, 56 seconds policies to our portfolio. As at FI26 we have about 399 megawatt of operating capacity consisting of 392 megawatt of 6:03 6 minutes, 3 seconds wind and 7 megawatt of solar. uh the capacity additions and repowering is already discussed earlier. So we remain 6:11 6 minutes, 11 seconds focused on operational excellence prudent capital allocation while maintaining a healthy balance sheet. Uh 6:18 6 minutes, 18 seconds we believe that moving to the higher capacity turbines as well as diversifying to solar will d to a great extent diversify our uh uh income 6:27 6 minutes, 27 seconds sources and our generation and it will build a sustainable and balanced efficient portfolio of renewable assets 6:33 6 minutes, 33 seconds going forward. So overall FI26 is a good year and uh it's laid laid laid for us a good base for us to take it forward in 6:41 6 minutes, 41 seconds the years to come. Thank you for joining us today and we appreciate your continued support. Look forward to your questions. Thank you. 6:52 6 minutes, 52 seconds Thank you very much. We will now begin with the question and answer session. 6:57 6 minutes, 57 seconds Anyone who wishes to ask a question may press star and one on the touchstone teleport. 7:05 7 minutes, 5 seconds If you wish to withdraw yourself from the question queue, you may press star and two. 7:12 7 minutes, 12 seconds Participants, you are requested to use handsets while asking a question. 7:17 7 minutes, 17 seconds Ladies and gentlemen, we will wait for a moment while the question. 7:26 7 minutes, 26 seconds A reminder to all. You may press star and one to ask a question. 7:49 7 minutes, 49 seconds A reminder to all the participants. You may press star and one to ask a question. 8:00 8 minutes We will take the first question from the line of Cecil Hava from HG Havayan company. Please go ahead. 8:07 8 minutes, 7 seconds Uh so sir, we had previously also said that our target is now to reach reach 1GW of renewable energy. Uh so with uh 8:16 8 minutes, 16 seconds the uh where will the equity of this coming from and uh are we still looking at a 8:23 8 minutes, 23 seconds preferential uh issue or uh we will now look at it as as a rights issue and do we still want to uh do it as a take take 8:33 8 minutes, 33 seconds over assets which are available in the market or we are now looking at some other way to do it. 8:40 8 minutes, 40 seconds We are looking at all options. uh obviously the fastest place to acquire operating assets and uh there are a few things which are working. Unfortunately 8:48 8 minutes, 48 seconds with the market the way it has been over the last uh few months uh our uh strategic initiatives have slowed a 8:55 8 minutes, 55 seconds little but we are hoping that things will stabilize and we can we can start moving to the next next level on this which is why in the last quarter we've 9:03 9 minutes, 3 seconds been focusing mostly on internal projects uh while the strategic uh stuff is kind of uh working on and waiting for uh situation to improve. 9:14 9 minutes, 14 seconds But sir, how will we do the final thing? 9:16 9 minutes, 16 seconds If it does something come, we'll come to that when we have the for kind of clear project in hand, we will uh we will come back to you. There are multiple options. 9:25 9 minutes, 25 seconds Is there a timeline to it? Because uh in previous corns also we have mentioned that. 9:32 9 minutes, 32 seconds Yeah, I'm I'm not in a position to give you a timeline right now. I think the market is a little too volatile for that. So uh I we will should be able to 9:41 9 minutes, 41 seconds give you some answers in in the next quarter or so. But uh sir as such uh with your promoter stake 9:50 9 minutes, 50 seconds also you are very much constrained uh that you know to do so 9:56 9 minutes, 56 seconds I mean to to me it looks almost impossible that we will be able to reach this 1gw uh target. So is this target 10:04 10 minutes, 4 seconds even now on or do we now take it as a three-year target from today? 10:11 10 minutes, 11 seconds See the target is on how we achieve it with while still retaining control of the company is something that we are looking at. Uh and like I said we we 10:20 10 minutes, 20 seconds will you we will need to wait before we come to any answer on this. 10:25 10 minutes, 25 seconds Uh so sir can we take it from the management that if if we are not going to buy any new assets so this uh almost uh no 10:34 10 minutes, 34 seconds whatever that we have will will it be used to repay the loans and uh make the company at least debtree so that the shareholder can at least get some dividend. 10:44 10 minutes, 44 seconds No see the loan repayment keeps happening. uh the in fact the our loan uh terms are such that most of the 10:51 10 minutes, 51 seconds surplus cash flow is used to repaying the loans. So the availability of especially on our main loan and the main 10:59 10 minutes, 59 seconds subsidiary beta uh there is a cash sweep that the excess cash flow is used for kind of early prepayment of loans or 11:07 11 minutes, 7 seconds early payment of loans. So that in that in any case will happen and that's not really where we were hoping to look at uh the capital for expanding because 11:16 11 minutes, 16 seconds that will not give us uh sufficient uh capital for uh any huge large scale expansion. We can do small expansions 11:23 11 minutes, 23 seconds like we have been doing now with uh internal resources like the 9.9 megawatt and the other stuff we can do we can generate equity internally but anything 11:31 11 minutes, 31 seconds larger will definitely require external equity sources and uh that is something that we are continuing to work on. We have had a few setbacks due to the 11:39 11 minutes, 39 seconds situation as we are in right now but uh I think we should we should get out of it so 11:47 11 minutes, 47 seconds with the with the present arrangement I think another 50 MW is the best we can do 11:55 11 minutes, 55 seconds with internal resources yes if without raising money from the market. Yes. 12:00 12 minutes And sir since you are also the president of the association etc. So uh what would like our 450 NWB 12:09 12 minutes, 9 seconds worth to if if we were to you know be in the market for selling the the asset. 12:16 12 minutes, 16 seconds I I think that is something that you can see in the market. Frankly if you look at from a PE ratio or an EVITA ratio we 12:23 12 minutes, 23 seconds are undervalued compared to the other renewable listed renewable energy companies. So they are much larger also. No sir. No no 12:32 12 minutes, 32 seconds the other in companies that are there are those which are much larger like your Adani green and NTC green are much larger than us uh obviously their 12:40 12 minutes, 40 seconds valuations are different but uh even others of similar size are are currently 12:47 12 minutes, 47 seconds uh trading at slightly better multiples so that's something that we are we are working on 12:54 12 minutes, 54 seconds so so um since sir it has been like a long period and to your credit we have been able to turn around the 13:01 13 minutes, 1 second quite well. So I mean can we take a decision either you know either ways you 13:08 13 minutes, 8 seconds know either we expand or we go go towards probably reducing the stake and uh make it a part of a larger 13:17 13 minutes, 17 seconds uh you know P fund based entity or something because this way the shareholders even after two even after two rights issue he has not been able to 13:26 13 minutes, 26 seconds get much of a return. I understand. No, I understand your thing. This is something that it is very kind of high in our uh priority list. It is something 13:34 13 minutes, 34 seconds that we are working on to see how we can increase shareholder value. Uh it's obviously good for you. It's also good 13:41 13 minutes, 41 seconds for us as promoters. So it's we are both in the same boat from that point of view. Uh so something that we are 13:48 13 minutes, 48 seconds working on 24 by7 but at the moment we I don't have anything that we can uh announce to the uh to the world as to what we are doing. 13:58 13 minutes, 58 seconds And is there any kind of a arrangement in which uh you know there could be a foreign minister which comes 14:06 14 minutes, 6 seconds in and uh you know even though we seize control of we can't we can't talk about all this until it happens we are a listed company there are a lot of things that we could 14:14 14 minutes, 14 seconds I mean until something protifies to a point where it is where we can inform the exchange we can't really have these 14:21 14 minutes, 21 seconds conversations so I can only say that we are working very hard on all options. 14:26 14 minutes, 26 seconds So at least at least can we give it a figure like that? Uh this kind of asset would be worth almost like uh 6,000 14:33 14 minutes, 33 seconds crores for one G GW. uh uh uh so uh we would be at least worth like say around 14:40 14 minutes, 40 seconds 45% of of that would that be a good estimate ours being almost like a 10 year old or asset also I can't tell you 14:50 14 minutes, 50 seconds I can't discuss all this on a public call sel it's not I mean these are numbers I mean we I cannot give 14:57 14 minutes, 57 seconds forwardlooking estimates I cannot tell you what the price should be like uh you have the data you know what I want to know what the competition is being 15:06 15 minutes, 6 seconds valued at. You can do your own analy said about the share price. I I am only saying what is the asset could be worth. 15:11 15 minutes, 11 seconds No, I would only say that the I believe that the asset is currently undervalued but uh that is based on competitive I 15:20 15 minutes, 20 seconds mean valuation of other companies but that's something that you will have to you can do it you can do the analysis yourself. There are enough renewable companies in the market now. It is not 15:28 15 minutes, 28 seconds like it was five six years back when there were hardly any companies to compare it. Today we have comparisons and uh you can definitely look at that those comparisons. 15:38 15 minutes, 38 seconds Sorry to interrupt in between ceil I would request you to kindly rejoin the queue again for more questions. 15:49 15 minutes, 49 seconds Thank you. Before we take the next question a reminder to all the participants you may press star and one to ask a question. 15:58 15 minutes, 58 seconds We will take the next question from the line of Yashnisar, an individual investor. Please go ahead. 16:06 16 minutes, 6 seconds Hello. Am I audible? 16:10 16 minutes, 10 seconds Yes, you're audible. 16:12 16 minutes, 12 seconds Yeah. Yeah. So, my question is what were the key reasons for the decline in Q4 of FI26 revenue despite strong folar growth? 16:23 16 minutes, 23 seconds Basically, there was lower wind in Q4 of See, Q4 is typically a very low wind quarter. Uh because the main wind for us 16:31 16 minutes, 31 seconds is in Q2 and Q3. Uh Q1 to Q3. There's not much wind happening in Q4. But this year the wind was even lower than 16:39 16 minutes, 39 seconds normal. So that's nothing nothing we could do about it. Just act of God. Okay. Okay. 16:48 16 minutes, 48 seconds But this variation will be there. See in this in the renewable energy business this kind of a variation quarter on quarter year on year will always be 16:55 16 minutes, 55 seconds there because we are uh kind of uh we have to take the wind which comes. 17:01 17 minutes, 1 second Okay. And uh were there any delays in power evacuation or like lower tariffs affecting Q4 revenues? 17:10 17 minutes, 10 seconds No no no no. But were fixed throughout the year uh because significant percentage of our capacity 17:17 17 minutes, 17 seconds is uh CNI the rest of it is at long-term PPS. So in both cases the tariffs were the same throughout the year and uh we 17:26 17 minutes, 26 seconds have not had any uh material power evacuation issues. So uh it is purely a wind availability. It's across the 17:34 17 minutes, 34 seconds board. It's not just for OGPL. every wind company in India had the same issue in Ko. 17:43 17 minutes, 43 seconds Okay. Okay. That's it from sir. Thank you so much. Thank you sir. Thank you. 17:52 17 minutes, 52 seconds Before we take the next question a reminder to all the participants you may press star and one to ask a question. 18:00 18 minutes We will take the next question from the line of Rohan Singh an individual investor. Please go ahead. 18:13 18 minutes, 13 seconds Your question. Yes, you got it. 18:16 18 minutes, 16 seconds So, uh my question was what is the expected revenue contribution for the upcoming 17.6 megawatt solar project and 18:24 18 minutes, 24 seconds 9.9 megawatt wind expansion in financial year 27 years. 18:30 18 minutes, 30 seconds Yeah. So, the solar project the 14 17.6 6 megawatt will give us a total revenue on a uh on a full year basis of about 14 18:38 18 minutes, 38 seconds and a half crores and an EITA of about 12.8 8 crores that is uh assuming it is operating 12 months of the year since it 18:47 18 minutes, 47 seconds is only going to be partially part of the year we will have a proportionately lower generation in terms of the 9.9 18:54 18 minutes, 54 seconds megawatt of uh uh the wind in a good in a normal wind year we should get about 14 again about 14 crores of uh revenue 19:02 19 minutes, 2 seconds and about 10 crores of aa but then that is uh assuming normal windy both are assuming 19:09 19 minutes, 9 seconds that the weather weather gods are normal there will always be some variations. 19:17 19 minutes, 17 seconds Okay. So my other question is to what extent did higher depreciation and maintenance cost impact the uh Q4 profitability? 19:30 19 minutes, 30 seconds Not much difference in maintenance and depreciation cost. It's more or less depreciation is around 1 cr uh on account of this uh higher 19:38 19 minutes, 38 seconds capitalization. But in terms of O andM normally the new assets the first year is free O andM. So we will not have any 19:46 19 minutes, 46 seconds O andM impact in the first year. So only due to the depreciation it will be there and going forward the interest on those 19:54 19 minutes, 54 seconds loan uh in the new wind asset will have an impact. Other than that there won't be any impact in the first year. 20:04 20 minutes, 4 seconds Okay. I just had one more question. So other expenses increased uh sharply in 20:11 20 minutes, 11 seconds year uh y during Q4. What were the major cost components behind this increase? 20:20 20 minutes, 20 seconds Just one second. 20:33 20 minutes, 33 seconds Okay. Other expenses primarily uh there is uh uh legal and uh consultancy 20:41 20 minutes, 41 seconds charges had uh increased and also we had uh one 20:48 20 minutes, 48 seconds uh one time expense of around uh write off of some uh long overdue was 20:57 20 minutes, 57 seconds there uh for around 1 and a half 1.67 67 crores. 21:08 21 minutes, 8 seconds Okay, that will be all from my side. Thank you. 21:15 21 minutes, 15 seconds Thank you. Before we take the next question, a reminder to all the participants, you may press star one to ask a question. 21:24 21 minutes, 24 seconds We will take the next question from the line of disha, an individual investor. Please go ahead. 21:30 21 minutes, 30 seconds Uh hi, I would like to know is the company expecting Q1 and FI27 profitability to recover with improved wind seasonality. 21:42 21 minutes, 42 seconds Okay, we are we can't predict how the wind is going to be in Q1. You will have to compare it with last year's Q1. So in the renewable energy business, you 21:50 21 minutes, 50 seconds cannot compare sequential quarters. You will have to compare the same quarter against the similar quarter last year. 21:56 21 minutes, 56 seconds So that is the real comparison because each quarter the wind pattern is different. So if you look at Q1 of last 22:04 22 minutes, 4 seconds year that will give you some kind of a trend of where the Q1 of this year can be. Uh assuming of course that the wind gods are favorable to us. 22:14 22 minutes, 14 seconds Okay. And which segment will drive future growth more uh like in wind expansion, solar projects or repowering existing assets? 22:24 22 minutes, 24 seconds Wind will continue to be a heavy weight as far as we are concerned because we have far more wind capacity than solar capacity and uh frankly uh the uh I mean 22:34 22 minutes, 34 seconds the last few years the amount of solar power that has got added to the grid uh there is a glut of uh power during the 22:42 22 minutes, 42 seconds afternoon as you can see. So we will be a little more cautious in our expansion on solar whereas wind we will continue 22:48 22 minutes, 48 seconds to expand. uh we are uh in fact uh looking at uh whether it makes sense for us to add battery storage to the solar 22:57 22 minutes, 57 seconds uh capacity in order to make it more uh kind of customer friendly because our customers need 24x7 power and uh solar 23:05 23 minutes, 5 seconds power giving only in the daytime is there are there are some mismatches so that's something that we will look at going forward 23:12 23 minutes, 12 seconds okay okay thank Thank you. A reminder to all you may press star and one to ask a question. 23:26 23 minutes, 26 seconds We will take the next question from the line of Shanaya Vishwa an individual investor. Please go ahead. 23:32 23 minutes, 32 seconds Hello. Hi, good morning. Uh my question was are there any receivable collection risks from state electricity votes? 23:50 23 minutes, 50 seconds And Pradesh University board and the second is the Gujarat registry board. Uh at the moment sorry interrupting between sir you're 23:57 23 minutes, 57 seconds not audible. I would request you to so we have exposure to only the AP and the Gujarat registry boards where we are selling power to the electricity board 24:05 24 minutes, 5 seconds itself and uh AP Gujarat has always been there has been no issue in payment. AP we had a few little issue in the 24:13 24 minutes, 13 seconds previous years but in the last couple of years things have been quite uh smooth. 24:17 24 minutes, 17 seconds So we are not foreseeing any significant uh stickiness on that. Uh there has also been a lot of support from the center uh 24:27 24 minutes, 27 seconds the power ministry and a lot of pressure on the various state electricity boards to pay their uh uh renewable energy 24:34 24 minutes, 34 seconds power producers and that has resulted in reasonably kind of on on-time payment across the country not just for us in AP 24:43 24 minutes, 43 seconds and Gujarat but across the country from Tamil Nadu all the way up to Rajasthan the state boards are paying more or less on time so I don't see that as a 24:51 24 minutes, 51 seconds challenge Okay. 24:56 24 minutes, 56 seconds And my next question is like what is the targeted capacity that FY27 and FY28 and 25:05 25 minutes, 5 seconds are there any curtailment issues in key states affecting generations? 25:11 25 minutes, 11 seconds At the moment there are no curtailment issues. Uh we will have to see during the peak wind season this year how it goes. uh the last few years we have seen 25:20 25 minutes, 20 seconds very little uh curtailment. It has been only technical curtailment in the sense because of uh breakdowns and things like 25:26 25 minutes, 26 seconds that not curtailments as such. So uh we are not foreseeing any significant curtailment this year but uh 25:35 25 minutes, 35 seconds we have to see how it goes. In terms of capacity addition whatever we have planned for this year uh because any new capacity addition takes uh 6 to 8 months 25:44 25 minutes, 44 seconds to uh to build. So we've already covered what we plan to do this year. We may add a little more of repowering during the course of the year. Uh next year is is 25:53 25 minutes, 53 seconds something that is still a work in progress. 25:57 25 minutes, 57 seconds Okay. Thank you so much. Uh wish you all best rest best of luck. 26:05 26 minutes, 5 seconds Thank you. A reminder to all the participants. You may press star and one to ask a question. 26:23 26 minutes, 23 seconds Participants, you may press star and one to ask a question. 26:44 26 minutes, 44 seconds A reminder to all, you may press star and one to ask a question at this time. 27:14 27 minutes, 14 seconds Thank you very much. As for no further questions, I would now like to hand the conference over to Mr. T. Shiva Raman, 27:21 27 minutes, 21 seconds managing director and CEO for the closing comments. 27:25 27 minutes, 25 seconds Thank you. Thank you all. Thank you for your questions. Thank you for joining us today. Uh as I had told Mr. Fisel 27:31 27 minutes, 31 seconds earlier we are working 24 by7 to see how we can increase shareholder value in this company and uh we hope that we 27:38 27 minutes, 38 seconds should be able to uh continue to perform improve our performance year on year and provide uh decent return to our shareholders. Thank you. 27:48 27 minutes, 48 seconds Thank you members of the management ladies and gentlemen on behalf of Odent Green Power Limited that concludes this session. Thank you for your 27:56 27 minutes, 56 seconds participation. You may now disconnect your lines.