AZRE - Earnings call transcript Q2 2021 | Azure Power Global Limited

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Operator

Ladies and gentlemen, good day, and welcome to Azure Power Q2 FY '21 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nathan Judge. Thank you. sir. you, to over And

Nathan Judge

the provide will this, an longer-term FY operating in and the on with statements. questions. materially risks guidance deeper There our results by from our statements the note, and XXXX Ranjit Thank overall and me With are assets, are start today highlights you. joining recent quarter will CEO; press remarks. thank with update. Gupta, by follow for Kumar Ranjit After of update website our and release discussion then that through the quarter everyone, press announcing call the copy Power's important XXXX. in will differ call our available update up are forward-looking of Azure 'XX outlook reiteration into our the for with on good CFO. Last statements our night, going the Murali Subramanian, uncertainties morning, or we press of call we within falling industry on harbor then are fiscal These website. Pawan solar then those projects us. guidance. Pawan Please to second could a implied the and expenses, release, Agrawal, COO; for will and September cash performance the Murali XX, results A to presentation our you long-term to and and Ranjit up the are contained And recent open safe construction such azurepower.com. on for presentation under DSO, ended materials and of will a improvement available G&A company an an India. key integral expressed release cause section all review of wrap dive at positive the and issued our updating on Investors additional

measures a encourage press X-K release, releases we certain in furnished we contained more our also the it our presentation the now description. report. hand in to presentation It annual GAAP press reconciliations materials on presentation to materials available reconcile that in are my measures, most pleasure press are So report website you Also and review these Ranjit. for the release, and over we complete and annual non-GAAP Form website and comparable our on is to our to

Ranjit Gupta

a a looks we all positive from the and has tunnel. Thank vaccine Nathan, we very relief had Last we end the I hoped light seeing the you, pandemic everyone. vaccine spoke, and that some be on morning, been would front, of the are found. and time would news get some It there at good like

positive against even is that Here more is call an COVID-XX. in the wishing vis-à-vis held our fight next environment

all Given the ensured on operations, severe we our continuous ensure embarked remain our an we to by operations pandemic. members and our provided the dedicated quarantine families and call and We on team implemented incidents safe no Azure support, campaign breadth protocols across impacted any to monitoring COVID-XX. of were health on our strong and their of management had a formulated who support internally report members. aggressive doctor isolation impact from and and Through reduced awareness team

our knowledge, pandemic. continue enhanced which Our and staff COVID disseminate information the series and XXX awareness during flyer meaningful of capacity to preparedness

through outreach. work them is to also to continued with for us Job across communities our important focus our our operations. have training help an We CSR

certified. to ISO-XXXXX Azure ourselves getting to continued faced well the forward moving despite operate COVID-XX. also challenges with are We

will XX% quarter, statistics enable our on are and and quarter $XX.X and assets net year company. rose assets. operational $XX.X ability year performing also year During XX% debt million. X.Xx. operating EBITDA leverage or million for the quarter, assets a for to our the to to flow value the this to have EBITDA we greater from Starting how better EBITDA begin cash to to operating equity, the see XX-month that was will This rose we reported highlighting investors year to CFe, last

also made getting we reported days due progress regard from We lowest to is in days outstanding our great to makeup this days sales payments previous quarter, and from which the XXX With XXXX. since customers, the quarter have past our fell a the combined the at that X XXX level will given to at for PPAs we pipeline XXX with than which factors, rather gigawatts PPAs tranches megawatts have once. gigawatts the capacity the other we now of X,XXX X for be size expect time LOAs, of in signed in

are progress January, around for PPAs expect by the first we that do February tranche and making We will XXXX. receive

As of fallen, we many months, to realize more gigawatts. on exchange favorable have move has recent costs this aware, equity or original expectation XX% construction in continue foreign rate we been that X are our expect IRRs and will

an there after for the online or mid-XXXX is before, X interstate system, gigawatts coming we expires transmission cost the waiver renewable ISTS, discussed advantage As energy. added in have for

begin INR that distribution With avoided. previously were X.XX companies this transmission INRX.XX for per of the expiry to about incur hours to costs will waiver, kilowatt

these X our power for in entire of this expense, the from the mid-XXXX, significant that gigawatts be a megawatts pricing will delivered power companies retain However, this After buy some will market. gigawatts and from X waiver will providing not we pipeline, likely generated the Indian lowest distribution power advantage. this incur new

Act that the the meeting note for not would their the well tariff amendments purchase will It are cost to our penalties of one renewable DISCOMs we is short obligations many be will power, DISCOMs renewable that to an with several of years. obligation. pertinent note next buy to DISCOMs addition, Electricity options. their increases RPO do In and that lowest need meet Hence, ISTS waiver on their draft

recent our released for is Sustainability fiscal most also Report XXXX. the X than less months, We second year-end in one

disclosure project. in carbon to We have the X disclosure, and scope our emissions expand continued including participation

pay, continue to air diversity to commitment non-GHG ESG, several emit lost time and implemented safety reduce X% annually, to policies, among not new by an equal others. policy, have health emissions We a and incidents and inclusion, including enhanced

carbon with increasingly suppliers to efforts our engaging environmental also reduce We their reporting to encourage better are impact. in

per We many in by remain continue reducing progress for and to with unreliable get we not investors aware and aim water the to X, what and consumption in received many the a neutral provide are brief Whilst lowest that opportunities organic usage access world India, an invested are AZRE. XXXX. company our only capita new available. is recap in some water recently in carbon-neutral India net Electricity of for making of grid readily a be in the recently many on to growth have Page would like as to is solar they do tremendous good the the

lowest aim gigawatts for new most to gigawatts energy in to capacity cost makes satisfy the XXX every solar As nearly supportive sense capacity capacity new government electricity, additions future have by demand substantial targets by year the forward. going of coupled source solar of are that XX growth. is place These or renewable XXXX

significant cost This build end capital. of see with being in gigawatts returns provides growth is well we there fact, the for government that to attractive In auction. will above next capacity the about intends construction what capacity only India, be XX X/X additional a tremendously of of runway about to of our auctioned current Today, year. new by

Human We I their Azure have and of over we take strength, to at undertaken the our online currently cohesiveness and times, this ambitious through to these As is Azure With its this the engagement of quarters it X to working our developed last say the upskill heights. for specifically work Apart that an as on for has over program, incredible organization, I members ourselves from quarters. stakeholders thank and and I take any can at Resource its support. greater staff job proudly team home, labor opportunity has team which from X in that, pass has sites team team Azure to pandemic. these biggest over to all patience is source seek ensure complete to At of training done various various company initiatives Murali. X,XXX embarked will we dangers an the our changed

Murali Subramanian

morning, tremendous under finished addition to our within initial which will pandemic tirelessly challenges want torrid on XX that finished the to in everyone. revised update We projects you, be faced, commercial On X they remain is this season, and Pages the an XX-megawatt the X, projects our provide We Good operation Assam, megawatts part pandemic-related the monsoon project. restrictions. Overall, budget including that expected expect many the of continue of in rains to we despite will to Thank project by we finish the the construction. they larger worked Ranjit. date expectations. and that and thank

fall megawatts Rajasthan we largest finished megawatts by the XX expect On of next this have our year. many year X, XX making end We the the and date, remaining to fiscal another to challenges. despite the progress of in are project

As year-end of megawatts we expect XXX March. this the have now, calendar XXX and completed by completed about megawatts to by remaining

of Rajasthan to third with year. SECI, fixed each X are projects, calendar X tariffs expect and quarter our XX-year online it which the relates come next they around megawatt we As of with XXX will

generation greater-than-expected revenues for energy COVID-related achieved Additionally, days. despite from we on side and projects, targets our operating the restrictions rainy have

of the in Page demand industry see a We energy Looking renewable on regulatory supply reported regulators first deficit at had still this of X.X% for country half fiscal the that significant power X. new developments and for and India year.

to intermediary the tenders at of capacity taking distribution contracts. and time such capacity with gigawatts without of released auctioned. gigawatts about procurers, sign about are companies X.X as was X X new there During supply SECI. moment, power agreements Unfortunately, And quarter, solar the gigawatts nearly are of

However, various after of would meet pressure finally RPO with picked months to about demand see contraction of registering teeth growth Act year that X.X%. DISCOMs September to give has demand their the and sign to also we a up amendments PSAs enforcement increasing to on this proposed RPOs. year-on-year the Electricity of Power X do

Green short-term an We RE Market bilateral nascent. their transactions avenue states This in is and of very power have buyers at called sell in for to Term resource-rich states introduction prices, power. RE new for also to enable platform targets. a will energy Ahead the India meet RPO-deficient still trading renewable Electricity and provide platform renewable the market-driven seen

the would range will currently XX%, in XX% the an As BCD, in of to that update Safeguard the which Duty. proposed Basic it addition be Customs on to we be Duty, expect

but bidders has potential been do have they module in on Ministry electricity for the India continue, documents DISCOMs reliant that expect very bills BCD a in time decision recently final impact We a customers. imports privatize our our any expecting in outlined some given to material companies. hesitation result for is on Efforts China the provisions. We higher there criteria been by are returns for not issued may for some now, distribution and law projects as Power in interested protected to the change of buying stake majority and that

will Duty. focus on proposed to Act proposals to Electricity proposed Act of certainty greater in outlays to and With due amendments quarterly would law, discuss and to resolve set energy highlight Safeguard of likely, items would as to on able also the enhancing it and changes several shortening Electricity the recovery I capacity, wanted We to construct the establishing are such energy as curtailment less formalizing be pass-through us an results. making regulator issues. we cash considered benefit to sector positive that new Rules are payment us adopted, that, in change revenue, with get in the Pawan One the the a India. Electricity expedited disputes for renewable aim give that turn of renewable will must-run including security If time

Pawan Kumar Agrawal

Thank you, Murali.

XX. Page to Turning

we operating or As of XXXX, X,XXX PPA basis. were on September AC XX, a megawatts

portfolio previous remained stable Our quarter. of X,XXX from the megawatts

quarter of -- our second On to about quarter in we focus the in the million,which last operating USD came were Our above were of expectations, generation following internal over improving ahead was construction the pleased and USD with were efforts that the for our we guidance. Revenues XX flat costs high few fiscal on XX. X% XX.X mostly Page costs. year-on-year. put very have results quarters end and Overall, reducing

of Our in XX% plants basis XX.X% continue PLF was at operate the about PLF, $X guidance to the or And XXX save appreciation quarter price increase due SARs, G&A a which to year. to cannot second revenue about would of the earliest rights, most prior $X in same our is or during exercised range the GST, This in quarter. higher increase capacity a this, higher only to SARs the higher were and share essentially and cash line stock and XXXX added Safeguard last On about than would DC the for Costs end in X% million our points XX% with internal at increase be very that to and recovery until PLF fiscal well. then paid. be million Duty year. drove related that of expectations, from that we note of XX% for quarter XX%

We had related benefit tax $X.X of also a million. SARs to about

be of be and tax around full XXXX around for We quarter. $XX third fiscal expenses for fiscal will expense the will year expect $X that tax million the million

Excluding the net year. stock the which appreciation last million loss $XX $XXX,XXX, second results approximate was the about resulted of quarter rights meaningful about same a a would improvement loss impacts, quarter fiscal of in have from in

our had we expect 'XX at XX% least operational excluding in about Page fiscal. outlined megawatts this Turning reducing overhead very We or to of end We costs continue see XX% FY to earlier year. as 'XX on FY in reduction to a remain XX. increase by corporate in versus G&A, a SARs do focused this of despite our

As more -- important you we margins more are our improvement operational expect and going leverage, we continued can be forward. that will driving there even in see,

$X compensation this If stock a far running our at over G&A so is look excluding expenses, year. per corporate G&A, month little fiscal you million

our on doing economic more our recently about head costs, we moved space X/X to expenses. to more are a We office location, and reduce office saving

to flow We resulting properly around of cash this company review normalized project important yet EBITDA XX, for assets produce cash Page is the operating EBITDA about EBITDA. commissioned recently XX%. of was given sheet reflective in On of that operational. cash very quarter and and from XXX months investors state new once increased profit USD emphasis solar that operating areas than flow the balance this debt for was more generation This One assets. steady equity providing value about on debt us rose is XX our of last at and equivalents, balance XX. you greater debt have see and million is can the just the for net and stood operating the about sheet or about disclosures million, XX% overall about to EBITDA assets Net year-on-year of leads cash for the but million to net our construction $X.XX ratio assets debt-to-EBITDA X.Xx. Page around $XXX We which a had This on $XXX company, to of debt-to-EBITDA billion. for for overall operating our includes much projects the ratio under a ratio is net net of -- believe

to XXX in due days As a the in last We pleased the included assets to to GESCOM made fell directly of linked exchange after and bonds. hedging this is DSO debt days sales put past a hedging should payments are place DSO XX. the I reminder, $X our Pradesh, assets makeup for as those foreign bills. be in XXX moment DISCOMs, we Page the this ratios, Andhra a past in due calculating on green that included related from X our other take and our discuss to see million about on quarter DSOs, outstanding, were our notable quarter. improvement to want days

coming work quarters. well other have the some Andhra in DISCOMs from We as and as Pradesh continue good the news on in to getting hope to payments Karnataka

of mention investor I should Before included discuss trading AZRE which X Ranjit solar increase pass to your company. recently in awareness expect like it we stock guidance, liquidity enhance that would to to I over and indices, leading was

'XX Ranjit to guidance. FY some long-term and commentary over to provide Now on

Ranjit Gupta

On Page XX. Thank you, Pawan.

the the the early megawatts next into COVID. of to year, related noted, could fiscal slip delays completion about As of reflecting XXX part Murali

commercial However, as to X,XXX don't to also operation XX, expect to by these adjusted related reflect operational the are penalties delays. to any pandemic, being we the dates have now X,XXX XXXX. megawatts to expect incur March about We

the in to of shifting is we would are a on note INR that range of projects. the XX.X INR addition, given COVID-XX. billion to online billion only In projects completing quarter the We account XX.X to delays to revenue delays our guidance of related revenue coming following in the changing

our to expected expected to seen We portfolio performance as in is HX, -- deliver have HX. operating and in continue expected the performed our revenue it

'XX, quarter revenue INR INR PLF the billion expect X.X and be third fiscal be X.X 'XX, XX.X% For between between and we to billion to to XX.X%.

to Turning XX. Page

remains X CapEx the fiscal delays year our Our would for in long-term year a some we unchanged, into additional gigawatts. CapEx may given outlook potential note PPAs except We of win movement for fiscal year placeholder XXXX fiscal the has for signing XXXX. that from megawatts XXXX

will we placeholder you. a sense, only commitment. With be happy make will that this Thank good stated questions. not earlier, this, do is take we As projects and to

Operator

first The question Instructions] from [Operator Bahadur line of from Jefferies. Apoorva is the

Apoorva Bahadur

on wanted think check I'm this that says commissioned text before not XXXX. will X-gigawatt to confident we projects to the June of be be end the stated will just PPA, project policy commissioned ISTS that? Sir, you If pace for these needs we Are eligible I be that the before wrong, the that waiver.

Ranjit Gupta

Apoorva, the question. thanks for

You that expires ISTS renewable of right projects, which place for in are energy the currently waiver, in June XXXX. is

are are for all are And for the June those not waiver. the commissioned eligible eligible that post-June So ends projects XXXX XXXX waiver. before

we because megawatts over these are manufacturing up, tender, projects, which to do to comes government. projects the the and delivered manufacturing manufacturing be over supplies time the to were we expected manufacturing actually projects the X capacity up the to of X for of condition the by a which up are years, up However, right? in the of in these sign and are that we were time right? period the comes the from years that's capacity, have X,XXX come have we this the a and tender, So to So years Because projects the ground. tender we years supposed first the right? supposed projects because won, won, linked auction -- capacity as the they X That was years, it build on time X set idea X year, going

So to until XXXX, of capacity these well waiver ISTS or the projects this therefore, that waiver, on will ISTS regardless had they these go this happens into going for because commissioned. projects, the waiver are were what enjoy they anyway XXXX

Apoorva Bahadur

recently on mean thing Sir, -- Okay. sir. CLI PV the Got secondly, manufacturing. it, I this on announced solar

Just obviously, print is I some or insight if manufacturing wanted on insights now. But the fine unavailable. we have to mean, given the have what discussions mentioning that to into be this to the relevant be we will could for us text, any if that. department check you any also the benefit

Ranjit Gupta

So the referring this posted decision the cabinet to, been -- it's are today that afternoon. X:XX right, in you at

Apoorva Bahadur

Sorry.

Ranjit Gupta

and amount of actually -- right? mean I INR very just a X,XXX small So money, it's crores. it's

Ministry to X,XXX the have help INR know they down So how don't have we said, the like you amount New that more detail they small, with the very will is I do out want is are on sector. come for of with seem unfortunately. this work they how has that Renewable what on -- money But as thing Energy will actually crores. of is wait perhaps and will to And exactly not it. the manage and to going going stuff to to detailed, CLI the But put

Apoorva Bahadur

they guess? will mean the how this out -- come to long anyone's take Any scheme or I will idea Right. with

Ranjit Gupta

Yes.

is said, I today like just this afternoon. think, I

So really off hot It's the fresh. really, really really, press. it's fresh,

I on what at I more information must no that moment, the have you this. than have So say

Apoorva Bahadur

peer tendering your lastly, Sir, thing. also won XX Right. that who it. Got Right.

said PPA, have call, so their in of start you follow. gigawatts will will said, that X it mean more on details that obviously, tranches. as they, they So recently I signed

you I has So has started PPAs? of signing referring it? if the started? and will these Or it they first to starting were kinds -- mean collections

Ranjit Gupta

far, auctions signed be the previous sale power first. have So purchase this agreement in tranches, is that power other the SECI to agreements like And also. -- the mentioned been signed for earnings with so we had has the manufacturing not because tender call the bundling power

obviously, So couple It's in is tenders, other a the started and right? they because, month and between August process So of peers plus us really the in process. our going SECI largest only on. are and pandemic -- capacity of this

open. offices So sometimes they open, not sometimes the company distribution are are

there. will hopeful has tremendous X X, made time. signing will by it are start what a progress. and just these been take January, quite And So PFAs February, PPAs months, hope little I SEI It's we that is and they think we

Operator

The next from of line Philip Capital ROTH question from Partners. the Shen is

Philip Shen

at end PPAs a Ranjit, So do in PPAs signed you little or first to some February comes Can I you How starting of said follow-up January see next tranche to signed 'XX? in to be all think the 'XX. more the PPAs cadence year As you expecting early maybe next the of do year. provide come XXX of you year? in you're the before the the of a expect megawatts color? bit expect But in the there,

Ranjit Gupta

likely start started take that we auctions, The will yes. question people, In LOA not Phil, making The SECI the have an tranches, X And X.XX agreements I'm fact X the next and get the that XXXX least to higher, at believe ISTS focus INR X.XX X.XX the end to start attempt too into this right, June, Azure of signed, to time more the time mentioned, like the have waiver. of taking are is it the of will be tariffs to the not time INR actually, will then asked, that companies Power too expect INR close done sell middle by you to they the the account by calendar, frame. once middle by power reflecting in to will not year, given happen the August the that are So yet tranche, that of those most that to June hopeful I auctions, year. the become auction more we tranches. also. reality, purchase right? then by of tell the tariffs next the kind of you July, next able dates happens sir, we XXXX, start if to most reflecting on new and the start close, the Because becomes truth, commissioning

Philip Shen

Great. Okay.

a just in to way. ask different So a question

think year, of the end of XX do the you much think when next guys? be reasonable you when you how to -- gigawatts be So by that that by about you talked could is auctioned addressed

Ranjit Gupta

we tell For -- if will in get agreement auctions. part few and right build power opportunity signed, us, it we the very to we and ourselves. our very, have January, to a new also are if get February, is I by we Phil, It will purchase will now. that signed to won't depend depend take from upon we upon able expecting like phased be the how this out, capacity, presents you X,XXX number will megawatts everything

country. country. the in said We megawatts to past in We become doing want the in profitable largest we the have company be no are are the that to rush We X,XXX most the comfortable a right? in year, company

to We have such or no time. X megawatts plans and by such reach X gigawatts

So -- the we want can size, we year. we we to will X,XXX moment, do. megawatts the our projects amount that our reflect to are that And at do sure costs make just believe we able a of

we be don't will that. power But transmission any connectivities in we can what are we we there or we everything can think will projects, that smoothly, how which if feel have auctions, arbitrage return, us delay we a higher part in from it could very will signing tariff -- auctions. see few I If see of in there auction, So any agreements we the out. see interested. part the will, the will the in which we I storage If be a auctions. a too market many But see see. interesting forward, certainly in I technology pans auctions, very, get is hybrid take delays our could for taking potentially where or part example, would to take If as take auction purchase we we is perspective, better a or running

Philip Shen

Okay. helpful. That's

the economically, is duty the the to Basic guys like can not end it As And but should will or pass impact. because new passed? of when you to sounds cost kind know that as I it relates what there to market Duty, be through Custom be could that it you your tariff customer, some timing impact

that Somebody loses on economics.

timing the curious on So Duty. Custom you expect just the Basic on

Ranjit Gupta

the I issue the mean with because don't think to this hear, and know August. I in from month July Custom the the behind we was Duty, out Basic Phil, the expected what we of reason delay real come

been WTO that part through right? understand. consideration, WTO, hoops to WTO compliance given understand there little of have these had that is -- as we delay. certain what So of bit are last we of be with We there India has we time what a norms, being are jump to could a to because it we we or hear that ensure we also in are

long government this is difficult and have law in remarks, us. which I it It's we on bit in our longer. But T's is how So why to for taking is crossing take. I's like little dotting mentioned a it will is the notification, the the think change this say

What XX% is So of But the cost is the we really happen extra in pass-through worried. of are or does it. put the not become whatever the for we BCD required that our that to equity get SGD, equity. will

already it of back. have getting SGD, Rajasthan And for project, through X for for example, started projects, comes where all we money back our example, have we tariff. paid So our Maharashtra projects

getting earnings notice SGD. we've presentation, might back started in already for As you our money

Philip Shen

Right.

past saw We this that in $X.X Okay. quarter Is that of QX of million. correct? about

Ranjit Gupta

right. That's right. That's

Philip Shen

in So how And or doing, markets the and balance stock that how SECI? sources me of you price all your thinking -- what you with that other is capital and capital what's equity you different question tapped could last One that I'll about? you're the and then pipeline options? Great. it are the have the Okay. on. potential pass how from X-gigawatt the thinking do guys well how fund you're see you about With you can share

Ranjit Gupta

this? take to want would you Pawan,

Pawan Kumar Agrawal

get one, didn't sorry. this I sorry. Sorry,

Ranjit Gupta

Okay. Don't start commenting.

support our been you When was So we instill we share the how confidence our the we And capital share I the where company And at the right, when some that capital. deciding think our investor price headed. is, we in and play consideration the level. done we of share planned to community comes that right. raise are as about the price hard have gets from where price. Phil, we of had the value are obviously, getting And different cost are a the market to yes, to we the closer of in are CapEx, are into seeing work impact we have able want

X,XXX the years. expecting money the X agreement And time, needed could first megawatts last over like concerned, this that as far be was we this is X power is purchase had As said already there having should that So this equity if -- perspective been signed. a of have not COVID happened, the been had is thing power not from delay raising purchase the signed right? agreement in or

will the -- have it markets, to we we markets? come make make So like for come to it in will at that for it sense markets. we to assets So whether the past, sell if to we were when of because, take will public to we said, right? of come exploring we are we said So that I selling that will take cost -- make equity corporate right? we assets, one and we does doesn't sense things sense come to it when when are public of investments we we capital in need -- sense, was have the we us public sense that's debt needs now or sell we decision level. If SPV see will or we mean the to to to markets, us assets, have take the to makes raise to have public equity makes like

So there come for are ourselves. the we to accordingly many will and action for levers take as us, decision point we

Operator

from The from next of Maheep Mandloi Credit question Suisse. line is the

Maheep Mandloi

being project pushed of next out, just wanted that I for clarify construction couple driven construction I gap understand time to a there. Assam want over but the year. of a by. understand the just be Ranjit, could I delays of Assam the the lines is what there to seems project on gap you because understand the to project, cadence if

Ranjit Gupta

So as to the the case the it monsoons, of to circumstances, work built we project, filing, even very during because was right, So And monsoons of specifically, is really, impossible were especially able under is really bottle the during right? So first monsoon, immediately, -- have becomes it your complete right? we most monsoons. during table project, doing Assam, high, you one run and into start almost suboptimal. the water completed you already basically where which during in tough that

other monsoon. -- The be post take start it projects, will to able we will only

we just the on So started have a projects. of other couple

we So that they is which is incidentally, like -- there The -- this of to our land most should project still And get the that are remote are a presentation, fiscal. last have is in be done we mentioned is project, completed there in we little building. earnings there. bit

that's delay the And little completion X next a complete fourth a we over X there the months. that or is expect of reason project. the why So in bit of land to the

project extension seeking we the on their done first the an project time without And project. fourth practically even time, extra extension -- X practically. within is Those the get the projects X projects, extension So was a and are for only the project. the XX-megawatt will first other last done

the will more slightly fact it's it that than So the not other projects. much delayed impact hopefully,

Maheep Mandloi

So locations project in you other country? location any Rajasthan note in it. Southern PPAs, allow you just in any you or But India? you just could are ISTS know the they Got for them build helpful. identified you terms in on Could yet it. Got the right? anywhere, backlog? the looking That's or of just I to X-gigawatt the to And -- clarify publicly. that haven't build

Ranjit Gupta

in as is critical X-gigawatt we right in auction, the don't Maheep, letter project, right? you planned, it project, So these right? out transmission our had scoped taken right? can the A, it we LOAs, of had If need is part And anywhere, you'll already time XXX-, capacity, So get actually the award, block as got have XXX-megawatt can away, you that soon thing as is our of block had the get auctions the when you which one a B. it in as because we good bang you that at already we soon resources that you to typical

get it B, plan you'll to for in don't a X,XXX But have you you get it C. in then make megawatts. If

get You the the So transmission we And this we literally, day, right? -- bang in was capacity. the anywhere, it we get for cannot same very, day the very apply LOA, part just well, we this planned had well took auction. before

over X over For the X,XXX the the these X substations X,XXX different already Rajasthan, have state received for for we the for connectivity -- these within megawatts. substations of X megawatts

to state X,XXX megawatts installation. currently in these has planned are best of the So built be Rajasthan, which the

Maheep Mandloi

that prices roughly terms on cost But the over That's range INR in is you And the out or module you do just at of an AC you're system well? now or and the for the your it. under X-gigawatt in as prices year next what there, changing just level. the model Got in X, see terms visibility for project how of seeing of right X.XX for helpful. that yourselves

Ranjit Gupta

Murali, this? want take to Perhaps, you

Murali Subramanian

Sure. Yes.

the last seen on lack side. So of some prices because or quarters of of couple material raw supply the in availability crunch the volatility module has

price some fluctuations. have we So seen

of fluctuations We as continue understanding expect the these quarters couple this with to to of per continue suppliers -- our the modules. over next

-- near the However, that's in like term. the

module new towards at secular in, there account trend look efficiencies the declining on and coming term, the of think long coming technologies better is you If I a medium in. prices

a short seeing term, expect in price year-on-year, in least. do volatility fluctuations and But we reduction price. are few overall, we percent the year module So a a at

Maheep Mandloi

others last hand then the from And to in the one helpful. over -- And just That's just me. it queue. I'll

the rather other you do the projects to X and because window could Or a if the And sign Is that get assuming between -- the of quarter rate? gigawatt? for XXXX. with does gap to bid that said, narrows tranche per PPA, X any in the first online when The and window in, that of any down you of X-gigawatt first install comes provide just construction, there delays, comes you you X, construction when as next potentially kind year completed? that think the mid in you'd projects, and of get in as Rajasthan you run probably you said, XX-, it to XX-month

Ranjit Gupta

So XXX-megawatt Maheep, linked the projects, they to the are these which manufacturing larger-sized ones tender tranches. because are are these projects,

to X then for or, right? in these say, build, So sorry, projects, -- the the -- we -- like and have 'XX, be 'XX in SECI expecting delivered January are need -- December So next So January we January our Rajasthan of are these Rajasthan September right? of XXXX by 'XX, if calendar. December quarter X mentioned, commission and are signed the example, of X X in we projects XXXX, to expecting and X let's years to PPA,

XXXX, will fill, is the in calendar XXXX is there, we of we -- part of quarters therefore, to So we fourth almost there take the like yes, quarter So available between and to a X auction. and which right? can are which third the quarter calendar us, right, which gap there would

megawatts, frame. XXX that can XXX that we For in gap, maybe maybe do megawatts, time

to away. the cycle that then the once then do established, but goes -- projects right, established, is flexibility So cycle more once is

Operator

line TIAA. next is from of The from [Chang Louis] question the

Unidentified Analyst

stock One in questions. is the two have quarter. I appreciation this rights

we you see panel Is sense XX%, then do next has the of give about the or affecting of is mentioned XX% cost. that expense same volatility margin? it? what type Can in EBITDA it And forward, speaker the XX%? volatility question a us Going was the

Pawan Kumar Agrawal

I'll first take question. the

technically, appreciation lower P&L will our our increase in in and hit to if price to stock continues will P&L charges price corresponding share that theoretically, So right? extent. to for EBITDA up, rights, go the an to result share On in increase that, continue it continue

these very, note part schedule, vesting, until very XXXX, cannot is important large for what these of are SARs until be as exercised that However, while XXXX. the March very to they

only outflow XXXX, -- or they if it after actual happen So all, cash are XXXX will immediately March after whatever. after exercised

So color cash the to maybe vesting X-year not that are accrue, it's actual moves. charges period, these we I are to wanted until price add these more But that So to highlight this, outflow which the March basin but and will accounting just right? entry, XXXX. happen have may Ranjit

Unidentified Analyst

versus difference. EBITDA So just accrual coming see, from But say, in we the EBITDA or basis, margin I calculation we EBITDA a do understand margin XX% quarters? do next see cash XX% an the

Pawan Kumar Agrawal

a have this I suggestion So on for a note. lighter

very stakeholders, happy is that But a actually the of price doing margin. we or way means model being X reflected by EBITDA the item. that part that expenses, because things. that are of bracket good. discuss small more is keep dragging honestly, And the the company One be Board, this if margin there in SAR terms is internal should The at. because to EBITDA the way stakeholders, look EBITDA, that So one decreases with with we way well. very of internally I is your the was like we Very outside SAR

EBITDA very, be because negatively, we of it don't around are totally SAR. very to sans EBITDA, can It's take generation, whether prices honestly. or as focus And should XX% or price. predict, difficult margins me the SAR do can So difficult costs linked to which how XX% we best are team of very improve management accounting, a because for nature XX% charges very we SAR how about and and we

Unidentified Analyst

Okay.

So increase stock price? the may, detail just percentage of on if this, in are little on bit appreciation level are more that I the you a you on absolute Or stock the facing price? facing

Pawan Kumar Agrawal

of of valued become are SARs, next example, to the the yet over vest already subject they which right? these part years, the that are for are So been option X the model, And to Black SARs, which X, So NTM. Scholes the have basis vested, charge. value for for

the is way accounted is So for. it that

Nathan Judge

this Okay. Nathan. [Chang is Louis],

way will million that quarter swing $X that in is from stock $X.X variance by about at Every about every one change to result price. around was quarter, the think $XX. sorry, I'm for $X.X the stock end -- million of end on the Just modeling the in the swing of

Unidentified Analyst

change. for every Nathan. All Great, of pack price million $X.X stock right.

Ranjit Gupta

To add second on the on of question on volatility. to that, extent your

there to happened has moved the crunch And volatility other a little as high. between not seen is So supply a defer COVID, XX%. the or thing market India bit we've we in a then if price as the much because has material anywhere what deferred because of supplies, that's of X% is availability. said, And which as has been the X and is of, of the last choose most supplies raw of shortage we months

Operator

Molchanov next The line Instructions] Pavel [Operator Associates. & is from the of from question Raymond James

Pavel Molchanov

XXX of Can XXX those going is question coal-fired What solar? amount gigawatts to the solar I of be by or do I about big-picture what there displaced still kind opportunity percentage India? are gigawatts ask think think of realistically a in you generation.

Ranjit Gupta

the regulators grapples with So a the Ministry the and all that time. Pavel, question it's

government rightly play Our capacity, of to feeling X% that is things About here. About expected about India. X% this that the there of in -- industry mentioned, are you X capacity capacity like in is thermal to really XXX,XXX coal that at there megawatts hard really XX-year-old the exists especially several year still are plants, old, the very right? running, is moment, to sector get because are which every pushing old, decommissioned. that really, years the decommission plants So state are in XX

about a needs built, mentioned, energy per X% of to of our average. X,XXX capacity right? lowest that is megawatts by year, X% increase these energy a that be X% decommissioned to of Like is needs we which expect India thermal So metrics, requirement if to X of at to on capacity units of to requirement we units right? in to basis, also go come XX,XXX X% to utilization increasing, in you now is right, India about look about we means right? year-on-year X% our about because it be has electric, to expected The every that the up new down. India year about capacity So capita need X% and XX,XXX is

to will newbuild thermal. continue we right? thermal, say actually the it Because some XX,XXX still the newbuild unfortunately, some some from when about of states of electricity, still build -- come states So megawatts of

being X, to about maybe say, X X let's gigawatts are X, maybe So maybe X still maybe X, built, gigawatts.

So gigawatts. let's about say XX

to sector. power between gigawatts the renewable at load whereas XX%. run to solar needs a from XX gigawatts come And capacity typically XX thermal XX% XX XX%, thermal, equivalent plant right, between So our -- will energy about of because XX about plants to to can of run factor

least you megawatts, when So solar. XX,XXX automatically X.Xx, XX,XXX So become at XX,XXX megawatts megawatts of say right?

be need So to if XX,XXX XX,XXX of installed. thermal, fill the of want megawatts megawatts to solar need for I I

at how arrive XXX,XXX XX,XXX India said typically the megawatts. Minister has that want to number, also is which of we to that the So we megawatt Prime reach

XX,XXX XX,XXX where to the and megawatts, and renewables, comes XXX,XXX to the capacity megawatt put This X%, X,XXX come thermal from in megawatts. will megawatts remaining comes approximately of nation to to It from these to being place. that calculation X% from? The where XX,XXX X,XXX, current So will will increase. numbers, be thermal need about does kind of is decommissioned, X% about X% growth come of XX,XXX of comes is continue that the the still megawatts from.

Murali Subramanian

when storage become a to newbuild coal, time, with will where costs away. over to they'll is And and as that. And level, period if to I then go point big-picture just that supply. suppose huge to add or when the a that thermal supposes one very really completely I does At a baseload decline off. competitive can that's fall And a they provide add of

Pavel Molchanov

of U.S. that appetite your capital understand, future also an bonds? green needs? Can bonds. at Okay. As I I and option Europe ask for X the rates continue look you years. the green X to issued about to in lots in you last close X Are Obviously, bonds interest continuing be green as and to for

Ranjit Gupta

Pawan, that? to you want take

Pawan Kumar Agrawal

Yes.

in terms equity. green And So mix leverage. would to optimal of have company, conservative and debt we fairly very to prefer we bonds, a remain of prefer honestly, as

So partly debt the need, the provide raise while current by does plans opportunity bonds we bond fund to debt. nonfunding funding then equity market to focus our have green but to and and equity the by

we a levels project debt. construction yes, markets, to have tap when prefer we refinance bond our conservative the green risk. financing, then So our because there projects what to have happens and initial do debt to refinance But very we new primarily is plans

generate to yet flows. are and projects stabilize cash Our

are which based flows to primarily leverage a with and on initial we are operational the and prefer fine extra flows, of thought the funding, in track do conservative has the that we some to not But is the have debt projects at purely record project equity, is cash that and which level we the that. with raise been cash So raise relatively cash open of the the which And done comfortably equity about. level. that a also, when process, is flows something to green past coming available, bond But lever the perfectly we or focus to in the project do refinance sustain. we try once there can and to

Operator

lines. that joining question Ladies of That may last was concludes Thank us. Power, the queue. your you conference. the you . gentlemen, now for in behalf disconnect On Azure and

Ranjit Gupta

and happy everyone Thank to in everyone, you, U.S. Thanksgiving the very a

Murali Subramanian

you, Thank everyone.

Azure Power Global Limited (AZREF) 11 Nov 202021 Q2 Earnings call transcript