Q2 FY 25 investor call notes

1. Unexecuted order book of 10,549 cr. Compared to 8084 cr as on March 2024

• 59% is from domestic.

2. Recent Order wins

• Received order for EPC of the largest BESS project (1 GWh) in India, to be executed by 2025. Expecting to gain a leading position in India’s fast growing BESS market

• Received turnkey LOA for 312 MWdc project in Rajasthan

More on Battery storage (BESS) (My notes)
i. The above BESS project (1 GWh) is one of the very few projects of GWh
scale in a single location globally
ii. The total installed capacity of BESS in India currently stands around 219
MWh as of March 2024.
iii. The energy storage capacity requirement is projected to be 82.37 GWh
(47.65 GWh from PSP and 34.72 GWh from BESS) by FY27. So we are likely to
witness a multi-fold increase in energy storage requirement over next 2-3 years.

3. Well placed to ramp up execution in H2

• Utilization of 500 cr loan from IREDA
• Upgrade in Long term credit ratings: from BBB- to BB+ .
• Some of key vendors – module suppliers, cable suppliers, etc have agreed to offer good credit terms.

4. Expecting strong uptick in execution in H2 FY 25

• Executing approx. 4 GW project in Khavda, Gujarat
• Other key projects are in Gujarat, Rajasthan

5. Nigeria project

• Awaiting final order signing – expecting it to happen soon.
• Project has support from EXIM Bank of the US. Has the backing of US Congress; so no question of it not happening
• Sun Africa (the partner in Africa), has recently signed a similar project in Angola. More details here

6. Reliance Project

• Working on pilot project, expecting pilot to complete in this quarter
• Rollout will happen post the pilot project
• Margins are expected to be in similar range as that in other projects in open market

7. Promoter selling

• Mr Daruvala has publicly stated and reaffirmed commitment to be a long term investor and no further stake sale likely from their side.
  My view – This remains a monitorable though, going ahead

8. Gross Borrowings have increased due to the new loan availed from IREDA

• Indemnity proceeds to largely take care of debt repayments due in H2 FY25

9. Guidance

• On track to achieve revenue guidance of 8000 cr for full year
  – Q3 will be significantly better than Q2 and Q4 is the strongest quarter.
• Gross margin likely to be 10 to 11% going forward. Heavy rationalization on overheads is underway already.
• EBITDA margin likely to be in range of 7 to 8%.

10. FY 26 outlook .

• Excluding Reliance and Nigeria, hoping to grow at 15 to 20% CAGR on conservative basis
• 8000 to 10000 cr order inflow expected next year too

11. Other details

• Clarified that 2811 cr is the loan given to the subsidiary based in Middle East – SW Middle East Solar Energy LLC (part of standalone results note). This point was mentioned by company during Q2 FY 24 call.
• New CFO to be appointed soon. Shortlisted some candidates.

Disc: Invested