Adani Green Energy Ltd

NSE:ADANIGREEN

Earnings Call Analysis

Adani Green Energy Achieves Robust Growth With Major Capacity Plans

Adani Green Energy Limited (AGEL) reported a strong performance, with a 20% year-on-year revenue increase to INR 4,836 crores for power supply. EBITDA also grew by 20% to INR 4,518 crores and cash profits surged 27% to INR 2,640 crores. The company continues to execute its ambitious 30-gigawatt renewable energy project at Khavda, commissioning 6 gigawatts this financial year, with one-third expected in the current quarter. Post-expansion, AGEL anticipates an EBITDA run rate exceeding INR 16,000 crores on a capacity base of 17 gigawatts, positioning itself to fulfill 30% of India's utility-scale renewable capacity for the year.

Remarkable Growth in Renewables

Adani Green Energy Limited (AGEL) reported a strong performance for H1 FY '25, showcasing significant growth across its business metrics. Revenue from power supply grew by 20% year-over-year to INR 4,836 crores, while EBITDA also increased by 20% to INR 4,518 crores. Cash profits surged by 27%, reaching INR 2,640 crores. This growth reflects AGEL's focus on operational efficiency and strategic project execution across all sites.

Expansion of Capacity and Infrastructure

In the past year, AGEL has expanded its operational capacity by 2.9 gigawatts, now totaling 11.2 gigawatts. The company is actively working on the world's largest renewable energy project at Khavda, Gujarat, with a massive 30-gigawatt capacity. Notably, in just 12 months from the start of construction in FY '24, they have already operationalized 2 gigawatts of solar capacity, demonstrating a remarkable pace of development.

Upcoming Capacity Additions and Revenue Expectations

Looking ahead to FY '25, AGEL has ambitious plans to add 6 gigawatts of renewable capacity. Approximately a third of this incremental capacity is expected to be added within the current quarter, with the remainder reaching completion by the end of the year. This expansion will significantly enhance their annual run rate EBITDA to exceed INR 16,000 crores upon reaching a 17-gigawatt installed base, representing substantial growth potential.

Strong Market Position and New Contracts

AGEL secured a key contract to supply 5 gigawatts of solar power to Maharashtra State DisCom through a 25-year fixed tariff Power Purchase Agreement (PPA). Additionally, the company signed its first Commercial and Industrial (C&I) agreement to provide 61 megawatts of renewable energy for a data center, supporting Google's goal of carbon-free energy operations in India. These initiatives bolster AGEL's contracted portfolio and diversify its revenue streams.

Focus on Technological Advancements and Cost Management

The company is keenly aware of the rapidly declining battery storage prices, which have dropped 66% over the past two years. AGEL plans to leverage this trend by integrating battery systems with solar plants, enhancing the efficiency of their transmission infrastructure and creating opportunities for price arbitrage in power markets. This strategic focus on technology and cost management sets AGEL apart from competitors.

Financial Discipline and Strategic Partnerships

AGEL continues to emphasize robust capital management by completely redeeming a USD 750 million holding company bond, thus reducing debt. The company maintains key strategic partnerships with entities like TotalEnergies, with a new joint venture involving a 1.15-gigawatt renewable portfolio receiving an investment of USD 444 million. This reflects AGEL's commitment to growth while adhering to strong credit discipline.

Environmental Commitment and ESG Standing

AGEL proudly leads in ESG practices being the first renewable energy company in India to join the Utilities for Net Zero Alliance. The firm has retained the highest ESG ranking from various global rating agencies, demonstrating its commitment to environmental sustainability and corporate governance.

Conclusion and Future Outlook

In summary, AGEL presents an attractive investment opportunity with exceptional growth metrics, extensive capacity expansion plans, and a solid commitment to technology and sustainability. With their ambitious targets and strategic initiatives, AGEL aims to play a vital role in India's renewable energy sector, working towards the goal of 50 gigawatts of renewable energy by 2030. Investors can look forward to significant returns as AGEL continues to execute its project portfolio efficiently and sustainably.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to Adani Green Energy Limited H1 FY '25 conference call hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Anuj Upadhyay from Investec Capital Services. Thank you, and over to you, sir.

[Anuj Upadhyay, analyst]

Thanks, Zenia, and good afternoon, everyone. On behalf of Investec Capital Services India Limited, we welcome you all to the H1 FY '25 earning call for Adani Green Energy Limited. Today we have with us the entire management team of Adani Green.

I will now hand over the call to Mr. Viral Raval, Head of IR, to introduce the management. And this will be followed by these opening remarks and followed by Q&A. Over to you, Viral. Thank you.

[Viral Raval, executive]

Thank you, Anuj. Good afternoon, all the participants. Thank you for joining us on this call. We have Mr. Amit Singh, the CEO for Adani Green with us in the call. We have Mr. Saurabh Shah, the CFO; Raj Kumar Jain, Head of Business Development. And I look after Investor Relations. And also we have Mr. Anupam Misra who heads Group Corporate Finance.

So without wasting any further time, I would request Amit to start his opening remarks, which will be followed up by Q&A.

[Amit Singh, executive]

Hi. Good morning, everyone. Lovely to meet you here online today. I'm happy to announce that AGEL has delivered a robust growth across all key metrics last quarter. Revenue from power supply rose by 20% year-on-year to INR 4,836 crores backed by a robust capacity addition over the year. Our EBITDA from power supply has increased by 20% year-on-year to INR 4,518 crores, while our cash profits surged by an impressive 27% year-on-year to INR 2,640 crores.

This superior performance is a result of our relentless focus on project execution and operational excellence across all our sites. Over the last 1 year, we have added 2.9 gigawatt of greenfield capacity, bringing our total operational capacity to 11.2 gigawatts as of right now. Our energy sales increased by 20% year-on-year to 14.1 billion units.

Now one of the most exciting developments is the ongoing construction of the world's largest renewable energy plant at Khavda in Gujarat, which I know some of you have also had a chance to visit. This 30-gigawatt project is expected to become a global benchmark for ultra large-scale renewable energy development at an unprecedented speed of execution. Within just 12 months of breaking ground in FY '24, we have operationalized the first 2 gigawatts of solar capacity.

Now turning our attention towards the current financial year '25. We have made a comprehensive construction plan to deliver [ never-heard-of ] 6-gigawatt scale of renewable capacity. This includes a detailed planning execution, mobilization in excess of 9,000 people during the monsoon periods, long lead material procurement, balance of plant setup, and several commission activities which are ongoing in Khavda.

As a result of this, we have already commissioned 250-megawatt wind capacity with 5.2 megawatt WTGs. These are the largest onshore wind turbines in the country. Even though the wind plant in Khavda is still under the stabilization phase, we have seen a very good COF of these machines north of 42% for the last 2 months that it has been operational. We are forecasting a full year COF of wind turbines to be in excess of 35%.

Renewable capacity additions on the merchant side where the price realization [ investment ] has been very attractive as well. The COF expected from our plant in Khavda for solar is expected to be above 32% on a full year basis next year onwards, which will lift our overall portfolio COF which currently stands at 24%. This will further lead to significantly accretive returns to our portfolio.

We are committed to our 6-gigawatt capacity addition this year, and our teams are working extensively to deliver the same. I'm expecting 1/3 of incremental capacity to be added within this quarter and the remainder towards end of the year.

The monsoon was extended by about a month as cause of delay. But that is within the 10% standard variation that we built in the construction [indiscernible]. This 6-gigawatt capacity represents excess of 30% of utility scale intermittent capacity, which is expected in India this year. Post this capacity, we will have a run rate EBITDA in excess of INR 16,000 crores on an installed base of 17 gigawatts.

Now beyond the current year, we're actively also making progress towards construction and adding capacities in Khavda and Rajasthan, with a minimum run rate of 6 gigawatts going forward. This further solidifies our results to continue to contribute a significant portion of India's utility scaled renewable power as the country requires.

Now let's turn our attention towards business development updates. AGEL has received a letter of award for supply of 5 gigawatts of solar power to Maharashtra State DisCom to a 25-year fixed tariff PPA. This gives a significant boost to our contracted portfolio.

We have further signed the first C&I agreement to supply 61 megawatts of renewable energy to power a data center as well, which will help advance Google's 24/7 carbon-free energy goal for its cloud services and operations in India. This is our first step towards decarbonizing the industries, enabling energy-intensive operations like data centers to fulfill their power requirements with cost-effective and clean energy solutions.

Over the past 2 years, battery storage prices have dropped by an impressive 66%, presenting an exciting opportunity to couple these systems with solar plants. This synergy not only accelerates the growth of renewable energy and enhances the efficiency of our transmission infrastructure, but it also unlocks the potential to capture significant price arbitrage in power markets between peak and off-peak hours. We are actively pursuing further opportunities which are expected to materialize in the next financial year.

Our growth is driven by a robust capital management plan with focus on utmost credit discipline. Having delivered the intended capacity growth, we completely redeemed the USD 750 million holdco bonds in line with our commitment, resulting in systematic deleveraging. Additionally, we have strengthened our strategic partnerships with TotalEnergies by forming a new joint venture comprising a 1.15-gigawatt renewable portfolio, wherein we have received an investment of USD 444 million from TotalEnergies.

We remain equally committed to maintain the highest standards of environmental, social and governance practices. AGEL is proud to be the first renewable energy company in India to join the Utilities for Net Zero Alliance. We have retained our top ESG ranking in the latest assessments by various global ESG rating agencies.

To summarize, we strengthened our contracted portfolio by adding a 5-gigawatt project, LOA, signed the first C&I agreement to power its data center in a very fast-growing space, and also maintained a consistent progress in execution of current-year projects across all our sites. Coupled with a solid capital management strategy, we are well on our track to achieve the stated goals of 50 gigawatt of renewable energy target by 2030. Thank you, and back to you.

[Operator]

[Operator Instructions] The first question is from the line of Sabri Hazarika from Emkay Global Financial Services.

[Sabri Hazarika, analyst]

So I have 3 questions. First is with respect to the 6 gigawatt capacity that you commissioned. So you mentioned 2 gigawatt will be commissioned this quarter itself, and the remaining fourth quarter will be towards the end of this year. So we're expecting it to be commissioned towards the back end of March or somewhere in Q4 of this financial year?

[Amit Singh, executive]

Yes. I think these capacities are expected to be commissioned towards the end of the quarter. I mean these are the construction estimates which we usually carry. So they have some deviation plus/minus a few weeks, as you would recognize. So that's our current estimate, barring no other unforeseen circumstances there.

[Sabri Hazarika, analyst]

Right. And once our capacity reaches 7 to 8 gigawatts, so we have the evacuation also ready, right, towards a -- I mean the phase 2 could be like ready by that time for entire like 7 to 8 gigawatts of Khavda capacity being able to be evacuated, right?

[Amit Singh, executive]

Absolutely. I think our complete forward planning, which we do, we make sure that the first constraint we apply is essentially around evacuation availability. And we work with any of the different companies and make sure that we keep a very close contact and monitor their progress, and we make decisions as we go. But as of right now, until end of next year, we have clear line of sight on evacuation, and none of our projects will face any kind of bottling or delays because of evacuation.

[Sabri Hazarika, analyst]

Right. Second question is on this C&I deal that you signed with Google. So I don't know whether it is publicly disclosed or not, but can you give us some idea on the pricing and the tenure of this deal?

[Amit Singh, executive]

Yes. I think I'm going to ask our head of business to maybe give a few comments. So I think we will not be able to disclose, but it's very accretive to our portfolio. But Raj, why don't you maybe give a bit of a color on this?

[Raj Jain, executive]

Yes. So we have been engaging with global utility players in this field, I would say, tech players who has this kind of a huge requirement. And as you know, with the advent of AI and continuous focus of some of these tech players in tracking that opportunity, we become very important for them to put their establishment. And at the same time, we also are monitoring the data policy [indiscernible] which actually gives them additional opportunity to do things in India.

So it's a large space where we are active. This is the first deal which we have signed up with them, which opens up a significant market for us in this area, apart from the conventional players. This is a long-term deal with them for supplying of green electrons at attractive price.

As Amit mentioned, that's -- the pricing is something that's actually sensitive, but it is significantly higher than what we would get in normal long-term dis-com players.

[Sabri Hazarika, analyst]

Right. When is it expected to commission?

[Raj Jain, executive]

We expect this supply to start somewhere in CY -- Q3 next year.

[Sabri Hazarika, analyst]

Q3 of calendar year '25, right? Okay.

[Amit Singh, executive]

Yes, the reason I think this project is -- we are very proud of is because it's one amongst several projects which we are pursuing in this space. And we're very upbeat on the response we're getting from the market because we are one of the companies that has a footprint of solar wind. And also we have very good geographical diversification, which our C&I customers are asking, to make sure that they have a very reliable RTC solution. So we are very uniquely positioned actually to deliver on those aspirations they have.

[Raj Jain, executive]

And just one, Sabri, I would say is that what we have been finding with a lot of these customers is I think they're having a lot of discussions they had with a lot of players in the market. But they are finding that execution and the timely delivery of power is a big differentiator which they value. And that's where our track record really gives them comfort in terms of tying up with us.

And with the kind of understanding which we have as a power sector company and the group, we are able to demonstrate them how things would move for them as a solution. And that, again, is a huge comfort they deem with us. So that obviously helps us in pricing, at the same time, ensure that the deals are closed in a manner where it is a mature one.

[Sabri Hazarika, analyst]

And last question is basically related to the financials. So I think -- I mean, if we look into a minority interest that's paid to Total JVs and also the share of profits from associates and JVs, so those numbers are like sort of fluctuating a lot since the last 2, 3 quarters. So can you give us some guidance on these 2 line items going ahead, how it would like turn out to be?

[Saurabh Shah, executive]

So our share of profits increases basically, share of profits which have increased from the associates [indiscernible] is basically because of our 26% stake in Mundra Solar Energy Limited. There the company has been doing exceptionally well. They are having a 2 gigawatt of [indiscernible] online, which they are supplying to us where there is an export [indiscernible]. So because of that, our share of 26%, we are getting a better profitability.

On the NPI, the number is because of the operational capacity that are there in Total which are doing well. And there we have an NPI profit, which is helpful [indiscernible].

[Amit Singh, executive]

Just to add to what Saurabh said, so just to clarify, the 26% equity stake that we hold in MSEL is basically as part of the manufacturing-linked tender which we have with SECI. And on the other part, the reason why it contributes a major portion is because these are older assets with higher tariffs, and because we're also -- we have also progressed in their project life at a higher level compared to other projects that we have in the pipeline.

So from that perspective, it contributes -- it looks like it contributes more in the overall profit. But in terms of EBITDA, they are broadly in line with where they should be in terms of the actual asset mix.

[Sabri Hazarika, analyst]

Right. And even the minority interest seems to have gone up, if I look sequentially, has gone up significantly, despite Q2 being a weaker quarter. But minority interest has gone up from INR 183 crores to INR 239 crores. So any particular reason or it's just debt repayment only due to which the interest costs down or...

[Unknown Executive]

I think that is the reason why it will keep on going up, because the debt keeps on reducing because we have a systematic amortizing structure on the debt, so that keeps on reducing rate, and that's why PAT keeps on increasing for those assets. For newer assets, it will be slightly less because the interest is higher because the debt amortization has not gone to that level.

[Sabri Hazarika, analyst]

Annually, what could be the number on a stable -- steady state for this minority interest? Because I think your, I mean, group PAT [indiscernible] has fallen significantly, I mean even Y-o-Y it is down. If I look into the PAT of Adani shareholders, it's down from, say, INR 372 crores last year to, say, INR 276 crores. I mean just from a modeling point of view, just wanted some more color on this.

[Unknown Executive]

So in the PAT, because the way of -- the way this project works is basically it has an amortizing structure of debt. And that's why it keeps on -- the PAT will keep on increasing through the project life.

[Saurabh Shah, executive]

And [indiscernible] there was a refinancing which happened last year in December, so the interest cost keeps on [indiscernible]. And because of that, there is this number which has gone up. That will be -- like now this should be in the same range going forward or maybe slightly higher depending on how the amortization keeps on [indiscernible] and the interest rate, the interest cost on the actual [indiscernible] keeps on going down.

[Sabri Hazarika, analyst]

Yes. So INR 240 crores to INR 250 crores could be the rate we can for the time being assume every quarter? Okay.

[Saurabh Shah, executive]

Yes, on an accelerated trend. Yes.

[Operator]

The next question is from the line of Puneet from HSBC India.

[Unknown Analyst]

My question is on similar lines. If you can give some sense of attributable EBITDA and attributable debt for your 11.2 gigawatt capacity.

[Saurabh Shah, executive]

So from an attributable EBITDA perspective, it is going to be in the run rate range of about, for this year, we are looking at a run rate of about INR 10,800-odd crores on the run rate side. And from a [indiscernible] depending on the capacity which are there with Total, it will be in the similar range from the last 6 months [indiscernible].

[Unknown Analyst]

Sir, INR 10,800 crores is your share of EBITDA out of 11.2 gigawatts?

[Saurabh Shah, executive]

So the INR 10,800 is the total run rate EBITDA for the entire 11.2 gigawatts. And for the JV, INR 2,500 crores would be the EBITDA, which is attributable to the [indiscernible] based on current operational capacity, because there are such certain under-construction assets also, so the EBITDA will further increase. But based on the current operational capacity, the number is that much. And that 2,500, again, 50% comes back towards [indiscernible].

[Unknown Analyst]

Understood. And I see in last first half, you haven't executed much, I think, 200, 300 megawatts added. Any particular reason, I mean, second quarter understandable on monsoon, but 1Q also was weak and [indiscernible] lower, which I thought will happen in 2Q. Any thoughts there?

[Amit Singh, executive]

Yes. I think as you see, we have to keep in mind our run rate, and we do a 2- or 3-year planning and execution. And what we do is we make sure that we line-balance in different parts of the activity in construction stage. So we work on, for example, each of the different elements, whether it is piling the -- across different blocks, putting the balance of plant in place. And we want to make sure that we have -- we are confident of delivering these things over a 2- or 3-year horizon.

Obviously, the monsoon period extended by a month, which kind of took away the active working period in Khavda. But that was kind of budgeted in our overall plan. But definitely, it puts a bit of pressure in our execution for the second quarter. But nevertheless, I think we are fully back up again, and we are catching up on any kind of back-and-forth from previous quarter. And you will see a gradual delivery of each of these projects in the next 6 months.

Now again, I think we're getting a better understanding of some of the weather patterns, but these delays are normal to such large construction projects. And in some places, we will come ahead; in some places, it might be slightly behind. But we're talking even the plus/minus 5% construction [ S curve ].

[Unknown Analyst]

Understood. And in the 6 gigawatt, how much is wind and how much of it's solar?

[Amit Singh, executive]

We're expecting wind to be approximately around 1 gigawatt and solar to be approximately 5 gigawatts. And I'd like to remind you that 80% of the wind capacity is going to go on a merchant project as well. So that also gives very effective returns to our portfolio.

[Unknown Analyst]

That's very helpful. And just if you can comment on your evacuation pipeline. You said -- would it be fair to assume that your evacuation till FY '27 and '28, or is it limited to [indiscernible]?

[Amit Singh, executive]

No. I think, look, we look at evacuation in 2 ways, right? I think we look at evacuation and land, and we want to make sure that we have availability to evacuate power. So if you look at our overall portfolio level, we have mapped our -- each of the different PPAs, each of the different projects, and we have a land bank, which is in excess of 70 gigawatt2. And we then make sure that we derisk our evacuation, we look at the progress happening in different states and different substations, and we make sure that we prioritize the projects where we have higher probability of evacuation.

And the next 2, 3 years, we have absolute 100% clarity that we are not getting anywhere locked. Beyond that, I think there are a lot of active projects, which are done by our sister company, ASL and Powergrid and other companies, which we are keeping a close watch on. So yes, we would like transmission lines to come faster. Yes, we would like things to move better in Rajasthan. But as per our 50 gigawatt, we have derisked it completely from an evacuation point of view.

[Unknown Analyst]

Okay. 50 gigawatts is entirely derisked now.

[Amit Singh, executive]

Yes. Obviously, a lot of projects are in flight, as you know, in Rajasthan and Khavda. So they have to happen within that construction period time line. But the next 2 years, 3 years, we are absolutely -- we have line of sight. But beyond that time horizon, as you know, the construction projects are in early stages. And those we will get better confidence as time goes by. But we feel that we will be well-set for 50 gigawatts.

[Unknown Analyst]

Okay. And lastly, on the C&I part. Adani Energy Solutions is also targeting a C&I business. Would you be providing power to them? Or would you be competing with them? How should one think about that?

[Amit Singh, executive]

No, I think that's an additional opportunity which we are looking at. I think depending on whether it is Adani Energy Solutions or other companies, because whoever comes to us and looking for large-scale utility power at a good price, we are able to provide -- we are not going to go into final last-mile distribution, so we are going to look for partnerships for that.

And I think Adani Energy Solutions is a great partner. And these are very much potential for value creation for both companies.

[Operator]

The next question is from the line of Nikhil Nigania from Bernstein Private Limited.

[Nikhil Nigania, analyst]

My first question is on the short-term power market. Last quarter it was 30% of the company's revenue. If you could throw some color on what share was it in the current quarter?

[Amit Singh, executive]

Yes. I think current quarter, I think we have a good portfolio of between 2.5, 3 gigawatts, which is operating between in-firm and merchant. So we can look at it out of 11.2. So that's what it is. And I think these projects -- these are unique opportunities in different PPAs, which we are benefiting from. And it will kind of evolve in a different pattern going forward as these PPA time lines get materialized.

[Nikhil Nigania, analyst]

Is it possible to quantify Q2 how much was it in terms of sales?

[Unknown Executive]

In H1, in total, the merchant revenue was INR 1,070 crores.

[Nikhil Nigania, analyst]

And also regarding the construction plan for this year, last time, it was guided that also 6 gigawatts, 1.8 would be merchant. Does the plan still hold?

[Amit Singh, executive]

Yes, the plan is still the same, yes.

[Nikhil Nigania, analyst]

Got it. The second question I had was something which I don't see in the presentation, is the future pipeline. So is it fair to assume that about 8 to 10 gigawatts is PPA signed and the 5 gigawatts from [indiscernible] is on top of? Or has there been any other movement on that?

[Amit Singh, executive]

No, absolutely, that's the right way to look at it as well, Nikhil. Look, I think we are diversifying, and we are not only looking for [indiscernible] PPAs, we are looking for merchant opportunities and C&I opportunities. There are other tenders as well which we are participating in. You probably are keeping a close tab on it, so you know. So that will also get added to our portfolio. So, yes.

[Nikhil Nigania, analyst]

Got it. And just on the Maharashtra contract, if you could clarify one point, maybe I missed reading into, is the construction -- the execution and commissioning timeline, the overall seem 4 years, but for the renewable business, also is it the same or is it a shorter time line we have for that?

[Amit Singh, executive]

Yes. I think the controls of the project are such that it is close to 4 years. And it depends on availability of evacuation and other parameters. So yes, I think we have LOA and I think we are making progress towards finalizing the agreements and so on. So yes.

[Nikhil Nigania, analyst]

Got it. Just last 2 questions is bookkeeping ones. There's a big other financial liabilities number which we could see go up from INR 1,600 crores to INR 4,600 crores this quarter. Could you please clarify what is that element?

[Amit Singh, executive]

I'm going to pass on to Saurabh. Saurabh, if you can...

[Saurabh Shah, executive]

This is primarily on account of the CapEx-related liabilities. It is primarily related to the construction.

[Nikhil Nigania, analyst]

Got it. Understood. And one last point, this I think we discussed a bit earlier as well on the noncontrolling interest, which went up this quarter. Given the news on TotalEnergies' further investing in the JV of the group, while it definitely gives confidence of Total in the company, wouldn't this number again go up in subsequent quarters as that investment...

[Saurabh Shah, executive]

It will keep on going up. So in a 25-year project, like what happens is the debt has an amortizing structure. So the interest cost keeps on going down through the years. And for this particular portfolio, because for the JV portfolio, if you remember, the 2.3 gigawatts was formed in 2020, and the assets were constructed before that. So what has happened is that is significantly amortized for those assets. It also has slightly higher tariffs, right, because it is -- these are older projects.

So that's why the contribution, it might seem that it is increasing, but it's basically that's how the renewable project model is based. And this will happen for other projects also in the portfolio that we have [ AGS ] dedicated [indiscernible] also.

[Unknown Executive]

Two key things to note further here. We have been saying that you have to look at the [indiscernible] project on a [indiscernible] over the life of the project. So now what is happening is as the debt is being paid, what the EBITDA is moving towards a 3 or less than 3 kind of an average EBITDA. So that's what is happening and you are seeing the impact in terms of higher profitability for the project [indiscernible]. That's one.

[Saurabh Shah, executive]

I think you want to say debt-to-EBITDA, not [indiscernible] to EBITDA.

[Unknown Executive]

So that's debt-to-EBITDA. Second, I think what is important is from an overall portfolio perspective, the 3 JVs or 3 transactions, which we have done is roughly 4,500 megawatts in terms of capacity. So on a 50-gigawatt, so on a fully built-out basis, you will have these guys -- this JV, sorry, at the 4,500 megawatts, and attributable capacity there will be 2,250 megawatts on a 50-gigawatt basis. So obviously, the EBITDA would be broadly around that in terms of attribution to Total, and the profitability long term would also reflect that.

[Operator]

The next question is from the line of Ketan from Avendus Spark.

[Ketan Jain, analyst]

If you can share the margin realization and merchant market volumes for the quarter, number of units.

[Unknown Executive]

So I think if you look at the merchant for the quarter, I think the market has been -- you know that we can sell our power both in [ DAM ] and [ GDAM ] markets. So for the solar, I think it has been around -- for Q2, it's around 2.59, and Q1 was 3.11.

And for the wind, it was a very impressive 5.81 for Q1 and 5.06 for Q2. So on a H1 basis, I think the numbers are 2.85 for solar and 5.43 for wind. And these numbers tend to improve in the next quarter and the following quarter. The last quarter was a bit unique because of very high delivery of hydro power into the grid. The numbers were a bit subdued. But that is a bit of a unique situation because of [indiscernible] monsoon. So we're expecting the prices to recover from and go back towards what they used to be.

[Ketan Jain, analyst]

Understood. Sir, also, why you see prices [indiscernible] to be higher. I mean, there's a gap between PPA prices recovered around 2.5 [indiscernible] and prices on [ GDAM ] comes around [indiscernible]. So why is there a gap? Why is [indiscernible] higher than [indiscernible]?

[Unknown Executive]

Sorry, we're not able to follow your question very well. There is a bit of an echo on the line.

[Ketan Jain, analyst]

Can you hear me now?

[Amit Singh, executive]

Slightly. But speak slowly, I think it will be helpful.

[Ketan Jain, analyst]

Sir, my question is on the price difference, like in merchant markets on [ GDAM ], the realizations are at around about INR 3. And the realizations on PPAs is around INR 2.5. What explains the gap?

[Unknown Executive]

So I think this is obviously the near-term markets are more reflection of the current demand and supply and the forward market in terms of 2025 year fixed rate. We'll obviously have the assurances being built into in terms of, obviously, the pricing, the offtake, the credit which you get, and the [indiscernible] which is where developers are offering that at a lower price.

So these are 2 different buckets and has different risk profile [indiscernible] profile. And that's where we have been guiding that. We will have a percentage of our overall portfolio in one profile and [ 3 ] others in the to the market or other part of the capacity. And [ PPAs ] will be a significant part of our [indiscernible] a question of product mix, what someone wants to [indiscernible] for us. We are optimizing that for our [indiscernible].

[Unknown Analyst]

Understood sir. Thank you.

[Operator]

The next question is from the line of [ Michael Banker ] from [indiscernible] Mutual Fund. Please go ahead.

[Unknown Analyst]

I wanted to understand whether we haven't seen a participating [indiscernible] for some time but [indiscernible] has happened out in the last 18 months. So should we expect you to [indiscernible] their for some of the complex projects, the pricing is very good.

[Unknown Executive]

I think we look at each project as an opportunity. And we want to be very clear that our strategy is twofold. We want to maximize our run rate and execution, and we want to fill our pipeline of that execution with fairly accretive returns of projects. And when we look at those returns and the projects in some of these contract standards, as we mentioned, on the face of it, the pricing might look nice. We analyzed in detail and we make sure that we participate in the ones we can maximize and migrate our portfolio.

So if we look at each opportunity in that way, and I want to bring your attention towards the [indiscernible] Storage Solutions. The battery prices have fallen quite rapidly in the last 6 to 9 months. And there are a lot of solutions, which we are curating and we are working on quite actively, as you will see, we will be participating both in the market and also in merchant opportunities. and maximize our returns. At our utility scale and having the benefit of large scale projects availability [indiscernible]. We have an opportunity to use the nighttime connectivity and maximize our returns.

So we look at each of these opportunities individually and we participate in where we can add value. And we are not participating in hybrid. We are participating in some storage solutions, RTC solutions, and that will be our approach.

[Unknown Analyst]

Understood. Sir, what exactly are your views on the [indiscernible] prices? Is it structurally in a downward or do you think that is a short-term phenomenon?

[Unknown Executive]

I think there are two things. One is it has definitely benefited from what's happening internationally, especially what happened in China. So the battery prices are going to come down. Very importantly, the research work going on, on the [indiscernible] improve the number of cycles of these battery systems will also improve the unit cost of the battery.

So we should look at this in twofold. One is the material side of things, the cost, I think, [indiscernible] the improvement in chemistry, improvement in cohort, which will further the cycles and hence reduced unit cost of a cycle for [ factory ] systems. This downward trend is going to be a long-term downward trend, and this will basically benefit our renewable sector in Asia and internationally as well. So we are very excited, we feel that we will be benefiting from this trend, along with some storage projects with the commissioning and this will absolutely add the expresses of wings to our platform.

[Unknown Analyst]

And do you think that there is a downward trend in the part price continues for the next 1, 2 years, as will be the preferred choice over PSP and PSP won't be required at all?

[Unknown Executive]

No. I think you should not look at it further like this. I think India requires both. And if you look at the [indiscernible] their current prices for 12 years, give or take these as systems create quite quickly. And if you look at the unit cost, it is still almost 2x on an [ LCE ] basis for Green power from a factory system. PSP can be almost half the price of a system.

And then you will have issues of battery system after 12 year, how do you close them off. And the [indiscernible] projects have a lifespan of [ 50 ] years. Some storage has inertia brings [indiscernible] control, can [indiscernible], [ 6 ] hours straight away. So a lot of applications of these [indiscernible] solutions are going to be different. We are going to maximize both, [indiscernible] both, and we will make sure that we take full advantage of that.

[Unknown Analyst]

And just a final question. I see that it was a blended [indiscernible] renewed. So are there any more such opportunity [indiscernible]?

[Unknown Executive]

Yes, I'm going to pass on to Raj.

[Raj Jain, executive]

So yes, this is something which is an emerging product, and we have seen some interest in that. Some of the [indiscernible] in the country because, obviously, when one helps the other in reducing the cost and it becomes more palatable as a purchase largely as cost. So that's something we're just finding lot of interest by the discounts, and we expect some of these tenders to give a traction. And obviously, as a group, it is a strength, which gives us a much better line for our stakeholders, and we would be having an [indiscernible] in some of the [indiscernible].

[Operator]

Thank you. The next question is from the line of [ Vijay Kumar ] of [indiscernible].

[Unknown Analyst]

Good afternoon. Am I audible?

[Unknown Executive]

Yes.

[Unknown Analyst]

Yes. So my first question is on your patent capacities like how would the funding happen for these projects, especially from the debt speed because I believe that [indiscernible] we will enforce us for launch of PPA to cost.

[Unknown Executive]

Look, I think all the banking institutions and we work with, they are very happy with our track record of delivery. And they have understood our numbers. They know our CapEx and our COF we generate from these plants. This gives a lot of confidence for them when we go for merchant finance as well. And when we combine this with our existing PPAs, we are able to get a very attractive portfolio combination of PPA and Merchant, which we are very much winning and encouraging us to finance and that will continue. And as we progress, that will only grow and improve going forward.

So yes, we do a [indiscernible].

[Unknown Analyst]

So who would these [indiscernible]? Would it be Indian private brands? Or is it like PFC/REC or is it like both?

[Unknown Executive]

Both are doing and both are -- so -- these opportunities are both in [ ECP ] [indiscernible] and also domestic [indiscernible].

[Unknown Analyst]

Sure. So they're not -- so they're not particular about not having a PPA is what you are trying to say?

[Unknown Executive]

Yes, I think they have confidence [indiscernible] market. I think we have looked at Indian market together with us for quite some time. They have seen how market is responding the growth of demand and the confidence we have on the merchant pricing as well. And that kind of further underpins our confidence in the market. And yes, they are with us on that.

[Unknown Analyst]

Sure. My second question is on, say, the storage. So you mentioned you would be bidding for a storage-based tender and you are also having a pipeline of [ ESP ] projects that you would want to develop. So what is the plan to tie up on getting power to these large capacities because if you tie up this to a PPA, you would probably end up paying 2.5 for keeping our solar power. But off-led, we are seeing in the merchant market or the exchanges in the afternoon time, the prices are less than even INR 1. So how will this thinking deal will you wipe or to start these storage capacities both battery and PSP from exchange or we would have to tie it up to a long-term PPA?

[Unknown Executive]

So I think it's a dynamic mix which someone has to continue to be optimized. The best part is that we have our own capacity and the flexibility built into that when it comes to [indiscernible] iteration that we can do our own higher in terms of supplying power for factory as well as the PSPs and in a lot of cases also augment that with exchange-based purchases within the [indiscernible].

Okay. So it is what will give an additional value to overall returns which we get in these projects. If we are able to combine some of these capabilities, in terms of China, we have, again, multiple products where this can be used as a [indiscernible] it can obviously be given as a service. It can always be combined with a peak power solution, it can be combined with an RTC solution. It can be given to the [indiscernible] or it can also take to market exposure.

So with all these combinations, we look at this white board on a very dynamic basis and inside of our strategy, and you can see those results when we published our data in terms of [indiscernible] which have come to the market are much better.

[Unknown Analyst]

Sure. Sir, my final question is on the distribution companies, their behavior. Now so we moved from [indiscernible] win to tenders, which are like a hybrid now increasingly, it is [ IFDR ] or load matching or peak or now do you see there as a country as a whole, the interest from DISCOMs is there to stay in any of these PPA be any issues because we are seeing certain PPAs not being signed. And if so, would we go back to, again, [indiscernible] solar and wind kind of interest from [indiscernible] behavior and the intention according to you?

[Unknown Executive]

So see, indeed, again, the situation of [indiscernible], which has to be assessed differently a [ Maharashtra ] is a recent example where you see the thermal plus solar as a scenario where they tied up large capacities. We have also done some hybrids, and they have also done some battery storage tenders. They have done some recent [indiscernible] as well.

So it depends on the discounts, how base is their own power mix and how they are seeing the load curves. Obviously, different parts load curve can be -- has to be catered based on various sources. So the product mix is something which is not necessarily a fixed fact, next, which people will look at. And they will play what makes cheaper power for their own purchases. So that's the way it group. You saw a lot of tenders which were happening in [ FBRE ]. We have not necessarily seen significant has on that just because the product [indiscernible] not necessarily cater to the need of the DISCOMs. So the [indiscernible] happens [indiscernible]. At the same time, over a period, we expect that some of those will get tied up some [indiscernible] or answered in terms of tenders and [indiscernible].

I believe, again, has been [indiscernible] so, but now they are actually moving towards [indiscernible]. Solar, Wind has seen good amount of tire still and you will see some of these mix is changing. Now the recent destination, I would say, is to call the bids around batteries, obviously because the prices are becoming attractive. So they want to look at big solutions independently. There is some business steam behind the factories, which is also prompting some of the [indiscernible] to do at that product. And we have also seen recently [indiscernible].

So I think what is important is as a strategy as a developer, I have to look at and I [indiscernible] where the play is something is derisked and I'm to making more part of the investment, I do. So I think that's how it is to be seen. And that's the reason you are not seeing such in some of the complex products where we stock at this particular kind of thing may have a limited shelf life in near term.

But again, I'm not saying that some product will not come back different from the DISCOMs demand requirements.

[Unknown Analyst]

Okay. Okay. My final question is on the recent PSP tender from [ MSEDCL ], where the discount, the regulator seem to at around [ 8.3% ] or 8.7%. The final part is too high and then they put a ceiling of around [ 6.5% ], if I'm not wrong. Like how is this economic logic and how can one deliver at [ 3.5 ] power from PSP with considering input cost of 2.7. I don't think -- we won the tender, but I'm just testing rationale for asking to supply from PSP at the tariff of 6.5. If that is the case, how can PSP projects [indiscernible]?

[Unknown Executive]

So I do not want to necessarily comment on a specific situation in which regulator and DISCOMs involved. However, what is important is [ CST ] has its own merit, and you have seen more tenders in the market apart from a particular state. I'm sure the utility with a PSP price for DISCOMs is [indiscernible] mentioned earlier, it is still cheaper than or significantly cheaper than what factory this can provide you with a number. So it has a significant value there.

And [indiscernible] solution, which can actually provide a longer-term power still do not see [indiscernible] factories where people are tying up more and put ours [indiscernible]. But in this case, this can be significantly higher.

I think the [indiscernible] vision is there. There are multiple discounts, which are clearly high. There are revenues which are already there in the market for [ DSP ] as a service, will be more some DISCOMs are actually looking to come up with the pre-power tender based on PSP. So it will evolve, it's difficult to comment on a specific scenario on this call.

[Unknown Analyst]

Okay. So my final question is on what is, in your opinion, the storage cost per unit from previously [indiscernible] the storage cost component from PSP?

[Unknown Executive]

So I think some of these numbers, I think we would rather keep it for tenders. So I think -- but what we can say is that we have access to part of [ 20 ] gigawatt scale of different [ PSC ] prices, [indiscernible], and they have fairly attractive for the market. And yes, I think this is a very big opportunity for India or for us, and we will make sure that we -- as we tie these up, we will share the numbers with you as well in [indiscernible].

[Operator]

Thank you. [Operator Instructions] The next question is from the line of [ Carlos ] [indiscernible] from [indiscernible] Services.

[Unknown Analyst]

Yes. So the initial remark you made a comment stands any green the capability on the pipeline to a nearly announcement [indiscernible] capacity. So while we are aware of the 50 to 55 gigawatt which we had planned over the [indiscernible] alongside the PSP project. Are there incremental land bank, which we have acquired are in early stage of acquiring which in incremental facility of our capacity? Can you close [indiscernible] on this?

[Unknown Executive]

Yes. I think specially, I think, as you know, this is a business where and it's going to come very, very handy and we are actively both in the process of acquiring and adding to our portfolio in [ Rajasthan ] and [indiscernible], but also we are looking at [indiscernible] and [indiscernible] as well and [ Matoris ] for both solar and wind.

We want to make sure that we have a diversified set of land banks. And we want to make sure that we tie them up. In fact, detail I won't be sharing on this call. I think it takes go up as soon as the tell where we are buying. So we're not going to do that. But to take my work with it, we have a very strong footprint of land bank already, and we are growing that quite significantly internal.

[Unknown Analyst]

Got it, sir. And last question, a clarification. As you mentioned that the minority interest would keep going up from here. So we can expect a similar kind of an investment by total across [indiscernible] whenever there is any for the requirement, we can expect [indiscernible] of an investment? But have no [indiscernible] is my assumption correc?

[Unknown Executive]

Yes. I think, look, I think [ Cetan ] energies is very actively working with us in India. They're also globally having a similar share decarbonization action which will come have as they want to grow their portfolio, this opportunity will remain and maybe do [indiscernible], I don't want to see one behalf, and we welcome back.

[Unknown Executive]

So I think [indiscernible] today, there is no technology and [indiscernible] to be able to do this. But it is something that the right time both parties will discuss. And in case the Board of Adani Green agreed and [indiscernible] Avani Green to do. It will differ there is no such optionality awaits with respect to [indiscernible] because there are under construction projects in the JV. As and when the cooperation we generating cash and earlier as well as Raj outlined earlier, how the repayment has meant our free cash flow available from operating assets is just to the minority interest has nothing bigger. So that will [indiscernible]

[Unknown Executive]

Just to add one more point. Whatever is the under construction assets [indiscernible] will also be investing the level [indiscernible] for those assets. So I think we will be investing further money. But whatever is to be constructed or under construction, whatever we could require.

[Operator]

Thank you. [Operator Instructions] There are no further questions. I would now like to hand over the call to the management for closing comments.

[Unknown Executive]

Thank you. First of all, I would like to wish you in advance a very happy Diwali. I hope you are able to take some time off in this [indiscernible] season and in time with your family and friends.

And summarize our call today, we are really focused on 2 things in [indiscernible] what we talked about, first, making sure that we deliver on our targets. We deliver on the [indiscernible] plan we have talked about not only this year but next year and beyond. And for that, we are making sure that we completely derisked our planning, procurement, construction progress and taking into account any of the weather patterns, which we encountered.

And second, we want to make sure that we maximize our returns, and we continue to improve our returns on a life [indiscernible] of our projects. Now I understand it is difficult for you to calculate from the public numbers. These ROE numbers, we are [indiscernible] for always accretive to our portfolio and continue to grow.

So with that, thank you, and we'll be in touch later in the next call. Thank you.

[Unknown Executive]

Thank you, [ Anuj ], and investor team for organizing this call. Thanks a lot on the participants, once again for participating on the call. [indiscernible] are any further questions. Thank you.

[Operator]

Thank you on behalf of Adani Green Capital Services. This concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.