Adani Power Ltd

NSE:ADANIPOWER

Earnings Call Analysis

Strong Performance and Growth Plans Drive Confidence

In Q1 FY '25, Adani Power showcased robust financial results with a 29% increase in operating revenue to INR 14,717 crores and a 57% rise in continuing EBITDA to INR 6,290 crores. Profits grew, fueled by a 78% plant load factor and strategic fuel management. Significant future projects include the 1,600 MW Mahan Energen Phase 2, set for completion by June '27. Adani plans to double its capacity to 30 GW by '30 to meet India's growing power demands, while continuing to expand through strategic acquisitions and new projects.

Strong Start to the Fiscal Year

Adani Power Limited (APL) began fiscal year 2024-25 on a formidable note, showcasing significant improvements across key performance metrics. The Plant Load Factor (PLF) increased substantially from 60% in the first quarter of the previous fiscal year to 78% this quarter. This robust growth was driven by a rise in power demand and an optimized fuel management strategy. As a result, the operating revenue for Q1 FY '25 surged by 29% to INR 14,717 crores, while the total revenue grew by 30% year-over-year to INR 15,052 crores.

Operational and Financial Excellence

APL's ability to manage costs efficiently was evident with a 17% growth in fuel costs, significantly lower than the revenue growth. This cost control, combined with increased volumes, led to a 57% increase in EBITDA to INR 6,290 crores from INR 4,121 crores the previous year. The finance costs also saw a decline, from INR 883 crores to INR 811 crores, thanks to the company’s prudent cash flow management and debt prepayment strategies. Consequently, the profit before tax for continuing operations nearly doubled to INR 4,483 crores.

Expansion and Future Growth

APL is poised for future growth with several ambitious projects in the pipeline. The Mahan Energen Phase 2 ultra-supercritical expansion project, with a capacity of 1,600 megawatts, is progressing well and is expected to be completed by June 2027. Additionally, proactive steps have been taken for setting up three more projects of 1,600 megawatts each at Raipur, Raigarh, and Mirzapur. APL is also awaiting NCLT approval for other significant projects, with plans to expand capacity to 30.67 gigawatts by 2029-30.

Market Conditions and Strategic Positioning

The outlook for India's thermal power capacity is positive, with government estimates indicating a peak demand growth from 250 gigawatts currently to 400 gigawatts by 2030-31. This surge in demand will require an additional 80-90 gigawatts of thermal power capacity. To meet this demand, state governments are already calling for bids for new power supply projects under long-term PPAs. APL's strategic positioning and readiness to capitalize on these opportunities underscore its commitment to growth and value creation for stakeholders.

Regulatory and Market Dynamics

APL has successfully resolved almost all regulatory petitions related to domestic coal shortfall claims, significantly reducing onetime revenue recognition from past dues. This regulatory clarity has enabled APL to focus on ongoing business, reflected in the consistent financial performance. Merchant tariff realization was strong during the quarter, contributing to higher revenue as APL leveraged its strategically located open capacities and efficient logistic capabilities to meet peak demand during high tariff periods.

Sustainability and Technological Adaptation

Sustainability remains a focus for APL as it explores innovative solutions like the pilot study on green ammonia co-firing at the Mundra site. While this project is in the technical feasibility stage, it demonstrates APL’s commitment to reducing its carbon footprint and exploring alternative energy sources. This aligns with the broader industry trend of integrating renewable energy and improving environmental impacts of energy generation.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Adani Power Limited Q1 FY '25 Results Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir.

[Mohit Kumar, analyst]

Thank you, Sagar. Good evening. On behalf of ICICI Securities, we are pleased to welcome you all to the Q1 FY '25 earnings call for Adani Power Limited. Today, we have with us the management team represented by Mr. S. B. Khyalia, CEO; Mr. Dilip Jha, CFO; and Mr. Nishit Dave, AVP, Investor Relations. We'll start with a brief opening remarks, which would be followed by Q&A. Over to you, sir.

[Shersingh Khyalia, executive]

Good afternoon, friends. Welcome to the earnings call for first quarter of '24-'25. I have with me our CFO, Mr. Dilip Jha and the APL finance team. Adani Power Limited continues to grow from strength to strength shown by a vibrant power [indiscernible] operating excellence and an agile and capability. The Indian crony is hungry for more power and the nation is blessed with most of the resources required to fulfill its needs.

During the recently concluded quarter, APL posted a sharp year-on-year growth in PLF to 78% and greater power dispense across all plants, aggregating to 26 billion units. APL's power dispense under PPAs improved because of growing power demand, lower prices of imported coal and competitive position in merit order stack.

Our strategically located open capacity is also benefited greatly from high merchant demand and tariffs due to our competent fuel management and logistic capability. Our O&M experience allowed us to fully capitalize on the peak demand opportunity by ensuring high plant uptimes.

As you all would be aware, we have now achieved almost full resolution of regulatory petitions related to domestic coal shortfall claims and recovered past dues from discoms. Consequently, onetime revenue recognition of the prior to geared items has come down significantly. And our revenues as well as operating profit primarily reflects now ongoing business.

Our constant endeavor to optimize fuel cost and to improve contribution per shop has borne fruit in the form of a sharp growth of 53% in continuing EBITDA. At the same time, our pragmatic management of cash flows and leverage has allowed us to bring down the finance cost. Consequently, profit before tax has nearly doubled during the quarter 1 of '25 on a recurring basis.

As you can see, APL has opened fiscal year '24, '25 on a very strong note. And we are confident of continuing to perform with all-round excellence on the path ahead. Speaking of the future, the Mahan Energen Phase 2 ultra-supercritical expansion project of 1,600 megawatt capacity is well underway to achieve its targeted completion by June '27.

The outlook for India's thermal power capacity growth is very favorable. The government has revised its power demand projections within just two years. It estimates that deep demand will grow from 250 gigawatt currently to 400 gigawatts by '30, '31, '32. This will call for 80 gigawatt to 90 gigawatt of additional thermal power capacity to meet peak demand. Even if the target of 500 gigawatt of nonfossil fuel-based capacity is achieved.

State governments have already started to call for bids for supply of firm power under long term PPA to meet power demand 5 to 6 years from now. Bids for supply of 6,400 megawatts from thermal power have already been annuated by three states, while more bids are expected from other states soon.

We have started to take proactive steps for capacity expansion in view of this positive outlook and our long-term goal. We have started advanced preparation for setting up three more projects of 1,600 megawatt each at Raipur, Raigarh and Mirzapur. The Raipur and Raigarh projects are function of the existing power plants in Chhattisgarh while the Mirzapur project in UP will be set up in a subsidiary company that we have acquired recently.

We are awaiting NCLT approval of the resolution plan for Lanco Amarkantak in coastal energy which will expand our operating capacity by 1,800 megawatts and add another 1,320 megawatt of under construction status. In addition to this, we are also evaluating further brownfield expansion projects of 4,800 megawatt and inorganic opportunities of more than 1,000 megawatts, which together will take our target capacities to 30.67 gigawatt by '29, '30.

We are following an agile business model, an integrated approach for augmenting assurances on project execution and operational fronts. We are also focusing on enhancing fuel security through commercial mining licensing under an asset-light model.

We are highly confident of delivering value-accretive investments to our stakeholders by capitalizing on our core strengths. I would like now to invite Mr. Dilip Jha, CFO, to speak about the financial results, followed by a question-and-answer session. Thank you, and over to you Dilip.

[Dilip Jha, executive]

Thank you, Khyalia. Good afternoon friends. I hope you all have downloaded the recent presentation that we have uploaded in the website. Adani Power Limited has delivered yet another quarter with the strong financial performance with higher volumes and revenues, improved profitability and very healthy credit indicators.

The company achieved excellent PLF of 78% and sales volume of 24 billion units in Q1 FY '24, '25. In comparison, it had posted 60% PLF and 17.5 billion unit sales volume in quarter 1 FY '23, '24. Almost all power plants contributed a higher P&L and volumes on back of higher power demand under PPAs and in the merchant market.

The second 800-megawatt unit of Godda power plant was coming at the end of June last year, due to which the effective operating capacity was lower in Q1 FY '24. In the recently concluded quarter, full generating capacity of Godda was available, which contributed to higher volumes.

Continuing operating revenue for our Q1 FY '25 grew by 29% to INR 14,717 crores as compared to INR 11,370 crores in Q1 FY '24. Continuing total revenue grew by 30% to INR 15,052 crores in Q1 FY '25 as compared to INR 11,600 crores in Q1 FY '24. Import coal price for quarter 1 FY '25 were lower as compared to Q1 of last year.

Due to these tariff realization in some PPA with pass-through of import coal prices was slightly lower. At the same time, merchant tariff realization was strong in Q1 FY '25 and resulted in higher contribution. This reduction in import fuel price was also reflected in the significantly lower growth in fuel costs for quarter 1 FY '25, which was 17%.

As a result, continuing EBITDA for the quarter grew by a strong 57% to INR 6,290 crore as compared to INR 4,121 crores in Q1 last year. During Q1 FY '25, FPL recognized a comparatively much smaller amount of INR 422 crores as onetime period prior period revenue on account of regulatory orders as compared to INR 6,497 crores in Q1 last year.

The reported revenue and EBITDA now reflect the quarter's performance to a great extent, providing adequate clarity into the numbers. Further, as highlighted by our CEO, Mr. Khyalia, earlier, we have been able to keep finance costs firmly under control with the stated aim of reducing limits [indiscernible]. We have utilized regulatory cash flows to prepay debt during the previous financial year, making the balance sheet very healthy, improving our credit ratings to AA family and helping reduce interest rates. Finance cost for Q1 FY '25 was INR 811 crores as compared to INR 883 crores in Q1 FY '24.

On the other hand, depreciation was higher at INR 996 crores versus INR 935 crores in the two quarters, respectively due to the commissioning of Godda plant. This outstanding operating performance and cost control led to continuing profit deferred tax for Q1 FY '25 nearly doubling to INR 4,483 crores versus INR 2,303 crores in Q1 FY '24.

After considering onetime items, the reported profit before tax for Q1 FY '25 while INR 4,906 crores as compared to INR 8,800 crores for Q1 FY '24 due to onetime regulatory income of more than INR 6,000 crores in Q1 last year. The company has recognized tax charge of INR 993 crores on a consolidated basis during Q1 '25 as compared to INR 40 crores in Q1 last year.

This tax charge includes both current and deferred tax for the Godda plant can deferred that for [indiscernible] entity. For Q1 FY '25, profit after taxes INR 3,912 crores as compared to PAT of INR 8,759 crores for Q1 '24, and I explained that this is due to onetime part regulatory income recognition in last year, which was approximately more than INR 6,000 crores. The APL has now firmly established its credentials as a dynamic and profitable leading power producer with high liquidity and excellent credit worthiness. It is coiled squarely to convert the upcoming growth opportunity into profitable and secured investment that generate value for all stakeholders.

In the coming quarters and years, we hope today have more exciting developments and a strong performance with you on a consistent basis and hope to engage you closely in discussions about our prospect. I would now like to request the moderator to open the floor for question and answer. Thank you. Thanks a lot.

[Operator]

[Operator Instructions] The first question is from the line of Uma Menon from Bernstein.

[Uma Menon, analyst]

I just had a couple of questions. The first one being, if you could please provide an update on the completion of acquisition time line on Lanco Amarkantak and if there are any updates on other acquisitions plants such as KSK Mahanadi and the costal energen plant.

[Dilip Jha, executive]

So thank you for your question. Both the inorganic acquisition of Lanco and [indiscernible] the awards are reserved and we are expecting that the result will be announced very soon. So we are waiting for the result.

[Shersingh Khyalia, executive]

The other part, which you have asked is KSK Mahanadi. KSK Mahanadi is under bid and its commission is probably today by end of business hours. So it is still under bid.

[Uma Menon, analyst]

Sure, sir. And the second question is around battery using and all. With the lowering costs that we're seeing on batteries and the low tariff that we saw slightly lower than the fourth tariff seen in on the tech tenders recently. Do you see this as a threat to the merchant thermal portfolio?

[Shersingh Khyalia, executive]

See, whether it is renewable or whether it is battery, they would be available during the day time because battery is yet not really competitive as compared to the thermal. And any rates related to solar, they would be available during the daytime. And during day time, we don't consider that. Going forward, we will have PLF more than, let us say, 55%, 60%.

And with that understanding only our owned projections and investment decisions are being taken. However, this -- so power would be a level only for 7 to 8 hours. And rest of the 16 hours, the base load would be made from the thermal only. So if we take a full load during 16 hours and, let's say, 55% during 8 hours, still the PLF would be above 70%, which is a very, very good PLF for a thermal station.

[Operator]

The next question is from the line of Nikhil Abhyankar from ICICI Securities.

[Nikhil Abhyankar, analyst]

Sir, I had a couple of questions. So can you just elaborate upon how are we looking on tying up for PPAs for organic expansion? And which states have come out with tenders and what will be the duration of your PPA?

[Shersingh Khyalia, executive]

As we stated, three states are already there with their bids. Maharashtra, 1,600 megawatt thermal. UP 1,600-megawatt thermal. And Rajasthan 3,200 megawatts thermal. So these three states are already there for totaling to 6,400 megawatts. And many other states as per the resource adequacy report of the Central Electricity Authority, many of these states are having deficit.

And there is an advisory, obviously, to all these states that they have to ensure resource adequacy. Because going forward, it would be obligation and obligatory on the utilities to ensure 24 by 7 supply. So we expect a lot of such bids and tenders will come.

And therefore, whatever inorganic or organic expansion which we have planned, we are of the view that we would be in a position to tie up the long-term PPAs. And these PPAs of these three states, which I mentioned are having a duration of 25 years.

[Nikhil Abhyankar, analyst]

Understood. For the plants which are considering for acquisitions, can you speak on the -- how much of the capacity is tied up already? Is there any merchant capacity available?

[Shersingh Khyalia, executive]

In case of Coastal, which is where the NCLT has reserved the orders. NCLT has reserved order actually for both on the coastal as well as Lanco Amarkantak. In case of costal, one unit of 600-megawatt is tied up under the PPA with the Tamil Nadu and one unit is available under merchant.

And in case of Lanco Amarkantak, the entire 600-megawatt is tied up under the PPA. And 1,320 megawatts, which is under construction. And the construction is almost 70% complete. That is open -- available for -- you can use as merchant or we can tie up with the states against their bids. So it's available free capacity.

[Nikhil Abhyankar, analyst]

Understood, sir. And sir, almost 22% of the revenues have come from merchants. So how much was the merchant sale and in units of capacity here? And if you can also talk about the spreads. How much spread or cost spreads have we owned on it? And what was it compared to last year?

[Shersingh Khyalia, executive]

But actually merchant, we have the revenue realization is INR 7.45 on an average for the quarter. And the cost was INR 2.89. So there was a contribution of INR 4.56.

[Nikhil Abhyankar, analyst]

INR 4.56. Okay. And what was it compared to last year?

[Shersingh Khyalia, executive]

Last year, the tariff was INR 7.57, so it was almost same. But coal cost was higher because of the higher coal cost of imported coal as well as in the auction also the premiums were very high because of less availability of coal. Whereas this year, the availability of coal from even coal India under the auction is also very comfortable.

And therefore, in the auction, the premium has gone down. So last year, the coal cost was actually on a higher side. It was INR 3.86. And therefore, the contribution was INR 3.71 as against the contribution of INR 4.56 this year. So contribution has gone up almost by INR 0.85.

[Nikhil Abhyankar, analyst]

Understood, sir. And sir, mostly the sales will be a medium-term or short-term PPAs are more bilateral trade or bilateral market?

[Shersingh Khyalia, executive]

It is mostly bilateral less than one year. And then some balance capacity which because you cannot tie up 100% under the short-term PPAa where you have the obligation of take-or-pay. So even from that capacity it is available for merchant. 20%, 30% is kept for the exchange rate also. So the 70% to 80% is tied up for less than a year under the bilateral agreements and bilateral sold through these as the power exchange.

[Operator]

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

[Puneet Gulati, analyst]

My first question is on your thoughts on the merchant power. Would you want to keep any more capacity open for merchant? Or would you rather tied up with PPAs given the current demand situation?

[Shersingh Khyalia, executive]

As per our internal assessment, we are keeping around 20% under merchant. That should be a sort of balancing act whereby we don't want to expose us for market risk more than the 20%, and 20% is sufficient to take the advantage of higher rates from the market. So we are of the view that we should keep around this only 80% to 20%, 80%, 20% ratio.

[Puneet Gulati, analyst]

Coming for the expansion, you would like to keep 20% merchant.

[Shersingh Khyalia, executive]

So for expansion also, we would like to tie up through the long-term PPAs and only 15% to 20% capacity, we will keep for the merchant.

[Dilip Jha, executive]

So just to interject here, Puneet see, the capacity that we are acquiring under the NCLT route and others. Those do not have full tie-ups but they are in three located very advantageous close to all the [indiscernible] areas. So those capacities are well suited for the merchant market. The newer capacities that we are going to set up, the example; Brownfield, greenfield expansion. So for those we will look at full tie ups under PPA.

[Puneet Gulati, analyst]

And availability of credit. Is there credit available for the merchant part of the capacity as well? Or would you have to fund it out of your internal accruals.

[Shersingh Khyalia, executive]

Credit is available nowadays even for merchant also because there is a clear indication from government of India that since now the rates in the market are quite attractive. And therefore, the financial institutions and banks would look into the stand-alone liability of the capacities.

And now since the market -- merchant market is quite mature. So it is available and the institution and banks are open to look into the merchant capacity. And in case of, let say, our Mahan power project, we have tied up capacity of 1,320 megawatt out of 1,600 megawatts.

So partial capacity is already considered by the financial institutions for funding though it is under the merchant capacity.

[Puneet Gulati, analyst]

Understood. That's very helpful. And secondly, in your analysis, how are you protecting yourself against potential in future carbon taxes? Do the PPAs have a clause which allows you a pass through? Or is that a risk that you will be exposed to later on?

[Shersingh Khyalia, executive]

Any carbon tax will be -- obviously would be a change in low and therefore, it would be passed through under the PPAs. In fact, you may be aware that already we are having INR 400 per metric tonne, which was called initially as grain sales and then it was named as nowadays the GST compensation sales.

But the objective was to call this as a green sales and to use for those types of objectives. And that green sales when these were imposed, it was imposed in INR 50 and it was an INR 800 and ultimate today, it is INR 400. And it is allowed as pass-through under the PPA. So similar thing, if anything further is imposed related to carbon tax or any taxes, it will get passed through under the PPA.

[Puneet Gulati, analyst]

And can you also talk about the future acquisition opportunities apart from the CSP and Lanco? What other would you be evaluating or is available in the market?

[Dilip Jha, executive]

So Puneet, obviously, we cannot give you a name of this target. But we are evaluating the opportunities as they come -- as we come across them and we look at certain criteria for selecting and going through the evaluation process before we bid for them.

So for example, the quality of the equipment. How well the plant has been maintained. How will end out it is in terms of key enablers like water availability, transmission availability, whether it is close to gold-bearing sites, whether it has got room for expansion.

So all those things are taken into consideration first. And only then do we decide if we want to bid for a specific project.

[Puneet Gulati, analyst]

And so without the names, any intent on the size because I would presume those would come in faster and greenfield will still take about five years to come from now.

[Dilip Jha, executive]

Yes. So actually, there are ongoing evaluations and bidding is also going on, as we also mentioned earlier. So we will look at good projects over there. But primarily inorganic expansion is not really the key strategy that we are following. It is actually to get access to good size, get access to capacities that can be turned around quickly and fulfill the demand niche that we find in the market.

[Shersingh Khyalia, executive]

See the company has good cash flow. So whatever opportunity will be available, which fits into our objective, obviously, we would be looking into that. So whatever will come and available, we would be looking into that.

[Operator]

The next question is from the line of Bharat Shah from ASK Investment Managers Limited.

[Bharat Shah, analyst]

I think merchant power offers flexibility and promise of a higher reward. But of course, there is a certain risk, especially in the leverage business, while the PPAs give us predictability, but probably will lock us down into relatively a potential of lower returns. How do we [indiscernible] what is that philosophy and strategy to balance risk and reward between merchant and the PPAs?

[Shersingh Khyalia, executive]

I think I have already answered this question earlier, but nevertheless, for the sake of repetition, I would like to say that we have internal sort of a strategy whereby we want to tie up 80% of the capacity to long-term PPAs, which will give us stable returns. And 20%, we are keeping open whereby we can optimize our returns by taking the advantage of good returns in the market. So that is the broad setting.

[Bharat Shah, analyst]

Sorry, I missed that earlier part. My apologies. Secondly, likely given the way economy is growing, and given the way it is a synergistic growth across many, many sectors. Therefore, GDP growth is likely to be far more joining type and combining amongst many sectors. Plus given the first off, growth on manufacturing an industry.

Energy demand growth, we are likely to overshoot all projections. So given 11%,12% kind of likely electricity demand and the growth in the coming period on a per annum basis. What kind of our growth, the picture would show? Will it be -- what kind of multiple do we see compared to overall energy demand growth in the system?

[Shersingh Khyalia, executive]

See, in my opening remarks, I have already stated that in last two years, Government of India has changed its estimates and now Government of India is of the view that by '30, '31, the peak demand would be 400 gigawatt.

And out of 400 gigawatt, around 300 gigawatt is to be made from the thermal capacity. And today, we have 217 gigawatts. And out of 217 gigawatt, around let say, 10 gigawatt will be scrapped because of the aging. So about 80 gigawatt to 90 gigawatt additional capacity would be required in the next 5 to 6 years. And there are obviously a very less number of developers now left in the country.

So we have already stated that we have very good expansion plan, whereby today, we have 15 gigawatts capacity, and we are planning to achieve by '29, '30, at least 30 gigawatts, that is at least 30 gigawatts. It all depends on how the future demand will come up.

So we will try to manage our growth plans with the demand growth. And obviously, we are very bullish because not only that it will help us in absorbing our additional capacities. But obviously, we are off the view that there would be good rate ablation.

So our realization should go up apart from growth in terms of quantum.

[Bharat Shah, analyst]

So [indiscernible] volume terms probably will grow at the rate of 15% over 5, 6 years. I thought it was in my earlier discussions with you, my impression was the rate higher than that is what volume growth we are aiming at.

[Shersingh Khyalia, executive]

Sorry, your voice was not very clear. Can you please repeat what you said?

[Bharat Shah, analyst]

I'm saying in my earlier discussions with you, my impression has been that we are aiming at volume growth much higher than what Dilip Ji is just now mentioning because this will imply about 15% volume growth over the next 5, 6 years. But I thought we are looking at achieving a much better number than that.

[Shersingh Khyalia, executive]

I know -- I think we gave the same number. We have never given -- in terms of capacity numbers more than this. So this is our announced and notified capacity to exchange also and to everybody. We have given the same number that we are going to have capacity about 30 gigawatts as and today is 15 gigawatt.

[Bharat Shah, analyst]

Okay and maybe then I've been more optimistic than what has been suggested. Therefore, revenues are likely to be including at a rate faster since realizations will probably improve.

[Shersingh Khyalia, executive]

Yes, that would be obvious because as I stated, that if the economy is going to grow faster, and the demand is going to be higher. In that case, the rate realization will be much higher. So our growth in terms of revenue would be, one, because of the doubling of the capacity. And the second would be because of the higher rate realization. So there would be a combination of these two.

[Bharat Shah, analyst]

And by implication, profit growth would be even much higher because of the basic equation underlying that?

[Dilip Jha, executive]

Yes, of course.

[Operator]

The next question is from the line of Raghav who is an Individual Investor.

[Unknown Attendee]

So my question is regarding green ammonia blending project at Mundra site. So I would like to know about the outcome of that and future prospects in terms of raw material cost, if we implement further that green ammonia that will be, I think, also beneficial for our greenhouse that our reducing carbon footprint?

[Shersingh Khyalia, executive]

We are carrying out the pilot study. So first, we have to establish whether the green ammonia can be co-fired with the coal or not. So we are in the state of technical study at this stage. Once the technical possibility is established, then we have to see on the part of the viability of the rates of the ammonia and also whether that will be available as pass-through under the provisions of PPA.

So it has to be seen from multiple angles. One is, is the technical feasibility. Second is the market rates of ammonia and whether the power generated just on that will be alone as pass through under the provisions of PPA. So if all things go on the expected lines, and the rates are widely obviously, we'll go ahead with that.

So at this stage, we are in the technical feasibility study stage. So would it be difficult to give the future road map, but we are trying to make it feasible so that we can reduce our carbon footprint.

[Operator]

The next question is from the line of [indiscernible] who is an Individual Investor.

[Unknown Attendee]

What is the future of electricity supply to Bangladesh and how the payment situation is there right now with the Bangladesh?

[Shersingh Khyalia, executive]

We have signed the agreement for 1,600 megawatt and the PPAs for 25 years. So obviously, the PPA will last for 25 years. So there's no question of future as regards to the already concluded agreement. And with regards to payment is concerned, we have started getting good payment from last few months, and every process is well established now.

And on an average 4 to 5 months of arrears is there for all the power suppliers of Bangladesh. So it's not that we are getting some different treatment. We are going to get same treatment, which used to be -- which is the similar situation in India.

So the way we get the payment in India from the discoms. Similarly, we are getting the payment from the Bangladesh also with some kind like obviously, because of these are government utilities. So there are -- obviously, would be outstanding to their suppliers. So as per the process, we are getting now the regular payments.

[Unknown Attendee]

Okay. And are we expecting any increase in supplies to Bangladesh?

[Shersingh Khyalia, executive]

Increase -- we have fully tied up our power project. So the entire power is going to Bangladesh. It is a dedicated power station to Bangladesh. It's not even connected with the Indian this is. So everything is going to Bangladesh, and Bangladesh is taking full power.

[Operator]

Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for closing comments.

[Dilip Jha, executive]

Thank you. Thanks a lot. It was really a very interactive session. And if still anyone wants any product clarification or any query, please feel free to approach us and [indiscernible] is always there. And thank you. Thanks a lot again. See you soon in next quarter.

[Shersingh Khyalia, executive]

Thank you, everybody.

[Operator]

On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.