Inox Wind Ltd
NSE:INOXWIND
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
66.64
254.34
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Inox Wind Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day, and welcome to the Inox Wind Q3's FY '21 Results Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sumit Kishore of Axis Capital Limited. Thank you, and over to you, sir.
Thank you, Aisha. Good evening, ladies and gentlemen. On behalf of Axis Capital, I'm pleased to welcome you all for the Inox Wind Limited Q3 FY '21 Earnings Conference Call. We have with us today Shri. Devansh Jain, Executive Director; Shri. Jitendra Mohananey, Group Financial Controller; and Shri. Narayan Lodha, Chief Financial Officer. We will begin with the opening remarks from management on the operational and financial highlights as well as the key updates for the sector. This will be followed by the Q&A session.With this, I hand over the floor to Mr. Devansh Jain and team. Over to you, sir.
Thank you, Sumit, for that. Good evening, everybody. I will take you through the operational highlights as well as how we see the sector moving forward and the significant opportunities. And I'll -- then I'll hand it over to Mr. Mohananey to take you through some of the key financial highlights for the quarter, and then we'll open it up to questions.To begin with, the company has become EBITDA positive after 3 consecutive quarters of losses. The business is gradually getting back on track as a result of ramp-up in new supplies. We have streamlined our manufacturing operations across all the plants and are now fully geared for ramp-up in supplies in the ensuing quarters, including Q4. We expect significantly high growth Q4 onwards on the back of new supplies for our existing order books as well as significant commissioning revenues as we ramp up commissioning on the ground.We have very significant repeat orders, which are on the verge of closure, and you could expect announcements on that in the days to come. Multiple repeat orders have also been won over this quarter, which will lead to liquidation of some of our stuck-up inventory, which will free up significant working capital for us. If you recall, we had about 50-odd megawatts of stuck-up inventory, which we've been carrying on for a period of time. That's now been tied up across retail orders, and we are in execution of those orders as we speak. We have a significantly healthy order book, which is upwards of 1,300 megawatts, and as we speak, as I mentioned, we are on the threshold of signing significantly large orders.Over this quarter, we have ramped up executioning and commissioning activities for various projects across Karnataka as well as Gujarat primarily being the Continuum order. We have recently commissioned ReNew's 18-megawatt in Gujarat and some small retail orders and are on the threshold of announcing much larger commissioning in the days to come. Another significant development over this quarter has been -- if people will recall, we had taken Board approval to raise up to INR 100-odd crores by diluting stake in a 100% subsidiary, Inox Wind Infrastructure Services Limited. We are happy to inform that we've received all the requisite approvals for that. And equity allocation for that is now well in progress. We expect to complete this from now until March.We've also achieved a significant milestone by achieving financial closure with PFC for 100 megawatts of our uncommissioned SECI SPVs. This will enable us to free up significant short-term working capital, which has been blocked in a 50-megawatt SP, which was lying uncommissioned due to certain delays at CERC and so on and so forth. Over the next 2 to 3 months, we expect to withdraw -- draw down this entire facility and free up our short-term working capital.Moving on, I'll talk about significant market opportunities. Globally, there has been a huge thrust on renewable energy. Recently, with Joe Biden becoming the President in the United States, we've seen the U.S. rejoining the Paris climate accord. I think buzzwords nowadays are tackling climate change, renewable energy and ESG. And I think we're seeing that across renewable energy stocks globally. We've also seen massive announcements in terms of renewable energy targets being done by various developed countries across the world. Besides that, India, of course, has upped its target to 450 gigawatts by 2030. In fact, China has recently announced a 1,200-plus gigawatt target by 2030.Over the quarter gone by, we've also seen Prime Minister Modi inaugurate the world's largest hybrid renewable energy park at Khavda in Gujarat. That's a 30-gigawatt renewable energy park. We expect that to begin playing out from 2023 until 2028. Many more such hybrid parks are in different stages of development, and we expect more such announcements from the government in the months and years to come.The significant advantage of these hybrid parks is that they are akin to solar parks, which the government had launched. This ensures land power evacuation facilities as well as permissions for building projects are all provided in a one-stop place by the state of the development agency involved. Hybrid tenders are increasingly gaining traction in the country where the minimum capacity of wind will be 33% of the contracted capacity. There is a huge pipeline of projects, which require turbines. We are gradually moving from a -- or we've kind of moved -- shifted from a buyers' market to, as I would call, more or less a suppliers' market, given the fact that with the whole transition in the wind sector, we're down to very few turbine manufacturers. And actually, most -- all of us have virtually cleaned up all our old inventories. So naturally, new manufacturing is taking place at a much, much more competitive product variance as well as higher margins.I won't spend too much time on some other developments which have happened, which we've spoken of various new IPPs, such as O2, Ayana, JSW entering the sector. We've also seen NTPC, Tata Power announce massive renewable energy goals. So all in all, we're looking at a very, very healthy pipeline, a huge growth in the days to come.Our 3.3-megawatt platform is performing -- is progressing well. Various components have now started arriving in India. We've already started work on the foundation and the tower manufacturing as we had mentioned 2 months ago. So in the next 2 to 3 months, we should have the prototype up and then we should be -- we would be carrying out commercial production simultaneously.With that, I'll leave the floor to Mr. Mohananey to take you through some of the financial results.
Thank you very much. Just to take you through key balance sheet initiatives or actions what we have taken during the quarter. During quarter 3 FY '21, the company has raised INR 199 crores by issuing NCDs at 9.5%. The proceeds were utilized inter alia to optimize working capital and retire higher cost debt. It will improve the short-term fund availability in the company. On the front of raising equity, IWISL has already started allocating the equity against multiple expression of interest received by the company. Certain other initiatives are also in progress, which will lead to significant reduction in the financial cost.On the front of financial numbers, the revenue and EBITDA compared to the preceding quarter, revenue of INR 204 crores in Q3 FY '21 against revenue of INR 171 crores in Q2 FY '21; EBITDA profit of INR 8 crores in Q3 FY '21 as against EBITDA loss of INR 33 crores in Q2 FY '21. So these were the key highlights and a broad overview of our operations and financial performance and how we see the sector going forward. I have along with -- I mean, Mr. Devansh Jain and Narayan Lodha to take questions now. Thank you very much.
[Operator Instructions] The first question is from the line of Mohit Kumar from DAM Capital.
And sir my first question is, sir, how do you see the execution panning out given that, I think, we are -- we must be closing -- some of the long issues might have got resolved during last 6 months, especially on the SECI side. So can we expect the execution to jump up now from Q4 or in the next couple of quarters?
Mohit, yes, I think we should see execution jump up significantly. We started supplies from Q3, primarily Q1 was shutdown period, Q2 was peak monsoon, so Q3 is when we started. We've -- as I mentioned, we've recently commissioned the ReNew's 18 megawatt, which in fact is over this quarter, current quarter, Q4, not in Q3. And various commissioning approvals are now being taken by Continuum at this point in time for us to go ahead with commissioning those. We've already executed a significant chunk ready for commissioning. There are some permissions which are awaited, which are routine permissions, which Continuum is expected to get in the next couple of days, and then we begin commissioning turbines progressively.
And secondly, on the Continuum order, which was supposed to happen, I think, by this fiscal year-end, are we on target to commission the entire thing in FY '21?
Well, the entire capacity was not to be commissioned within this fiscal year. But yes, I think a significant part of that capacity should be commissioned within this financial year. At least supplies from our end would be done to that extent.
And sir, anything on the new order inflow? You're talking to various clients, JSW or some other, how the -- can you just throw some light on this?
So Mohit, we have mentioned that we are on the verge of announcing significant repeat orders in the very near future. We've just completed Q3 while we're in the middle of Q4. So I think in the very next few days, I'm sure we should have some announcements coming up of significantly large orders, which we've -- which we are on the verge of closure. Beyond that, it's very hard to talk on specifics. We've also closed multiple retail orders in this quarter. We've not announced them yet. That's something which is work in progress. That takes care of all our old inventory which was left, 50-odd megawatts. So we're extremely enthused about that. We don't have any more old inventory left to tie up or stuck-up inventory of our liquidity to tie up.We are ramping up new manufacturing for supplies across these IPP supplies. And another interesting point, which I'm not sure how much you captured, Mohit, was our stuck-up asset, 50-megawatt SPV, which has been stuck up for a long time, we've achieved financial closure for that across multiple SECI projects from PFC. So depending on CERC order coming out in the near future, depending on what that order is, we'll either commission it as a SECI-1 project or as a SECI-2 project. That frees up almost INR 200 crores to INR 300 crores of liquid cash for us, which has been lying -- blocked since over a year.
That's lying in the inventory, am I right? Do you think that?
Standing, erected, I mean, virtually readymade project.
So is it a part of inventory right now?
Yes. No, well, it's part -- it's built -- it's -- so it's lying in our receivable.
[Operator Instructions] The next question is from the line of [ Abhishek Kumar ] from [ Span Capital. ]
Mr. Devansh? Hello?
Yes, sir, we can you hear you.
Yes, [ Abhishek, ] we can hear you. Can you raise the question? Hello?
[ Abhishek, ] we are unable to hear you.
Yes. Can you hear me now?
Yes, sir.
Yes, we can hear you.
Yes. In financial year '21/'22, in how many megawatts do you think of executing?
Look, in FY '21/'22, we expect extremely significant growth over FY '21/'22. I think, ballparks, we would be looking at almost about 500-odd megawatts in terms of execution.
So that should give you a turnover of around INR 3,000 crores to INR 3,500 crores of turnover?
Well, not exactly because to some extent, a lot of the supplies going forward are equipment supply. So it's not exactly 600 by -- 6 crores x 500, would probably be weighted average of about 5 to 6, so maybe about 2,500 to 3,000.
Okay. And as such the industry, like what sort of return on equity or return on capital employed over, let's say, 2 to 3 years should wind power energy manufacturers or EPC contractor do?
Look, it's hard to give you a return on capital employed and return on equity because primarily, the only 2 listed players are Inox and Suzlon. Suzlon has negative equity. It's a written off balance sheet. From our perspective, our capital has always been lean. We still have about -- don't have the exact numbers in front of me. We had extremely high return on equity in the good old days before the sector shut down, and return on capital is pretty healthy as well. But I think the metrics which we will follow going forward are historical EBITDA margins and PAT margins. And I think that's where we expect to be in the coming financial year.
And would you also be venturing into hybrid power projects with solar and wind together?
Look, so what hybrid means is for an IPP to do wind and solar. We will remain a wind energy player. We don't intend to get into solar. There is no margin in solar simply because the solar panels virtually are imported from China, unless you are Adani and you're selling up a 3 or 4 gigawatt manufacturing plant. EPC is something which we don't like. There's barely any money to be made. In fact, all the inefficiencies or cost overruns in any business happen on the EPC front. So we are not an EPC contractor. We want to play on manufacturing and technology of our [ enterprise. ]
Okay. And does the gas turbine have any role to play in the renewable energy in India as you foresee?
Look, it's too far away. Going forward, you could talk about peaking plants or you could have battery, wind, solar, gas. But from an India perspective, we are way, way, way too far in terms of adding peak load, small gas units and so on and so forth on larger winds projects, too far away.
[Operator Instructions] The next question is from the line of Giriraj Daga from K M Visaria Family Trust.
Yes. Hello, can you hear me?
Yes, sir, we can hear you.
Yes, you are audible. We can hear you.
Yes, sure. So I have a couple of questions. So first, like, let me go back to a little bit and see that we got these orders under the SECI-1, SECI-2, which happened almost 2, 2.5, 3 years back. And then obviously, we were following that it would be followed up by some good amount of business for us. But then it generated a problem of not signing PPA, land acquisition and other things. So what gives you confidence now that we should be able to achieve this execution? Has things moved materially on the PPA side? Are the state has -- or the SECI has been able to sign back-to-back PPA with the other state or the land acquisition parts are clear, the transmission lines are clear? So that is first part of the question. So if you can take one-by-one, that would be okay.
Look, what -- we can go back in time when SECI auctions were carried out, now it's been a long time since then. Fundamentally, what happened was once auctions were announced, you -- for 1 year, you didn't have auction guidelines. So even if you have a readymade project, you could not commission and build out projects, number one. Number two, thereafter, majority of the green energy corridors you need. For example, in our case, in Inox Wind's case, our PGCIL line and grid substation were delayed by over 18 months. The problem had begun when the government shifted from feed-in tariff to auctions, you have to give a grandfathering period. You don't just press a button and expect everything to be ready the next day. Globally, almost 40 countries have transitioned from feed-in tariffs to auctions, and virtually every country had a grandfathering clause. Unfortunately, in India, we never had a grandfathering clause, which led to complete pandemonium and disaster and collapsing of companies across the board on the manufacturing side, be it wind or erstwhile solar manufacturers back in the day.I think what gives us the confidence and what's -- why we see the -- we are at this threshold of massive growth in the wind energy cycle now is simply because regulated -- regulatory obstacles are behind us, green energy corridor obstacles are behind us, transmission line, land acquisition obstacles are behind us. I'm not talking of minor delays or a couple of land points getting stuck, which are routine, which happened even during the FIT routine. Fundamental delays, fundamental disclarity on regulatory issues, fundamental issues in getting PPA approvals, signing PPAs are now behind us. There are no such issues plaguing the sector anymore. In fact, there's a huge pipeline of auctions that PPA has already won, which require supply now, and there is a very limited pool of suppliers in the market. I'm sure some of you who follow the wind energy sector would know Gamesa has virtually exited turnkey development in India. Vestas has exited turnkey development in India. It's virtually down to Inox and Suzlon who are doing turnkey development in India.So going forward, yes, turnkey share is going to probably reduce to 30%, 40%, vis-à-vis 100% or 80%. But even within that, a lot of IPPs require handholding in terms of land acquisition, castings, hybrid in terms of doing foundations, erections, so on and so forth. And Gamesa investors have virtually pulled out of this. So it's a limited pool of manufacturers. Everybody is now working for profits. No one is -- naturally inventory's out, people have burned a lot of money over these past 3 years to survive, and naturally who's survived is now going to rule the roost. So I think quarter-on-quarter, you're going to see very, very significant growth in the wind sector. Honestly, we probably would have seen that in FY '21, had it not been for 6, 7 months of COVID and then the monsoon session, which follows for Q2.
Okay. So just a follow-up there. I understand on the regulatory part. But how -- but so -- what we are hearing is that even in the solar also, the first -- like, last year, when the solar tariff was 2.4, 2.5 and then when they are touching now 2, people are again afraid of signing the 2.5, 2.7, 2.8 kind of a tariff. So where we are in terms of PPA signing under the SECI option and the...
Look, look, look, auctions are carried out by various agencies, yes? There are no central agencies which have carried out PPAs where they've backed out of moving forward after auctions are conducted. At the state level, we've been seeing this for years now, where they take out tenders, they have the right after the tender is conducted to whether move forward or not move forward. So if you're referring to one of the recent solar tenders in Gujarat where they've not moved forward, they have all rights. Nobody has lost money because effectively, it says after the tender is auctioned and you won, thereafter before -- until they sign the PPA, nobody needs to move forward. So no one's money is stuck, no one's inventory is stuck. I mean, it's a small 700-odd megawatt because that was done at about 2.9, and now tariffs are at INR 2-odd. So effectively, if I would be in their place, putting aside morals, I would probably want to work for the state and say INR 1 for the state, which would run into hundreds and thousands of crores over a period of 25 years. So these are one-offs, which happen once in a while in some of the state tenders. This is not prevalent in any of the central tenders. And mind you, 90% of all the tenders or 80% of all the tender -- 80% or virtually all the tenders coming out in the country today are central tenders.
Okay. So out of -- like on Slide #14, you have given 17,000 crore of -- worth of auctions. So you believe the majority, we are -- the regulatory hurdles are behind us for the 17,000 megawatt -- or 17 gigawatts of auction which had happened so far?
Yes. There are no regulatory hurdles burdening these 17-odd gigawatt, of which about 5-odd gigawatt is anyways commissioned or maybe 2, 3 gigawatt does not come in, but barring the NTPC 1,200 megawatt, there is no regulatory hurdle on any of these.
Okay. My second question is related to a 3.3 gigawatt of new WTGs...
Megawatt. Megawatt.
Yes, 3.3 megawatt, sorry. So any idea that what can be the tariff. So earlier, we touched the low of on the vendor on 2.5, so that was the -- our own minimum, 2.45. So do you think we would be able to go further below that number, the 3.3 megawatts of turbine? Or what is that the PLF should be higher about 300 basis point higher compared to the earlier turbines? How do you see that?
Look, you simply move to better technologies, not just a nameplate capacity of 2 becoming 3.3. You move to larger turbine sizes because the cost of energy declines as you move towards larger turbine sizes. Now naturally, the cost of energy decline means that for an x tariff, if on a 3.3 the cost of energy has declined, you make a higher return or you can afford lower tariffs. So I'm not going to spell out what kind of tariffs we can sustain with our 3.3. Fact of the matter is we are the lowest cost producers of turbines in India, probably globally, and we could sustain all the tariffs of SECI-2, 3 without bearing losses on a marginal cost basis. Having said that, our 3.3 is extremely competitive. I think prevailing tariffs should give a very healthy return to IPPs as well as ensure we make our internal margins, which we used to make historically.
Okay. My question next is on financial. So if you can give me the gross debt number and gross receivable number for this quarter that would be helpful.
The gross?
Gross debt and gross receivables. So you gave net debt and net receivable in the presentation, so what is the gross debt and gross receivable number?
I think the gross debt would be upwards of -- would increase by about 150 -- gross debt would be up by about INR 150 crores. We have INR 150-odd crores of liquid cash in the company.
Okay. And gross receivable?
Gross receivables net of write-offs would be about -- approximately INR 700 crores, but we'll have to check that. You'll have to connect with us to get those details. We don't have that readily, but approximately INR 700 crores to INR 800 crores.
Okay. Last thing is that you are guiding about INR 2,500 crores to INR 3,000 crores, and in the PPT you mentioned...
No, no, I'm not giving. That was a broad question. We refrain from issuing guidances in -- on Inox Wind because the past 3 years has been such a disaster in terms of the government. But yes, we would be looking at extremely significant growth. So if you look at the last financial year...
No, my question was that we have given in the presentation that INR 7,800 crore worth of order will be executed in the next 24 months. So I'm not holding you for a year, like FY '22 or FY '23. But do you think in these 2 years put together, we would be able to achieve this kind of a revenue number combined?
Well, we certainly would aim to do so. Back in the day, we were achieving a top line of about INR 4,000 crores. So honestly, we've survived this period and the opportunities are phenomenal today. So I think, broadly, yes, we would like to get back to about INR 4,000 crores of sales per annum. But that's going to happen gradually because as you may understand, ramping up also requires incremental nonfund-based limits from various banks. Some of our bankers have been very supportive over this period. But as you may also be aware, majority of the banks have exited the renewable energy sector, private sector banks. We were always working with private sector banks. So yes, we would need to tie up some amount of nonfund-based limits as we keep moving forward, which I think should not be a problem in terms of getting as we keep ramping up our operations and as we get into a cash profit zone. So yes, but that's something which will take some time to get to that kind of trajectory.
So apart from bank, any other risk you see? Apart from bank funding you highlighted, any other risk which we should be keeping in mind for this number to be achieved?
As of now, no, but yes, routine business risks which anybody goes through, but I don't see any other significant risk.
[Operator Instructions] The next question is from the line of Ketan Gandhi from Gandhi Securities.
Devansh, what is in terms of time line we have to still set up the proto for 3.3 megawatt. And after that, we need to have the type certification and then only we can go for the commercial production. So in terms of time line, how do you see that happening?
Good to hear from you, Ketan bhai, always a pleasure talking to you. So one thing which I just wanted to elucidate and make clear is this 3.3 megawatt turbine. It's been running globally now for about 11 years. We are a licensee of AMSC. Yes, we have exclusivity in India. But this 3.3 megawatt turbine has been running in Korea, China and Europe for almost 10 to 11 years. When we introduce in India, it's going to be introduced for the first time. But the turbine is a turbine. Whether you put it up in China or Korea, it's one and the same. There it works under X brand; over here, it will work under the Inox Wind brand. Our supply chain is ready. We've already started receiving many components. As we had mentioned last time, the foundation work was going on. The tower is under different stages of production now. Many of our components are ready. I think right after the Chinese lunar holidays, we have inspection of some of our key companies, which will then be shipped out to us. So we expect to put up the so-called prototype over the next, I would say, by April, broadly. April, May, we should have the prototype up and commissioning just follows then.What we will also be doing is parallelly running commercial production. So from a prototype testing perspective, it will probably take us about 45 -- maybe 60 days of testing period. So let's say, we'll get June, July to do the testing. That's it. Then we are done with the type certification. But we would be running -- we would be starting commercial production parallelly for the 3.3 megawatt turbine. We have enough orders for the 3.3 megawatt. The fact is we have still a very large chunk of 2 megawatt orders, which we now need to supply for Continuum and some of the SPVs going forward. So it's a blend. We will keep supplying 2 megawatt, and we'll keep ramping up our 3 megawatt supplies as we move forward. So it's -- so assume I do 100 megawatt next year in terms of total volume, it's probably going to be about 60% of next year's going to be 2 megawatts, and 40% of next year is going to be on 3 megawatts. So we have a long enough period to keep ramping up our 3-megawatt supply in the market.
Sure. Because even AMSC has said that they have started aggressively supply of the 2 megawatt, and they're also helping us in getting 3.3 also.
Correct. Correct. So we had not picked up any ECS when we had a lot of inventory. We kind of ran out. So we've -- we're absolutely live with them. It's a great healthy relationship. They've actually made the prototype, ECSs, I mean, or you -- rather you called it prototype. They've also manufactured the ECS system for us now for the first 3-megawatt turbine, which we need in India. And I think, as I mentioned, post the lunar year, once we pick up our key components, which are under inspection, we are good to go on our 3.3 megawatt turbine.Look, what was very important, Ketan bhai, is for us to tie up and liquidate -- or tie up deals for liquidation of all our old version turbines, which naturally were not going to IPPs. Those were going across retail orders, and over the past 2 to 3 -- well, 3 or 4 months now, we've tied up a significant amount of retail orders. In fact, we will be announcing some of them in the days to come as well, which is holding us in good stead now.
Sure. And sir, we have announced the demerger of the holding company of our wind asset, and we have significant amount of ICDs from the holding company. So what is your thought or management's thought process on collapsing the structure of holding company to the operating company?
So Ketan bhai, that's work in progress. That's the final phase of the restructuring exercise we started as a group about 2 years ago. Effective 1st April, 2021, a lot of the intra group ICDs will get canceled out, which would lead to significant reduction in interest costs for Inox Wind. And there are various -- and the final implementation, which we will be doing of collapsing the 2 together, the Holdco and Inox Wind Limited, will lead to further cancellation of intra-group advances in that way. So the balance sheet will get lightened up, intra debt will go out, interest costs will reduce on the balance sheet and we'll capitalize our balance sheet further for growth in the days to come.
That will be excellent because around INR 600 crore, INR 700 crore of [indiscernible]
Correct. Yes. You're absolutely right.
[Operator Instructions] The next question is from the line of [ Anand Daga, ] an individual investor.
Devansh, can you hear me?
Yes, good evening.
Right. So again, another quarter gone by where we at least have turned around, got the EBITDA in. So hopefully, when do we propose to come back in the black totally? I mean, we're planning a turnover of around INR 600-odd crores in the quarter. I'm just dividing the INR 2,500 crores into 4. So from a turnover of INR 200 crores in this quarter, if you're looking at maybe INR 600 crores, that's a huge jump.
Look, so I think I don't want to speak ahead of time, but we are doing it very cautiously, conservatively. As I mentioned last time as well, and it's always good talking to and hearing from you and your encouraging words, we expect significant growth from this number in Q4 and then naturally, Q1 onwards in the next financial year, you're going to see significant growth, which would kind of stabilize at the broader numbers I spoke about. We -- so we've turned EBITDA positive in this quarter. God willing, we should be cash PAT positive in the next quarter. I think that's the goal we are following. And then Q1 onwards, we will always, god willing, be PAT positive at all points.
Well, great to hear that. Why is the interest cost suddenly going up? I mean, every quarter, the interest cost is going up consistently.
So this quarter seems -- is an outlier simply from the perspective that we've had those NCDs, which we've raised. So there are onetime costs associated with that as well as the money coming in and then retiring the higher cost debt. So to some extent, you're seeing an increase because of that. Otherwise, you'd probably have a decline to the extent of INR 2 crores to INR 3 crores this quarter.
Yes. Absolutely. So in the future, I mean, this should be sort of a peak hit and it should be on the decline in the future?
Absolutely. The peak would have probably been what we were at last quarter. This is onetime charges. And then...
Okay. No, that's a -- it's huge. I mean, there's a INR 10 crores jump almost compared to last quarter. And the funds we raised were around 200 -- I mean, INR 200-odd crores are from the NCD?
INR 200 crores plus INR 200 crores, so INR 400 crores charges, which came into the P&L. Besides we had to retire the higher cost debts, which we had to pay certain upfront fees. So that kind of reflected here. As one of the investors, Ketan bhai, was also talking, we've received the Holdco approval. So effective 1st April, 2021, we're going to see a significant cutting of intra group ICDs and advances, which will kind of take away a lot of the interest cost from the balance sheet as well.
Great. That will be good. And what news on our O&M, the BUs and the -- something happening there? Anything there on the O&M front?
So O&M is doing very well. I think it's a very high-margin cash profit business for us.
But we are planning to monetize that some way or the other?
So we took approval to monetize about INR 100-odd crores. So equity issuance is already in progress now from now until March. We've already -- so this is over Q4. Until Q3, we were awaiting our banking approvals. We received that in January. So as we mentioned, even in our presentation, equity allocation has already started. So that will take away INR 100 crores of -- we intend to raise about INR 100 crores on that front.
But that would be -- we'll be divesting what percentage roughly of the subsidiary?
About 10% of the subsidiary.
Okay. Around 10% would get us INR 100 crores?
Yes.
[Operator Instructions] The next question is from the line of Giriraj Daga from K M Visaria Family Trust.
Couple of follow-up questions. So out of this 17 gigawatts, how much have been ordered and what portion is yet to be ordered?
Look, I don't have access to the exact data. But what I do know is there is about 6 gigawatts of capacity for which orders still need to be tied in. But that's broad estimates. We've seen about 4 to 5 gigawatts of commissioning done out of that 17 gigawatt list which you see. And I believe about 3 to 4 gigs is probably not going to see day of light (sic) [ light of day ] in that. So I believe there's about 5 to 6 gigawatt of capacity, which was required to be tied in -- 6-odd gigawatt was -- maybe 4 to 5 is about -- 5 is commissioned? 3-odd will not see light, 3 to 4 will not see light, 9; that leaves about 8, so probably tied up about 3 -- So I think about 4 to 5 gigawatts still requires time to happen.
No, no. Sorry, you mean, so out of 17, 4 or 5 have been commissioned, 3 to 4 you say will not actually come only?
Will probably not see light. People will probably not be -- so you've seen about 5 gigawatts of commissioning. About 3 to 4 gigawatts is probably not going to be executed, which were the 2.4, 2.5 tariffs and 1 NTPC is not happening. So that's about 4 gigs, which takes us to about 9 gigs, leaves us with about 8 gigs, of which I would tend to think about 3 is being tied up. So broadly, I would tend to think about 5 gigawatts is still to be tied up in terms of supplies.
Okay. Okay. Secondly, you mentioned in your PPT that about 3 gigawatts of this year will likely to be execution. This is as per -- because as per your -- obviously, your -- this year has not been good for us. So do you think we will be able to execute the 3 gigawatt this year? So I'm talking about Slide #15, where we had mentioned 2.99 gigawatt.
That talks of tariff cap removal. So what we expect this year -- I think there's a typo error there. I think we expect this year to broadly be on similar lines as the previous year. Thanks to the whole COVID impact, it's probably going to be between 1.5 to 2. But next year, FY '22 is when we expect this to probably jump up to 3.5 gigawatts.
So FY '22 and FY '23, both year can be 3, 3.5 gigawatts?
It will be better than FY '22, but FY '22 should be about 3.5 gigs. We believe the market will probably stabilize at about 4-odd gig -- 4 to 5 gigawatts on the wind side over the next 2 to 3 years.
And that will remain for the next 4, 5 years? Or that is only the peak...
I think for the [ year ] at least, if not more. The government is aiming for 10 gigs and the number of tenders they're taking out should be much more. But on the conservative side and given various other land, grade, blah, blah, blah development issues, I think the sector should comfortably be looking at doing 4 to 5 gigawatts year-on-year.
Okay. Secondly, what is our CapEx for the 9 months, including the maintenance -- or the common infrastructure CapEx which we incur?
I don't have that readily available with me. I think you'll have to connect with us for us to pull that data out.
And FY '21 full year CapEx number guidance you have?
No. I mean, look, so again, when we do common infra, it's not CapEx on our books because the customer pays us. So we are not doing any CapEx on...
But the book is under CapEx line item?
We are the trustee of that CapEx. So it's a function of how much is turnkey and how much is non-turnkey. So effectively, let's say, 100 megawatts is turnkey, the common infra which we carry would be about -- JM, I would say, about 50? 50 lakhs?
Yes. Yes. 50 lakhs.
50 lakhs to 60 lakhs -- 50 per turbine. About 100 megawatts will give us about INR 60 crores -- 60 lakhs a turbine, which is 30 lakhs. So that would be about INR 30 crores of common infra per 100 megawatts in terms of turnkey.
Yes. No, I mean, like FY '21, have you incurred any CapEx there? So what is the number? And FY '22, what is the CapEx number?
We don't have those numbers, but yes, because we are executing the Continuum projects and some retail orders, I think we would have about 200-odd megawatts...
Yes, yes. So for exact numbers, you can get in touch with us and we'll reply to you.
Okay. And FY '22, do you have any visibility on this CapEx number?
No.
Well, honestly, it's a theoretical thing. So it's really not making any impact on us.
Okay, okay.
As a company, our CapEx is probably INR 20-odd crores of sustenance CapEx, nothing else. I mean, which really has not happened in the past 3 years. So now on the 3 megawatt, we probably will have a INR 50 crore CapEx towards molds over the next 1, 1.5 years. Otherwise, we have no other CapEx program.
[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Sure. Thank you. Thank you for your interest. It's always a pleasure connecting with all our investors. I think the quarter gone by, we focused on multiple things if I basket them into 3 or 4 channels. One is to fix the working capital requirements of the company. So we've converted a lot of our short-term capital into long-term capital. We've got that -- we've done that, and that's behind us. We had some nonfund-based limits, which we need to tie up for incremental ramp-up in our operations, which is tied up to certain extent, and some of it should get accrued over March. We have achieved financial closure for our SPVs. It's significant in the sense that it enables us to quickly liquidate INR 200 crores to INR 300 crores of our stuck-up receivables, which we expect to do over March and April.We've also achieved all -- we received all the banking approvals for our equity allocation. So we now have the equity allotment in progress, which will take off about INR 100 crores from our balance sheet and give us INR 100 crores of profit on sale of investments. So that's happened primarily on the financial side.In terms of execution side, we are focusing on ramping up operations. I think all the plants are well established. As we did speak, we have seen some ramp-up in our manufacturing piece because our commissioning is catching up. Over Q4, we expect to have a significant ramp-up from our Q3 numbers, both in terms of supplies as well as commissioning revenues. And we expect that momentum and trajectory to carry on in the quarters to come.I think the third key part is we've tied up a lot of retail orders over this period to kind of liquidate a lot of our stuck-up older version models in the system. And I think a lot of that cash flow and liquidation is going to play out over Q4 and Q1. We are also -- we virtually -- we're on the verge of closing very, very significant repeat orders, which we would be announcing very soon. So I think these are 3 fundamental areas which we focused on over this quarter. Our goals over the next quarter are pretty straightforward, ramping up our operations further, which are well-established and well-aligned for the ramp-up to carry out more and more commissioning. We have multiple turbines now already ready for commissioning, awaiting the final clearances from Continuum SECI perspective, and then we start our commissioning activities for that project.We have our 3.3 megawatt, which is progressing well. We have various components, which are in India, various components now being readied, in final inspection stages, which will get shipped out soon. So we're extremely enthused about that. And I think the fact that we've turned EBITDA positive in this quarter after 3 or 4 -- 3 consecutive quarters of losses, god willing, we should be back to -- back in the black -- cash black from the next quarter. And we hope to report back to you and come back to you with good news in the days to come. Thank you for your interest and look forward to connecting with you all soon. Thank you.
Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.