JSW Energy Ltd

NSE:JSWENERGY

Earnings Call Transcript 2024-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to Q1 FY '24 Earnings Conference Call of JSW Energy hosted by JM Financial. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhanshu Bansal from JM Financial. Thank you, and over to you.

[Sudhanshu Bansal]

Thank you, [ Yasasri ]. Good evening, everybody on [indiscernible]. We have you all to the conference call of JSW Energy Limited to discuss the first -- 1Q FY '24 results. We have with us the leadership team of JSW Energy comprising of Mr. Prashant Jain, Joint Managing Director and CEO; Mr. Pritesh Vinay, Director, Finance and CFO, Mr. Bikash Chowdhury, Head Investor Relations and Treasury. Thank you so much, sir, for your kind presence and giving JM financial the opportunity to host the call.

With this, I would like to hand over the call to Mr. Prashant Jain for opening remarks and taking the call forward. Over to you, sir.

[Prashant Jain, executive]

Thank you. Good evening, ladies and gentlemen. During the quarter gone by, we saw the power demand very muted at 1%, primarily due to -- in the month of April and May, we saw the unseasonal rains and the power demand was close to flat or negative. However, the power demand improved in the month of June at 4.5%. And in the July also, it is going robust at 5.5%. The total installed capacity in the sector stands now at 422 gigawatts. During the quarter, there was a total capacity addition of 5.8 gigawatt, of which 4.5 gigawatt was renewable capacity with 1.1 gigawatt of wind and 3.3 gigawatts of the solar.

During the quarter gone by, the total energy generation was up by 14% for the company. After that, 911 million units came from Mytrah portfolio, another 106 million units from Group captive and [indiscernible] portfolio and 421 million units additional came from Ratnagiri. However, there was a lower water at all our hydropower plants. Around the country, there has been an issue and there was a drop of 428 million units from our hydro business. And in the Barmer plant, there was a scheduled maintenance because of which 136 million units were down.

With that, the total generation from the company during the quarter was 6.7 billion units.

In terms of the EBITDA, which was up by 18%, the INR 370 crore EBITDA additional came from Mytrah portfolio. Actually, the pro data pro forma EBITDA for the quarter for Mytrah was INR 370 crores, but two of our SPV stake, they were got consolidated later as part of the April month. Because of that, the INR 30 crore is not coming into this. There is also, as I mentioned, because of Barmer as well as hydro, lower generation were there, but these two assets are under the long-term PPA. There is a INR 80 crore EBITDA -- lower EBITDA as compared to previous year, but this entire INR 80 crore EBITDA will get recouped in the subsequent quarter. Because in the two-part tariff PPA in our Barmer plant, we get our capacity charge based on 80% availability, and we will be achieving the 80% availability. So this will get recouped.

Similarly, the energy generation when we generate beyond the design energy, which we have been achieving all these years and which we will be achieving this financial year also. So the INR 66 crores EBITDA reduction as compared to the previous year in hydro and INR 14 crores in Barmer, both will get recouped during the rest of this financial year. The INR 91 crore impact came because of the lower merchant sales because of the subdued demand in the month of April and May. But we are quite confident that the tariffs are quite robust, and the spreads are also very good. And during the rest of the financial year, we will be achieving what we have budgeted and planned for in terms of the merchant sales.

In the country, we have been seeing the good trend for the solar generation. The [ CUS ] for the country as a whole has been consistently improving. Our specialties, both Vijaynagar as well as Mytrah, they did exceptionally well as compared to the P90 level, Vijaynagar solar plant generated 145 million units as compared to P90 generation of 134 million units. Similar was the trend in Mytrah. We improved our plant availability by 17 basis points. And in Mytrah, first time, it generated 216 million units in the first quarter which is as compared to 193 million units of P90 generation. So the Mytrah plant integration as well as the plant performance is better than what we had planned earlier.

Similar was the trend in the Wind. In case of Mytrah, when we took over the assets in the month of March on 29th of March, the total machine availability was in the range of 85%, which has been improved. And as I'm speaking, the machine availability is 97.5%. And by middle of next month, we will be achieving 99% availability, which we have planned for.

During the quarter, the total machine availability was improved by 680 basis points, and we generated 695 million units. There were total 80 turbines, which were out of order. Right now, only 3 turbines are out of order. And we are quite confident that the plan which we have [ enlisted ] for Mytrah, in terms of the EBITDA improvement as well as in terms of the total generation improvement, we are on track ahead of the schedule. The planned EBITDA of INR 1,650 crores, which we had guided for the next year, we will be seeing a very encouraging trend during the current financial year itself, and we will be increasing the trend and improving the trend expeditiously.

In terms of the project update, the Ind-Barath performance is on the project integration is quite encouraging and quite good. We were planning to start both the units by end of the financial year. I'm happy to share with the -- when we opened the turbines for the maintenance as well as the boiler, we got very positively surprised with the condition of the plant and we are on -- putting the unit on bar within this month. And with the transmission line and other things, we are expecting that by October or maybe in the current quarter itself, we will be commissioning the first unit. The second unit is also expected to get commission in the current financial year. So we are expecting that we will be having generation for 1 unit of 350 megawatts in the second half of the year, which will be improving our generation as well as our EBITDA profile going forward.

We have already started participating in the auctions in the [ East Valley ] and [ NCL ] and some of the coal we have already secured and balance coal, we are securing in due course of time. Our update on Kutehr is quite good. We have already completed the 98.5% or 99% of the tunneling, and powerhouse erection has already been started, and it is moving as per the schedule. The recent rains in Himachal Pradesh was disrupted because of certain land slides in and around our Kutehr budget, but things are getting normalized and in next 7 days time, we will be back to normal.

And on our operating assets also in Himachal, there was no impact of the range other than there was a preventive shutdown we had to take because of higher [indiscernible] level which was there in the basin. And -- but both, plant as well as the people, are in -- absolutely safe and there was no impact whatsoever. On our city projects, as of now, 150-megawatt is fully commissioned, we are on track of what we have guided for. And then all 3 sites, Karnataka and 2 sites in -- from [ Minaru ], they are -- the erection and commissioning is going on in full swing.

In terms of the merchant market, which I just [ stepped ] on in the initial remarks, which is looking quite attractive. The rates are also quite attractive. During the quarter, the rates were very good at close to INR 5.5. The volumes were also up by 34% during the quarter. And also going forward, the way the demand trend and the prices we are seeing as we are speaking in the monsoon month, we are seeing the good prices of close to INR 5 to INR 5.5 on an RTC basis, which are quite remunerative for our company. And so we remain quite optimistic to the [indiscernible] what we have seen a little [indiscernible] compared to a tedious year in the Q1. In the rest of the year, our merchant volumes will be quite good and sale will be the spread.

Now I am asking Pritesh to take over and explain on the financial performance.

[Pritesh Vinay, executive]

Thank you, Prashant. A very good evening to all the participants. So maybe I'll take a leaf out of where Prashant stated about the overall generation. So if you look at the total net generation for the quarter was up by 14% at about 6.7 billion units. The total revenues for the quarter stood at just over INR 3,000 crores, which was actually down by 3% Y-o-Y compared to a higher net generation, but this is primarily because you would be aware that for our Thermal businesses, the fuel cost is a pass-through. So on a Y-o-Y basis, the coal prices have come down sharply and therefore, from a pass-through point of view, that reflects the lower tariffs and therefore, lower realizations. However, that is largely EBITDA neutral.

So that was on the revenue side. Prashant has already talked about EBITDA for the quarter stood at INR [ 1,470 ] crores. I'd just like to spend a minute more on that. If you have access to our results presentation, which was uploaded some time back, and if you look at Slide #8, where we've given an EBITDA bridge, this kind of captures what are the moving parts. Prashant mentioned that if you look at Mytrah portfolio as a whole actually for the quarter, Mytrah assets delivered an EBITDA of INR 400 crores. However, from a consolidation impact point of view, one of the SPVs got acquired on 6th of April and the second 150-megawatt SPV got acquired on 15th of June. So that was available only for the last 15 days of the quarter. So therefore, on a prorated basis from a consolidation accounting point of view, we've shown INR 370 crores, but the underlying performance is actually INR 400 crores. INR 30 crores was the additional EBITDA that we got from the new solar project, 225 megawatts as well as the second project of 150 megawatts of which were operational through the quarter.

Prashant did talk about the impact of lower hydrology at Hydro which impacted generation. Hydro generation was down by 27% Y-o-Y. But in terms of EBITDA, that was a drag of INR 66 crores. However, if you look at our cost track record, as normal, we are able to meet the design energy, which we have consistently done every single year for the 20-year and the 12-year operating track record at both, Baspa and Karcham Wangtoo. We are able to recover this in subsequent quarters. Incidentally, while the PLFs were lower, the plant availability during the quarter stood at a very healthy 108% against a normative requirement of 90% to recover the full capacity charge.

Similarly, for Barmer due to certain planned shutdowns, the availability was lower, and therefore, there was no full recovery of capacity charge was not there. However, again, like we have done for every single year in the past, this item is dependent on availability for the entire fiscal year, and we are very confident that like every single year in the past for the -- in the remaining 9 months, we will be able to get to overall availability and therefore, I would like to -- timing mismatches likely to be recouped in the remaining 9 months of the year.

And of course, Prashant did talk about the impact of lower merchant sales, which was about INR 90 crores drag and of course, the increase in O&M expenses, et cetera. That is the bridge on EBITDA side. I'd like to also take a minute on explaining the finance cost for the quarter. If you look at the headline, what was INR 193 crores last year, Q1 has landed at INR 486 crores. So if you look at Slide #9, where we have given a detailed bridge to explain the impact of that, INR 170 crores is incremental interest due to the debt on the Mytrah portfolio which we had explained last time that was done at the time of acquisition.

On account of a very attractive refinancing and debt sizing that we have done, we prepaid the older lenders of Mytrah portfolio because of which there was a onetime prepayment of the refinancing impact of about INR 40 crores. This is a onetime item will not be recurring going forward in subsequent quarters and the impact of additional debt due to Ind-Barath acquisition as well as the levering of our thermal balance sheet that we are doing to fund our growth projects in the form of sponsor equity contribution, that was a combined impact of about INR 80 crores. Also on a recurring basis, everything else remaining the same. The summer is likely to be more in the order of INR 445 crores going forward, unless the lever of the thermal assets a bit more, which will again get added.

So that only can have a bridge and therefore, coming all the way down to the profit after tax for the quarter. On a headline basis, Q1 of last year, the profit after tax stood at INR 560 crores. But last year, first quarter, we had received a repayment of a loan that was given to a third party in the prior years. And therefore, that was an exceptional gain of INR 120 crores, strip off that, the underlying profit after tax for the first quarter of last year was INR 440 crores. Again, there's on the same Slide #9, if you look at the bottom portion the PAT bridge explains in detail that how the Mytrah assets and the new renewable assets that we are adding added about INR 85 crores at the PAT level on a combined basis. There was roughly INR 55 crores, INR 60 crores drag due to the timing mismatch of the full capacity charge recovery at Hydro and Barmer and likely to be recouped in the remaining part of the year and the impact of Ind-Barath as well as the onetime refinancing impact.

The merchant -- lower merchant sales and profitability impacted our PAT on a Y-o-Y basis for almost close to INR 100 crores. So that is the PAT bridge. The next number that I would like to talk about is the leverage and the leverage profile. So if I discuss, you could look at Slide #11, which shows the net debt movement on a sequential basis for what has happened since March Q2. You see that on the operating assets, which is dark portion on the bottom portion of the chart, the net debt stood at over INR 10,100 crores. This has gone up by almost INR 160 crores quarter-on-quarter due to additional debt on the operating businesses.

On the Mytrah portfolio, actually, the net debt has come down by about INR 350 crores on a quarter-on-quarter because of -- as Prashant was saying, all the higher generation due to better availability of machines translating into higher EBITDA and some working capital release in terms of liquidation of receivables. So therefore, the cash has come -- has gone up. There's been some amount of debt repayment as well. And for the blue portion, which is the amount of debt which is sitting for capital work in progress, which is likely to accrue revenue and EBITDA in future years. That went up about INR 920 crores quarter-on-quarter to just over INR 4,500 crores.

So net debt, if you look at on the operating businesses, there's about INR 18,400 crores of debt [indiscernible] which is being serviced by a normalized cash flow of close to INR 5,300 crores which translates to our net debt-to-EBITDA on the operating business of 3.5x. This is consistent with the guidance that we had shared earlier with the markets as part of our strategy, 2.2x that when we pursue growth, we would expect our sustained normalized net debt-to-EBITDA to stand in that 3.5 to 4x range.

If you look at Slide #12, this shows a bunch of metrics, but I'd just like to point out two. One is the top right-hand chart where we track the cash returns on the underlying business. So we continue to track at more than 17% cash returns on adjusted net worth for the last several quarters. And if you look at the weighted average cost of debt, excluding the Mytrah portfolio, that stood at just about 8.5% and including the Mytrah portfolio is at about 8.7%.

And the last number I'd like to talk about before I throw the floor open for questions is on the receivables. So if you look at Slide #13, on a year-on-year basis, the headline receivable number -- sorry, on a quarter-on-quarter basis, the headline receivables have come down by 20%. But in terms of base sales outstanding, it is largely similar. It was 60 days in March. It stands at about 58 days at the end of June. But the encouraging trend is this that the overdue proportion is coming down, the share of overdues are lower. As a matter of fact, in the first 2 weeks, after the end of the quarter. There's been a strong connection. We've already received close to INR 240 crores. And as we are speaking today, the overviews are [indiscernible].

Similarly, on the Mytrah portfolio, I'd just like to request you to look at Slide #60, 6-0, where we've shown what's happening with the Mytrah receivables cycle there. Again, there's a very encouraging trend. If you look at the bottom portion, every month consistently, what we are collecting vis-a-vis, what we are [ billing ] is between 125% to 200% of that. So again, that liquidation of receivables trend continues to be healthy.

So with that, I'll take a pause and operator, will request you to open the floor for Q&A, please.

[Operator]

[Operator Instructions] We have our first question from the line of Mohit Kumar from ICICI Securities.

[Mohit Kumar, analyst]

So congratulations on significant progress on some of the under construction assets. My first question is on the mix EBITDA [indiscernible]. I understand that this has been dominated portfolio, [indiscernible] and the first quarter seems to be a decent number. My question is: Do we think that we are on target to achieve [ 16 billion ] EBITDA in FY '24? Or do you think it is likely to materialize in FY '25 full year?

[Prashant Jain, executive]

Thank you. Thank you for your question. So there are the two aspects of it. One aspect is that putting the turbines on track and improving the availability of the assets. So what was envisaged to go and reach up to a 99% availability more by December 2023. As against that, I have already given a guidance that as we are speaking, only 3 turbines are down and then by 15th of August, we will be at 99% of availability.

So what we plan we will be achieving 5 months or 6 months -- 5 months ahead of schedule. So that's part A. Same is the situation in terms of the Solar. And we had given a guidance that we will be achieving INR 1,650 crores EBITDA in the FY '25. So our guidance is still remains INR 1,650 for FY '25. Current year, we are expecting that the fixes majority of the wind season is -- part of the wind season will also be captured during this year. We will be doing better than what we had planned. Originally, I think with my -- yes, we have talked about 18 to 24 months' timeframe, EBITDA improvement, but I think we are reaching on achievement side is close to 6 to 7 months' timeframe.

But some of the wind season is going away. By the time all these things are there, but we will be doing better than what we have planned.

[Mohit Kumar, analyst]

Second question on the PSP, where -- have you financially closed that project? And -- or have it broken, we have started the work on that particular project plan? And how many PSP sites are under our control in the PSP size that we hand it over to us?

[Prashant Jain, executive]

So we have already close to 9,000 megawatts of the [indiscernible] projects have been allocated to us. And of that, 80% of the projects we have already prepared the DPR and then they are in a different stage of the approval. And two of the projects we have already received in terms of reference.

One of the projects we have already completed [ EIA, ENP ] and public hearing is also completed. And then for us to land approval is in process. And we are expecting that in the current financial year. At least one project, we will be starting the construction for which we will be doing the -- taking the necessary approval and entering into a final PPA and thereby the financial closure.

And next year, we are expecting two projects should go in to the -- that position by end of next financial year. So this is how it is there. So each project is at a different stage, but one project will achieve all approvals and PPAs as well as other things to start the construction. And that will be a project which we will be building for our Group Captive and which is within our steel plant, where majority of the land and other things are also in place, and we are all [ EIA, ENP ] has been completed.

So second budget will be there. We have already secured like LOI from government of Karnataka. And the third project is under the bidding stage and various approvals.

[Mohit Kumar, analyst]

My last question is given that a lot of new projects where -- a lot of new tenders from [indiscernible] are coming RTC, hybrid. We haven't seen participating in the solar bids, do you think that our participation increase materially under the higher-paid RTC given that we have a portfolio of projects we have, which should be idly more competitive?

[Prashant Jain, executive]

So we are looking at all bids and also the cost of doing the project. And we are in the process of building a future pipeline beyond December 2025, because all the existing projects, which are under commissioning will be over by December 2025. So we are now in the process of building the pipeline. We are evaluating the group captive requirement, which we have come across because of the decarbonization strategy for the JSW Group. And we have received certain inbound queries from our JSW Group to evaluate and work on that as well sticky bids.

And then within that metric, we will be closing that pipeline in next 1 or 2 quarters which will be filling up for FY '25, '26, '27 project execution.

[Operator]

[Operator Instructions] We have a next question from the line of Karan Gupta from CAVI Capital.

[Karan Gupta, analyst]

I just wanted to check. So given the current seasonal gains. What does that imply for availability of water for your Hydro projects for the coming quarter?

[Prashant Jain, executive]

So, they are running at 110%, all projects.

[Karan Gupta, analyst]

Great. And then on merchant power tariffs and the current coal prices, which have crashed significantly. What are your thoughts for the next year?

[Prashant Jain, executive]

So we are making a good spread because the coal prices have also come down substantially. So but the only thing is that post the monsoon period as the demand revised. It will be quite healthy. And in regards to during even in the monsoon period, the current tariffs are very good.

[Karan Gupta, analyst]

Is there any sort of conversion of, say, coal prices to the margins that you generate on merchant power. Like is there something that you can share along those lines?

[Prashant Jain, executive]

No, I think what I'm trying to say is that there is a positive spread based on the current imported coal prices as well as the prevailing merchant power prices. So size wise, I think we are not concerned, we are more concerned about the demand for sale in order to push more volumes. As the demand improves, there will be a good money to be made into the merchant market.

[Karan Gupta, analyst]

Fair enough. And then lastly, there was -- recently there was an announcement at the UP government that is setting up a new coal power plant, I think it was about 1.6 gigawatts. The pricing on that is a little surprising. It was a little more than INR 11 crores a megawatt. So just wanted to get your thoughts on that.

[Prashant Jain, executive]

[indiscernible] for me to comment on anybody's plan. But I think if it takes anything between INR 4.5 crores to INR 4.8 crores or INR 5 crores, per megawatt now, including the cost of [indiscernible] considering the cost of inflation. And the power prices used on new projects are also going to be close to north of INR 4.5. And if you see the recent tender, which has been done and concluded for the medium term, the power tariffs that have been discovered are in the range of INR 5 to INR 5.50 at first.

[Operator]

[Operator Instructions] We have a next question from the line of Anuj Upadhyay from Investec.

[Anuj Upadhyay, analyst]

Can you elaborate something on the Green Hydrogen project and also on the model manufacturing thing. I guess we have shifted the base from [ Orissa ] to some other sales. Could you throw some light on that front, sir?

[Prashant Jain, executive]

So we will be building this project in the state of Rajasthan. We have already identified the land and the proposal with the government of Rajasthan for necessary incentives and other things are in final stage of approval. And also the plant and machinery negotiations are going on. So project is on track to be commissioned by March 2025. And as regards to the hydrogen project, the preliminary work has already been started. Detailed engineering is going on. And the ordering of the electrolytes and commercial negotiations are -- which is going on. We are on track to commission the project in the quarter ending March '25. So both these projects will be being commissioned by that time.

[Anuj Upadhyay, analyst]

Okay, the offtake for the same hydrogen would be our group company or we are also looking out for some...

[Prashant Jain, executive]

We have already disclosed and declared after the Board approval of between JSW Steel and JSW Energy. This will be used for the making of the green steel. It is on a cost-plus basis on a 15% ROE for the project for a 7-year contract. And the total project cost has been amortized over the period of 7 years. And post that [ we didn't make any disclosed. ]

[Anuj Upadhyay, analyst]

Okay, sir. And lastly, on the battery project, which we have. I believe 40% of that capacity is still open. So any guidance on that front, whether we are looking for some other long-term management for debt or guidance in the short-term market?

[Prashant Jain, executive]

No, we are perfectly keeping that in a short-term market at this point of time because we see quite a bit arbitrate. I don't know whether you are seeing the trend in the market now but fluctuation between the off time and a peak time, power prices is anywhere between INR 4. And there is another ancillary market for protocol management also wherein there are certain incentives for the battery projects.

So we believe that for some more time, there will be a huge opportunity for money to be made in this particular segment. However, we are also mindful about if there are any great opportunity, we can lock in that capacity. But we feel that it will be quite [indiscernible] at this point of time. It is a similar situation like for Ind-Barath, I have so many inbound calls for doing a long-term PPA from Ind-Barath that don't want to do the PPA at this point of time. We want to keep the capacity open with the merchant.

[Anuj Upadhyay, analyst]

And if you would please allow me to chip in with another question. It's related to the new capacity. So like we already have a lot of -- I mean secondary 9 and 10, which is to be scheduled, but considering the fact that the government has mandated around 50 gigs of renewable capacity to be sold in from the current fiscal year, are we aggressively looking into this kind of project? Or for the time being, we are focused largely on the hydro, the [indiscernible]?

[Prashant Jain, executive]

So I believe you are aware about our strategy 2.2, wherein we have very categorically talked about that how we are seeing the capital expenditure every year. And also, we are talking about the capacity addition. In my comments to a previous call, I have explained that post December 24, we are now building the book in between the group capital as well as various other opportunities. There are -- there is a certain amount only we can do as a capital expenditure every year due to inability of the capital as well as the execution, which is possible because of the connectivity as well as resources which are available with us.

So we are trying to balance out considering the maximization of our returns. So we are carefully selecting the options and opportunity, so that we make best possible ROEs and equity ads. So this is what we are doing in the next 1 or 2 quarters, you will see we are building a book, which is beyond December '24. And you will get a visibility of another 4 to 6 gigawatts to be built over a period of next 3 years beyond December '24 and March '25. So we will get the visibility up to '27, '28.

[Operator]

[Operator Instructions] We have a next question from the line of [indiscernible] from Barclays.

[Unknown Analyst]

So I know you've answered a question on hydro projects, but specifically, there was a media report that Karcham Wangtoo and Baspa too, have been closed due to the floods in the [indiscernible]. So can you give us some light on the two projects?

[Prashant Jain, executive]

So there was no flood. Basically, you need to understand every year, during this time when the rain happened or cloud burst happen, because these -- this particular basin is having -- is coming from a sticky valley. And if you have been to that side, then it is purely about the sand mountain, so because of which the sand level or our field level goes up into the water.

And as a precaution, there is a great growth, the moment the sand level goes beyond 5,000 to 6,000 [indiscernible], all the plants open their gate and then they go in auto flush mode, so that there is no impact on the turbine. It happens irrespective of the heavy rains, it always happened during this time. So the [indiscernible] were down for 72 hours approximately. And then the moment the sand level went down to permissible limit, they all started running, and all of them are running in a full load at 110% load. And as I said, that both, assets as well as the people, everybody is safe. And there is no disruption of whatsoever, whether temporary or permanent.

In case of Kutehr, because of the landslide, there is a little bit of disconnectivity and -- which is being restored. Some of the connectivity has been restored, balance will be restore in the next 4 to 5 days when it will become [indiscernible].

[Pritesh Vinay, executive]

So shares to be specific, if I may add, as Prashant mentioned, the Baspa units went on full load as of 3:30 p.m. yesterday, and Karcham Wangtoo, all the 4 units went into full load at 5:00 p.m. yesterday. So prior to that, for 72 hours, purely from a grid code and safety, et cetera, point of view due to high slide levels, they were shut down.

[Operator]

We have a next question from the line of Manas Arora from Dinero Capital.

[Manas Arora, analyst]

So I had a question about wind energy. Sir, I wanted to know, are we planning any further CapEx into wind energy apart from our under construction projects?

[Prashant Jain, executive]

Yes. As I said that we are -- we have planned to do close to 1.5 to 2.2 gigawatt of the project every year. And beyond December '24, we have to build the book. We are absolutely in a comfortable position to build that book. As I said that there is a Group Captive requirement of close to 5 to 6 gigawatt to be built over a period of next 3, 4 years' timeframe as well as there are other opportunities which we are having in terms of the hybrid and other [indiscernible] builds.

So we are carefully evaluating and seeing the equity IR where we can maximize our return and in the next 2 quarters, we will build a book beyond '25. And you will see that thing happening, and there will be a complete visibility of that book, which will be executed. You know that we have been always talking about that we don't build the book as well in advance which cannot be executed over a period of next 24 to 30 months timeframe. We build the book only when we can execute immediately. So this is how we have been, because most of the time, if you are building the book ahead of the schedule, and then you are forced to compromise on a lower returns. And that's what we are -- have not been doing and we have been very picky and choosy about it. So there will be a big book you will be seeing to be build in the next 1 or 2 quarters.

[Manas Arora, analyst]

My next question is, sir, are we going to participate in [indiscernible] 2.5-gigawatt tenders, the wind ones?

[Prashant Jain, executive]

So we are mindful of the tariffs. We have seen the encouraging tariffs in the recent time. And we are seeing that the module prices are also going down. And then there is a -- it's quite encouraging. So we will balance out, because we want mid-teen to high-teen kind of a return, and that's what we always look for.

[Operator]

We'll take the last question from the line of [ Chirag Kachhadiya, ] an individual investor.

[Unknown Attendee]

Due to the disturbances in North-East side, what impact in the generation we are expecting?

[Prashant Jain, executive]

[indiscernible] impact now, whatever was supposed to happen has happened. And now the demand is also picking up. And as compared to that year, the July demand is as of now for the month of [indiscernible] is close to 5.5% up.

[Unknown Attendee]

Okay. And sir, I want to understand about the battery data storage business in which we forward recently. So can you share some basic understanding like what it meant to be later on for our company? And what is the potential of that business?

[Prashant Jain, executive]

Storage is a big opportunity for -- to be built upon. I expect the year by 2030 in order to manage the grid wherein 500 gigawatts will offer enable capacity will be there. We need 320 gigawatt hour of the total storage capacity which will be met by both, BFS as well as PSP on the storage projects. And -- which talks about its 320 gigawatt hour for 6-hour storage, it means you are talking about close to 500 -- sorry, [ 5,000 ] because of capacity. And so we see this is a great opportunity for JSW Energy, and we have venture both in BFS as well as PSP segments. And both segments, we have got the first standard with us. And so it's quite encouraging, and we have got a large resource pool. And we will be growing our company in this particular segment going forward.

[Unknown Attendee]

And sir, what CapEx we incurred for this venture?

[Prashant Jain, executive]

Depending upon the capacity. Typically, if you are building a [ comp ] storage project, anything between INR 3.85 crores per megawatt to INR 7 crores per megawatt depending upon the configuration of the project, size of the project, location and the storage capacity.

So this is how these projects are built and typically 5.5 hours to 8 hours of the storage capacity and 75% to 85% of the efficiency.

In terms of the battery projects, it depends on the battery prices. And anything between $300 to $400 per kilowatt hour of the system cost at this point of time, which will be certainly going down to $150 to $300 going forward over a period of time as our battery prices goes down.

[Operator]

I now hand the conference over to Mr. Sudhanshu Bansal from JM Financial for closing comments.

[Sudhanshu Bansal]

Thank you so much to the management of JSW Energy for giving us, the JM Financial, the opportunity to host the call. I thank all the participants for attending this conference call. Sir, if you would like to have -- give any closing remarks?

[Pritesh Vinay, executive]

Thank you, Sudhanshu and thank you, everyone. In case there are any follow-up questions, please feel free to connect with our Investor Relations team, and they'll be happy to clarify everything. Thank you again.

[Sudhanshu Bansal]

Okay. Thank you very much and happy weekend to all of you. Thank you. We can close the call.

[Operator]

Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.