JSW Energy Ltd

NSE:JSWENERGY

Earnings Call Analysis

JSW Energy Reports Strong Q1 FY25 Performance

JSW Energy saw an 80% increase in profit after tax to INR 522 crores, driven by a 21% rise in EBITDA. The company's net debt-to-EBITDA ratio stands at a healthy 2.2, below their target range. Significant projects include the construction of Asia's largest battery storage system and India's largest green hydrogen project, both expected to complete by mid-2025. JSW Energy is on track to achieve 10 GW capacity by the end of FY25 and aims for 20 GW well before 2030. The company continues to capitalize on the evolving energy landscape, maintaining a robust pipeline of renewable projects.

Strong Financial Performance

JSW Energy achieved an 80% year-on-year increase in profit after tax, reaching INR 522 crores. This growth was driven by a 21% increase in EBITDA to INR 1,580 crores. The company's balance sheet remains robust, with a net debt-to-EBITDA ratio of 2.2, well below the guided range of 3.5 to 4 times. The cash balance at the end of the quarter stood at over INR 6,100 crores, bolstered by a significant capital raise of INR 5,000 crores in April【4:0†source】.

Expansion and Project Updates

The company is making significant progress on various projects. They have added 291 megawatts of wind capacity in the quarter, which is a substantial part of the new wind capacity added in the country. Their total under-construction wind capacity is 1.7 gigawatts. The SECI wind projects are on schedule for completion within the fiscal year, and Unit 2 of the Utkal project is expected to synchronize within the current quarter【4:2†source】【4:4†source】.

Focus on Renewable Energy

JSW Energy's renewable energy generation surged by 44%, with hydro generation increasing by 61% year-on-year, marking the highest generation for the first quarter in the last five years. The company has built a pipeline of projects with a total capacity of 5.7 gigawatts, with 2 gigawatts of PPAs already signed and another 1.3 gigawatts in the final stages of approval【4:2†source】【4:4†source】.

Major Investments in Green Technology

The company is constructing Asia's largest battery energy storage system with a 1 gigawatt-hour capacity, scheduled to be commissioned by June 2025. Additionally, they are building a green hydrogen plant with a capacity of 3,800 tonnes per annum of green hydrogen and 30,000 tonnes per annum of green oxygen, set to be commissioned by March 2025. These projects represent significant steps towards sustainability and innovation in energy technology【4:0†source】【4:2†source】.

Market and Competitive Landscape

India's power demand grew by 7.5% in fiscal 2024, with a robust 11% increase in the first quarter of fiscal 2025. The total installed power capacity in India reached 446 gigawatts, with substantial contributions from renewable energy. Market conditions, including a decline in coal prices and strong merchant tariffs, provided a favorable environment for JSW Energy's operations【4:0†source】【4:4†source】.

Future Outlook and Strategic Goals

JSW Energy aims to achieve a capacity of 10 gigawatts by the end of the current financial year and 20 gigawatts well before 2030. The company is confident in its ability to secure its benchmark returns, even as battery prices moderate. With a strong foundation and a focus on renewable energy, JSW Energy is well-positioned to capitalize on future opportunities in the evolving energy landscape【4:4†source】【4:12†source】【4:14†source】.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to the JSW Energy Q1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Abhishek Nigam from Motilal Oswal. Thank you, and over to you, sir.

[Abhishek Nigam, analyst]

Thank you, Sagar. Good evening, everybody. On behalf of Motilal Oswal Financial Services, I welcome you all to the conference call of JSW Energy to discuss the first quarter FY '25 results.

We have with us the leadership team from the company, including Mr. Sharad Mahendra, Joint MD and CEO; Mr. Pritesh Vinay, Director Finance and CFO; and Mr. Bikash Chowdhury, Head of Investor Relations and Treasury.

And now without any further delay, I will hand over the call to Mr. Mahendra for opening remarks. Over to you, sir.

[Sharad Mahendra, executive]

Thank you. Good evening, everyone. Thank you for joining today's call. The first quarter has been exceptional for the power sector and especially for JSW Energy. The sector dynamics are evolving fast, presenting both new opportunities and challenges. As we know that with our nation's rapid growth, the GDP is estimated to have increased by 8.2% in FY '24, driven by robust manufacturing and industrial activities. Notably, India's manufacturing sector grew by 9.9% in FY '24, highlighting the critical role of the power sector in supporting increased economic activities.

Before we dive into our quarterly performance, I would like to provide an overview of the current power demand landscape. The power demand for the country grew at an impressive rate of 7.5% in fiscal '24 on the back of resilient economic activities in the country. In this quarter, we have seen acceleration in the power demand growth with a year-on-year increase of a strong 11% even on a higher base of last year. The quarter also witnessed the record peak demand of 250 gigawatt from 30th of May this year. In line with the power demand growth, the country's generation increased 11% year-on-year.

All India thermal PLF also have improved to 76.4% in the quarter as compared to 70% in the corresponding quarter last year. As the demand growth continues, I believe the impetus is more on capacity additions, delivering sustainable and reliable power.

Talking about the power capacity in the country, the total installed capacity has reached 446 gigawatts. In this quarter, the net capacity addition stands at 4.2 gigawatt post retiral of 200 megawatts of thermal capacity. This is compared to 5.8 gigawatts of net capacity addition in quarter 1 of FY '24. Renewable energy capacity addition in the quarter has been 4.4 gigawatts. Solar dominated this capacity addition of 3.7 gigawatts, while wind capacity addition was close to 800 megawatts during the quarter.

It is expected that India will add 30 to 35 gigawatts of RE capacity in the current year and is targeting approximately 15 gigawatts of thermal capacity additions in the current year. With the nation aiming for annual RE bids of 50 gigawatt, bidding activity has surged significantly as observed in the last fiscal. Notably, the total installed capacity addition in FY '24 reached 26 gigawatt of which 18.5 gigawatt was RE capacity as compared to the target 50 gigawatt per annum. This indicates a substantial increase in growth opportunities. The Government of India has set a trajectory to increase renewable energy consumption via RPO obligation from current level of 22%, this is set to increase to 30% in FY '25 and 43% by 2030.

The current share of RE in the grid is 13% of the total power generation in energy terms. Taking both into account, there is an increasing need of RE generation to be complemented with storage. This is getting reflected as now we are seeing incremental bids for hybrid power and also the FDRE solutions. Unlike plain vanilla RE regeneration, FDRE and hybrid projects offer a comprehensive solution tailored to the needs of discounts on stakes. Therefore, we are witnessing 2 things in the biddings: one, the quantum of option has increased and is higher than 50 gigawatt per annum; and two, the urgent requirement of these box solutions. This adjustable energy, we see as a huge opportunity for us.

Now coming to the emerging markets, we have seen a strong demand growth. This is owing to hot weather conditions, which led to unprecedented increase in the country's energy consumption. Despite the surge in merchant volumes by approximately 17% year-on-year, the average merchant tariffs experienced a slight increase year-on-year, which indicates a strong demand environment. The day ahead market prices in quarter 1 of current fiscal stands at INR 5.27 as compared to INR 5.17 in last year quarter 1.

The coal prices witnessed year-on-year fall while strengthening on a sequential basis, if we talk of a particular index like API 4, it has stood at $108 in quarter 1 of FY '25 as compared to $116 last fiscal, a decline of 7%. As we speak, API 4 coal prices currently are rolling at around $805 per tonne.

Now coming to JSW Energy's performance in the quarter gone by. We'd like to inform that we have added 291 megawatts of capacity in the quarter, which is entirely wind. Of this, 45 megawatts was through completion of an acquisition and balance 246 megawatts was new greenfield capacity, which is almost 1/3 of the new wind capacity added by country in the -- in quarter 1 of current year.

When coming to our net generation, the generation during the quarter increased by 18% year-on-year to 7.9 billion units, driven by a 44% increase in the renewable energy generation and a strong thermal performance. Notably, our hydro generation surged by 61% year-on-year, which is the highest generation for the quarter 1 in last 5 years. This is primarily due to improved hydrology.

For the country, the hydro generation was largely flat in quarter 1 of FY '25. However, the hydro plants in the Sutlej river basin, where our Karcham Wangtoo and Baspa plants are located, have registered an average of 38% year-on-year increase in the generation. The wind generation grew by 40% year-on-year due to capacity additions and around 4% points improvement in machine availability during this quarter.

Coming to thermal, the net generation increased by 4% year-on-year driven by higher generation at our Ratnagiri plant and also the contribution from our Utkal Unit 1 operations which performed well but were impacted by some leasing issues during the quarter, which is a normal thing during the initial commissioning of the unit. But the unit has now stabilized from July onwards. For Unit 2 of Utkal, I am pleased to share that we have completed the steam blowing and the boiler light up activity. We expect synchronization of Unit 2 during the current quarter.

To tell you more on our under construction projects, we are making good progress on our SECI wind projects set for completion in the current fiscal. Total under construction wind capacity is 1.7 gigawatt. For the group captive projects, we have installed 103 megawatts in quarter 1 out of the total 737 megawatts work, which is under progress.

At our Kutehr project site, there was a severe landslide, as we all are aware, in April '24, washing away the total exit roads, which impacted project activity. Work has now resumed after restoration of road infrastructure and we have completed boxing of Unit 1 out of the 3 units, and all 3 units are expected to be commissioned in the current year only.

You can see the details of the under construction projects on Slide 11. In the past 6 months, we have built a robust pipeline of projects with a cumulative capacity of 5.7 gigawatt. With this, our total locked in capacity is 15.5 gigawatt. I am pleased to announce that we have already signed PPAs for 2 gigawatts of these projects.

Additionally, we have received necessary board approvals and are very close to signing PPAs of 1.3 gigawatt of RE projects, including storage for our JSW Group companies for captive use. This is part of 6.2 gigawatts of MOU, which we have signed with our group JSW Group last year towards the capacity additions in the next few years.

With this total pipeline capacity, which PPA will become 3.3 gigawatt. The projects where we have signed PPAs are expected to be commissioned within the next 18 to 24 months. You can see the details of the pipeline projects on Slide 12. As part of our company's energy products and service offerings, we are constructing Asia's largest battery energy storage system with 1 gigawatt hour capacity, which is tied up with SECI. PPA for 250 megawatt is signed and the other part should be -- get signed very soon. As we have communicated earlier, this project is scheduled for commissioning before June '25.

Additionally, we are building a green hydrogen plant for producing green hydrogen for greenfield making by our group company. Like we said earlier, it's a pilot project for us with a capacity of 3,800 tonnes per annum of green hydrogen and 30,000 tonnes per annum of green oxygen. This is the largest green hydrogen project in India, which is under construction. Construction of this project has commenced at our Vijayanagar site in Karnataka, and we will be commissioning this plant before March '25.

Moving to the financial performance of the company. During the quarter, we reported 80% year-on-year increase in profit after tax at INR 522 crores. This was on the back of a strong EBITDA growth of 21% year-on-year. We continue to maintain a healthy balance sheet and receivables. Our net debt-to-EBITDA, excluding CWIP debt stands at 2.2. It remains well below our guided range of sustainable normalized net debt to EBITDA of 3.5 to 4x. We are making significant progress towards our target of achieving a 10 gigawatt capacity by the end of current financial year and well on track to achieve 20 gigawatt capacity well before 2030.

With our strong foundation and fundamentals, I am confident that JSW Energy is well positioned to excel in the coming quarters and take advantage of the immense opportunities which has now come up with a changed landscape.

Thank you. And now I will hand over to Mr. Pritesh Vinay, who will provide more details on our financial performance.

[Pritesh Vinay, executive]

Thank you, Sharad. A very good evening to all of you, and thank you for joining us on the first quarter results earnings call. Sharad has already covered most of the things, but maybe I'll just take a few minutes. If you look at EBITDA, the EBITDA for the quarter stood at about INR 1,580 crores. This was up 21% Y-o-Y. If you look at Slide 8 of the presentation that gives the EBITDA bridge, but essentially, the thermal side, we gained INR 90 crores additional EBITDA Y-o-Y. This was largely due to the incremental contribution from Unit 1 of Ind-Barath.

And on the renewables side, the EBITDA grew by over INR 110 crores Y-o-Y. With the addition of new organic RE capacities as well as the incremental EBITDA generation from hydro due to better hydrology, the other income was also up Y-o-Y due to treasury gains and some LPS payments that we received during the quarter.

Balance sheet, Sharad has already touched about, continues to be very healthy. If you look at Slide #10 of the presentation, which gives a net debt bridge. So sequentially, quarter-on-quarter, if you see the net debt has come down by about INR 3,300 crores. And a large part of it, this has to do with the additional liquidity with the INR 5,000 crore QIP capital raise that we did in the month of April. So we ended the quarter with a cash balance of over INR 6,100 crores. The ratios continue to be healthy. If you look at Slide #13, the headline leverage ratio on a net debt to TTM EBITDA is about 3.8x. But if you look at the sustainable normalized net debt to EBITDA by stripping off the debt, which is sitting on capital work-in-progress. The underlying net debt to EBITDA stands at 2.2x, which is pretty healthy.

The weighted average cost of debt moved up marginally quarter-on-quarter, and at the end of June stood at 8.75%. Receivable trends continue to be very healthy. And at the end of June in terms of days sales outstanding, the overall receivables stood at a very healthy 65 days. And we've seen continuous improvement across each of our businesses across locations.

Now with that, maybe I'll just stop here and we can open the floor for questions. Thank you.

[Operator]

[Operator Instructions] Our first question is from the line of Sumit Kishore from Axis Capital.

[Sumit Kishore, analyst]

My compliments on strong bottom line performance as well as to build up in the pipeline. The first question is for the pipeline projects of 5.65 interval are the ones where PPA has not been -- I mean what is the general expectation by when do you expect to close PPA signing for these projects? And realistically, in FY '27, what portion of this capacity would get commissioned? That's my first question.

[Sharad Mahendra, executive]

Okay. See, when like against the bids which we have won, as I told and that we have signed PPAs for 2 gigawatt and the rest all like the agencies who have conducted the bids are in touch with the buyers, different discomms, different states, which normally takes a due course of time. And we expect very soon -- this activity has already gathered pace. And very soon, we expect that these PPAs will get certified and will be signed. Giving the exact time line may be a challenge, but we expect, as we say normal, it takes anything between 30 to 60 days, 70 days, if the time lines normally which has been seen, and we expect that very soon these PPAs further will be signed.

And by '27, as you say, that as I have said that whatever PPAs are signed, the completion from the PPA signing date is normally 18 to 24 months depending on when we sign the PPA based on that, those time lines, definitely will be met and the projects will be executed accordingly. This is over and above that. Whatever the captive requirements are there, keeping in mind whether it's solar, whether it is wind within the same time lines of 18 to 24 months, those capacities also will be added.

[Sumit Kishore, analyst]

And this would also include signing PPA with JSW Steel for the group captive capacity?

[Sharad Mahendra, executive]

Yes, exactly. That will be -- this will be over and above 2, which is 1.3 gigawatts, which we expect to be signed very soon.

[Sumit Kishore, analyst]

My second question is that at the evolving -- with the battery prices evolving rapidly and we have seen stand-alone [ ESS discovery ]. So how do you foresee the loan following FDRE rates settling down in coming quarters? We have seen the FDRE rate that JSW had done a portion. Yesterday, we saw -- or day before yesterday, we saw that solar plus recycle back in storage. Could you please give a comment on the direction...

[Sharad Mahendra, executive]

See, exact number, that is -- definitely depends on what kind of requirement. As you said day before yesterday, was a different solution, which was there, which is a mix of solar plus and store -- energy storage, battery storage and taking care of [ when we want to start ] during the evening peak, so it depends on how the project is designed, what is the requirement and how much of energy is to be met it depends so giving the exact tariff for anything. Like someone wants a 80% power, 80% in terms of energy terms will have a different product design.

But yes, as you have been seeing, it ranges from like day before yesterday with a single discharge in solar at about maybe 3.42 to whatever the tariff which has been discovered is a reasonable tariff. And just I would like to reiterate here for us, the tariff is our benchmark returns, whenever, wherever we are getting and we are meeting our benchmark returns. That is where only the tariffs we accept and go for the -- winning the bid, not just for the sake of winning the bid.

So we are very, very sure about what is our benchmark returns that we are getting or not. So tariffs, whatever being discovered and depending on what kind of product mix which is required in terms of the storage and solar or whether it is FDRE, which is solar wind and storage. So it depends on the product design rather than giving a one straight number, which is possible in the plain vanilla solar or plain vanilla wind, here, it depends on what is the product which is required.

[Sumit Kishore, analyst]

Just one follow-up on this. Is there -- let us say that FDRE 2 rate of [ 5 9 ] or thereabouts, which was discovered in March, is the same going to happen today? Have battery prices come down from there also? Or has the equipment price corrected so that you discover a price which will save some INR 5 for the same tender 3, 4 months down the line?

[Sharad Mahendra, executive]

Yes. Very good question. I think with the -- what we are seeing the moderation in the battery prices coming down, the cell prices. I think the safe solution, we feel that can be provided in the range of maybe anything between INR 4.6 to INR 4.7, INR 4.8 also.

[Pritesh Vinay, executive]

So if I can also comment here, the challenge is kind of crystal balling something like this and a very important element that we have so far not touched upon is that a relative competitive intensity and what underlying returns is anybody trying to solve for. So what is the effective project cost based on the negotiation capability that any individual developer can have? And what are the returns -- how do rates of returns that one is solving for?

So when you do an overlay of this, then it becomes difficult to kind of extrapolate where do you think something like this can normalize because at different points of time in the market for strategic reasons, different people could be driven by various motivations, right? So there could be somebody who's trying to have a tick in the box for multiple strategies for some other reasons. There could be somebody who's building a pipeline for a potential capital raise. So it becomes challenging in that way to extrapolate, right?

[Sumit Kishore, analyst]

Yes. Just last question. Presentation mentioned that in Western India now we will have your 1 gigawatt, the ESS project as well as the green hydrogen project operational. Could you give some color on where you have ordered the battery, the electrolyzers, if something can be shared for better understanding and the project cost.

[Sharad Mahendra, executive]

See, as I told you, Sumit, that when we say that when we design this and whatever it is that our project cost and other things are secondary for us. It is -- we have to ensure that I'm getting my desired returns, which is a mid-teens. In this case, yes, with the moderation in the prices of the equipment, we are quite confident that it will be maybe high-teen returns, which we are going to get on these projects. So rather than what is the project cost it is important that what the returns I'm getting and I'm absolutely confident that we will be getting the returns higher than what we expected when we planned these projects.

[Operator]

[Operator Instructions] The next question is from the line of Mohit Kumar from ICICI Securities.

[Mohit Kumar, analyst]

Congratulations on a good set of numbers. My first question is just clarification. Are you running the Ratnagiri Unit 1 on a case on basis. Is that right?

[Sharad Mahendra, executive]

Yes, yes. That's right, Mohit.

[Mohit Kumar, analyst]

Second question is we understand the number of PPAs as reported by a few state discomm for the coal and power plants. Do you think that we're going to start -- commence some work on a new power plant or you can tie up the Ind-Barath, [indiscernible] Ind-Barath around the PPA?

[Sharad Mahendra, executive]

See, Mohit, definitely, now states have again started looking for the PPAs. For Ind-Barath, today, the advantage with us being close to almost a [ pig-based ] plant and the sufficient coal availability, which is there. And our -- overall, our fuel cost is very, very competitive and low we see that right now, the opportunity in merchant market is significant, which may not be -- maybe I will say, very -- for a long term, but we see next 1 or 2 years, 3 years till the time sufficient thermal capacities get added and the way we have -- I have said in my opening remarks, of the way the demand growth, which is there much more than what everyone has been anticipating, we see this as a good opportunity for us in near term.

So right now, we will be continuing in the merchant market. But yes, the landscape and what the Government of India also has announced to meet the growing demand the new capacity additions in thermal, which is in excess of 80 gigawatts, which is required by 2032. As and when the opportunity comes and the state comes, we will be definitely looking towards this opportunity going forward also for adding further capacities in thermal space.

[Mohit Kumar, analyst]

Anything in near term or medium term, do you think the next 1 year, you can start a new power plant or commencement of new construction?

[Sharad Mahendra, executive]

No, that will not be -- it takes its own due course of time in setting up a new thermal power plant, that time definitely will be there, but that we will be going for any significant investment based on if we have the PPAs in hand.

[Mohit Kumar, analyst]

Understood. My last question, sir, what is the portfolio of [ Ari ]. Where we are L1 and where the PPA and all the [ LOA ] has not being issued?

[Pritesh Vinay, executive]

So Mohit, if you can check Slide #12 of the presentation that should help you.

[Operator]

The next question is from the line of Anuj Upadhyay from Investec Capital.

[Anuj Upadhyay, analyst]

Congrats on a good set of numbers.

[Operator]

Sir, your line is sounding a bit muffled. May we request you to use the handset mode in case.

[Anuj Upadhyay, analyst]

Sure. Is it better now?

[Operator]

Much better, sir. Please go ahead.

[Anuj Upadhyay, analyst]

So my question belongs to the underperformance across the Vijayanagar station and also the low PLF across the Barmer, which still hangs around in the range of 66%, 67% out year. Can you throw some light on reasoning behind the same?

[Sharad Mahendra, executive]

So Anuj, we also earlier tried to explain that if you look at Vijayanagar for the station out of 860 megawatt, we have only about 310-odd megawatt, which is tied under PPAs, right? So the balance is open for sale in the merchant markets, and that is an opportunistic trading that has to be done depending on where the dark spreads are, right?

And with another plant because it is [ a lend ], the fuel cost as compared to Ratnagiri is going to be higher because of the Indian transportation costs. So from time to time, based on unit economics, the team will go ahead and book for trades in the short-term market. And hence, you're always going to see variability in the PLF for the variability of the Vijayanagar station, right?

As far as the Barmer plant is concerned, in the first quarter, we had some planned outages, how some of the units, all of which have got completed. So if you look at the PEA data for the current one, for example, is running at a very high PLF. So the PLF for the first quarter is lower due to planned outages.

[Anuj Upadhyay, analyst]

Okay. So there's a planned outages. So would there be any under recovery for Q1, which was booked for Barmer?

[Sharad Mahendra, executive]

So the recovery or under recovery is actually is estimated on an annual basis. So yes, for the quarter, there's going to be another recovery, but if we meet up the deemed PLF numbers during the course of the year, there will be makeup for that towards the back end of the year, that's how...

[Anuj Upadhyay, analyst]

Fair enough. And lastly, on the Vijayanagar again, does -- I mean like initially, we had thought that project may operate under Section 11. So -- but again, as you mentioned about it depends upon the unit economics and the opportunity. So Section 11 kind of a thing.

[Sharad Mahendra, executive]

You're right. Section 11 was there till only, I think, end of June -- sorry, end of May, 30th May. So April and May there was Section 11. But I think it's not on Section 11 anymore.

[Operator]

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

[Ketan Jain, analyst]

Sir, my first question is a follow-up on the Section 11 thing. So do you expect Section 11 to be extended -- to get extended by the government?

[Sharad Mahendra, executive]

No. So the thing is that it is first and foremost very difficult to forecast or estimate government actions going forward because putting ourselves in the government shoes, I believe the underlying drivers for that decision are going to be the perceived demand supply gap, right? So while on the one hand, demand growth has been pretty strong, but we are off the peak season demand of summers and monsoons are in and you had additional sources of supply like hydro, the rainy season is about to kick in.

So I'd be surprised if anybody is estimating a demand-supply mismatch in the next couple of months. But who knows for the second half of the year post monsoon, you will say, October to March period, which is a peak demand period based on the estimated load curve and the supply from various sources at the right time, the government might take that call. But I think there is typically no heads up for these kind of situations.

[Ketan Jain, analyst]

Understood. My next question is what type of realizations and input costs are you seeing Ind-Barath and Vijayanagar plants?

[Sharad Mahendra, executive]

So what will probably help you understand is that we will not be disclosing station by unit cost details, but it's also important to help you think about these things, right? So for example, let's take one by one, let's take Ind-Barath, Ind-Barath reached at -- because we don't have a PPA, so there is no FFA, so the only source of coal is through the auction route, right? Now it is either the spot the auctions or through the shakti auction schemes under the Ministry of Power. And there we, from time to time, participate and we've guided in the past that we have looked at average cost of between say INR 2.75 to INR 3 on an average for Ind-Barath.

On the imported coal-based stations we source everything from the seaborne market. So you'll see how the API 4 indices are moving and then you will be able to make a good estimate for both Ratnagiri -- I also said in a response to an earlier question that Vijayanagar is inland, so there's an additional Indian transportation cost. So there will be a higher spread between Ratnagiri to Vijayanagar.

[Ketan Jain, analyst]

Understood. Just one last question, sir, on the merchant capacity. Sir, is the demand more in the merchant capacity in the non-solar or in solar? Like what type of PLF does say maybe Ind-Barath operate in a non-solar are?

[Sharad Mahendra, executive]

See, Ind-Barath I'd just like to tell that definitely, as we are seeing that the demand during the daytime is definitely very good, but it is due to a large availability of solar during the day time. The thermal power is not there. But in our case, if you see how we have moved is that we have tied up our capacities on an RTC basis with various discoms in short term, maybe 3 months period, or 4 months period. So we are insulated that what is happening during the daytime at Ind-Barath, and we have tied up our power on an RTC basis for a 3-month period. That is how we have moved.

[Operator]

[Operator Instructions] The next question is from the line of [ Vishal Periwal from Antique Limited ].

[Unknown Analyst]

Yes, 2 questions if I may...

[Operator]

Sorry to interrupt.[ Mr. Periwal ], we are not able to hear you. May we request to use the handset mode, please?

[Unknown Analyst]

Yes. Sorry, is this better now?

[Operator]

Much better, sir.

[Unknown Analyst]

Sir, on your project capacity addition, the Slide #12, which do give some brief on it. In terms of FY '26 addition, is it fair to say the 2.6 gigawatt PPA, which is already signed, that will at least see a commissioning?

[Sharad Mahendra, executive]

Yes. As I told you that all solar projects which are there, wherein the time lines are around, say, 18 months, the 18 to 24 months that I think within the time lines, we will be adding that, yes. But yes, as you have said, we are sure that this capacity addition will be there during that time period.

[Unknown Analyst]

Okay. Okay. And then in terms of our addition, I mean, from '25 to '30 I mean like in FY '30, taking from 10 gigawatts to 20 gigawatts, is there any midterm target also for FY '27 or FY '28 for us as of now?

[Sharad Mahendra, executive]

No. See, Vishal, as I told in my statement also, that we are confident that we are definitely about 1.5 years back when we said that 10 gigawatts by FY '25 which was the Phase I and 20 gigawatt by FY '30. But with the changed landscape and the opportunities which have come up and the amount of pipeline which we have in hand now, we are confident that this 20 gigawatt will be achieved earlier -- significantly earlier than FY '30, and we are evaluating that what will be the number. We are -- that is a work in progress with the opportunities.

And as I said that our returns, what we have benchmarked are protected and the opportunities which are going to be there in the bidding space. So FY '30, there will be a definitely different number. But the FY -- this 20 gigawatt will be happening significantly earlier, that I can at least maintain.

[Unknown Analyst]

Sure, sir. Sure, sure. And one last thing from my side. In terms of our CapEx, we did mention in the previous call, INR 15,000-odd crores we'll be doing it in FY '25. Any number that we are targeting for '26 or it's still open?

[Sharad Mahendra, executive]

It's pretty much we are now, Vishal. But because 1 quarter of the new year has finished. And you are aware that there are more and more bids that are lined up for the remaining period. So I think for FY '26, it will be a bit premature, maybe towards the end of this year will be the right time for this guidance falling in.

Can we take the last question, please, operator?

[Operator]

The follow-up question is from the line of Ketan Jain from Avendus Spark.

[Ketan Jain, analyst]

Sir, my last question is, sir, are we taking or are we expected to face any transmission evacuation capacity problem in the under construction wind projects?

[Sharad Mahendra, executive]

No, under construction wind projects or all capacities in terms of transmission are tied up with all projects which are under construction.

[Ketan Jain, analyst]

Understood. And also are you seeing any transmission supply chain tightness in the substations or transformers?

[Sharad Mahendra, executive]

No. See, definitely, everything has been lined up. Of course, with the kind of bidding space, which is now the bidding, the quantum which is increasing. Going forward, definitely, this is going to be one area, but we have already lined up knowing that what is going to be my FY '25, FY '26, FY '27, we are already taking care of the entire supply chain, not only the [indiscernible] but in terms of execution or any other aspects in terms of completing the project well in time.

[Operator]

There are no further questions, I would now like to hand the conference over to the management for closing comments.

[Sharad Mahendra, executive]

Okay. Thank you, everyone, for joining today's call. And as I have told you, I've covered most of the points. But yes, my IR team is there in case there is any other follow-up questions later or any other information required, we request you to kindly write to our IR team, we will definitely be responding on that. Thank you very much, once again.

[Pritesh Vinay, executive]

Thank you very much.

[Operator]

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