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NTPC Ltd
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Ladies and gentlemen, welcome to Q4 FY '18 [ post results ] conference call of NTPC Limited, hosted by Batlivala & Karani Securities India Pvt. Ltd. [Operator Instructions] Please note that this call is recorded. [Operator Instructions] .I would now like to hand the conference over to Mr. Ashwani Sharma. Thank you. And over to you, sir.
Yes. Thank you, Shashti. Hello, everyone. On behalf of B&K Securities, I welcome you all to the fourth quarter earning call of NTPC. Today, to discuss the results and share the performance outlook, we have management of NTPC, which will be represented by Mr. K. Sreekant, Director, Finance; Shri S.K. Roy, Director, Projects; Mr. P.K. Mohapatra, Director, Technical; Mr. Prakash Tiwari, Director, Operations; and Mr. Sudhir Arya, the CFO and ED; and also the entire finance team. Now I would like to hand over to the management for the opening remarks, post which we would have the Q&A session. Over to you, sir, and thank you.
Thank you, Ashwani. A very good evening to everybody. I am K. Sreekant, Director, Finance, NTPC Limited. And I have with me Shri A.K. Gupta, Director, Commercial; Shri S.K. Roy, Director, Projects; Shri Prakash Tiwari, Director of Operation; and Shri P.K. Mohapatra, Director, Technical. I have also with me Shri Sudhir Arya, CFO and Executive Director, Finance; and other key members of the NTPC team.Today, the company has announced the audited annual financial results for FY '18, along with the unaudited financial results for Q4 FY '18. The key performance highlights for the financial year and quarter have already been disclosed on both the stock exchanges.Let me first begin with NTPC's performance highlights for FY '18 and Q4 FY '18. In FY '18, NTPC's standalone gross generation increased by 15.48 billion units to 265.80 billion units, registering an increase of 6.19% over the previous year. This is over 20% of the country's generation, excluding Bhutan imports. Q4 FY '18 recorded a generation of 58.56 billion units, registering a growth of 7.51% over the Q4 [ FY '17 ], represented by 4.79 billion units. NTPC has posted highest single day generation of 819.17 million units on 28 February 2018, surpassing previous highest day generation of 799.85 million units on 23rd March 2017.The gross generation of NTPC Group for FY '18 was 294.27 billion units, an increase of 6.32% over last year's generation of 276.77 billion unit. NTPC Group recorded highest-ever day generation of 910.38 million units on 28th March 2018, surpassing previous highest day generation of 907.31 million units on 28 February, 2018.Total capacity addition during FY '18 was 3,478 megawatt. During Q4 FY '18, we have added 2,268 megawatt, comprising 800 megawatt at Kudgi, 800 megawatt at Lara, 8 megawatt of hydro capacity at Singrauli and 660 megawatt at Meja to NTPC Group commissioned capacity. In terms of the installed capacity of NTPC on standalone basis, it has become 46,100 megawatt. And for the group as a whole, it is 53,651 megawatt as of 31st March 2018. The total commercial capacity added during FY '18 was 3,978 megawatt for the company on a standalone basis and 4,423 megawatt for the group. With this, the commercial capacity of NTPC on standalone has gone up to 44,500 megawatt and to 51,391 megawatt for the group. For FY '18, 6 coal stations of NTPC Group were among the top 10 performing stations in the country in terms of PLF. Talcher thermal recorded a PL of 93.82%; Vindhyachal, 89.92%; Korba, 89.91%, Rihand, 89.54%; Bhilai 88.52% and Sipat 88.14%, were ranked second, sixth, seventh, eighth, ninth and 10th in the merit order. In all, 7 stations of NTPC clocked lower 84% PLF. During FY '18, PLF of coal stations were 77.90% as against the national average of 60.72%.We suffered loss of generation due to grid restrictions, though it has declined in comparison to previous years. For the coal-based generation, the loss was 7.63 billion units in Q4 FY '18 as against 10.38 billion units in Q4 of FY '17. And for FY '18, the loss was 30.83 billion units as against 41.205 billion units in the previous year. Similarly, for the gas-based generation unit, the loss was 6.59 billion units in Q4 FY '18 as against 5.85 billion units in Q4 FY '17. And for FY '18, the loss was 24.45 billion units as against 24.85 billion units in the previous year. The generation loss on account of fuel supply constraints in the coal-based stations was 3.03 billion units in Q4 FY '18 as against 5.17 billion units during the previous quarter.During FY '18, materialization of coal against ACQ was 96.2% as against 94.04% in FY '17. Coal supply during FY '18 was 168.53 MMT, comprising 168.21 MMT of domestic coal and 0.32 MMT of imported coal. During the previous year, the coal supply was 160.38 MMT, with 159.35 MMT from domestic sources and 1.03 MMT of imported coal. Coal consumption during FY '18 was 169.77 MMT, comprising 169.43 MMT of domestic coal and 0.34 MMT of imported coal.The coal consumption in the previous year was 162.50 MMT, with 160.97 MMT of domestic coal and 1.53 MMT of imported coal. The gas consumption during FY '18 was 5.33 MMSCMD as against 5.17 MMSCMD in FY '17. The gas consumption of FY '18 procured under APM plus PMT mechanism was 3.82 MMSCMD under non-APM gas 0.66 MMSCMD, and under spot RLNG was 0.84 MMSCMD. NTPC, with a cumulative capacity of 920 megawatts of renewables in its bucket, generated 1.310 billion units from renewables in FY '18 as compared to 0.53 billion units in FY '17.Now coming to financial highlights. For FY '18, gross sale is INR 81,529.09 crore as against previous year gross sales of INR 77,475.24 crores, an increase of 5.23%. Gross sales for Q4 FY '18 is INR 21,599.02 crore as against corresponding previous year gross sales of INR 20,006.49 crore, registering an increase of 7.96%. For FY '18, there is an increase of 7.39% in the total income, that is from INR 79,342.30 crores in FY '17 to INR 85,207.95 crore. For Q4 FY '18, the total income has increased by 13.08%. That is from INR 20,886.65 crore to INR 23,617.83 crores. For FY '18, there is an increase of 2.38% in the PBT from INR 12,052.16 crore in FY '17 to INR 12,339.46 crore. PBT for the quarter 4 FY '18 is INR 3,388.57 crore as against INR 2,645.89 crore in the corresponding quarter of previous year, registering an increase of 28.07%. For FY '18, PAT is INR 10,343.17 crore as against INR 9,385.26 crore during previous year, an increase of 10.21%. PAT for Q4 FY '18 is INR 2,925.59 crore as against INR 2,079.40 crore in the corresponding quarter of previous year, registering an increase of 40.69%.For FY '18, the board has recommended final dividend at the rate of 23.9% of paid-up capital, that is INR 2.39 per share, subject to the approval of shareholders in the Annual General Meeting scheduled to be held in September '18. As you are aware, interim dividend for FY '18 at the rate 27.30% of paid-up capital, that is INR 2.73 per share has already been paid in February 2018, thus total dividend for the year FY '18 comes to INR 5.12 per share.An update on various other financial activities. Regulated equity as on 31st March '18 was INR 50,920.71 crore. Total assets of the company stood at INR 260,193.56 crore and -- as at 31st March 2018, as compared to INR 2,36,577.49 crore as at 31st March 2017. The gross block has increased by INR 29,324.75 crore to INR 1,40,739.35 crore as at March 31, 2018, mainly on account of capitalization of new unit.Capital work in progress, including advances [indiscernible] INR 82,015 crores as on 31st of March 2018 as compared to INR 86,692 crores as on 31st March 2017. Fund mobilization. In Q4 FY '18, NTPC issued USD 400 million in 5% medium-term notes. This is the ninth offering under the company's USD 6 billion medium-term note program. The notes will mature on 19th March 2028.During Q4 FY '18, NTPC issued commercial paper totaling INR 6,500 crores. Our total commercial paper issued during FY '18 were for INR 8,000 crore. We have also signed 2 term loans of INR 2,000 crore and INR [ 532.5 ] crore with PNB and IDFC totaling to INR 2,150 crore. Average cost of borrowing for FY '18 was 6.99% as compared to 7.45% in FY '17. The decrease is on account of lower rate of interest on new borrowings.CapEx. In FY '18, we incurred a CapEx of INR 24,133.61 crore, the CapEx by other group companies has been INR 6,902.95 crore. But the total group CapEx for the year 2000 -- FY 2018 was INR 31,036.5 crores. The capital outlay for FY '19 has been estimated at INR 22,300 crore for NTPC. Let me discuss some other significant activities of this period. We have signed MoU with government of Bihar and Bihar Power utilities on May 15, 2018, for the acquisition of 720 megawatt Barauni Thermal Power Station; acquisition of 27.36% equity of Kanti Bijlee Utpadan Nigam Limited, which owns 610 megawatt Mouda Power Thermal Power Station; and acquisition of 50% equity of Nabinagar Power Generating Company Private Ltd., which is developing 1,980 megawatt Nabinagar Super Thermal Power Project and Bihar State Power Generation Company.[ All these ] transactions are envisaged to be completed through notification of a Statutory Transfer Scheme by Government of Bihar. Post-transaction, Barauni station will become part of NTPC portfolio and Kanti and Nabinagar will become wholly owned subsidiaries of NTPC Limited.Environmental management. For compliance of new norms and control of SOx, Flue Gas Desulphurization systems are under various stages of implementation in 64 gigawatts of capacity of the company. The first FGD has been implemented at Vindhyachal. Procurement of FGD system for other stations are under process. The 7.23 gigawatts of capacity FGD systems are under implementation, with 31.61 gigawatts of the FGD systems are under bidding and the remaining 24.7 gigawatts of capacity bids are planned [indiscernible].NOx control in coal-fired plants is presently achieved by controlling its production through adopting best combustion practices. NOx reduction technologies are [ modification ] of combustion system, installation of selective non-catalytic reduction, selective catalytic reduction or a combination of these. In order to comply with these new norms, all units shall require installation of appropriate de-NOx system based on the emission level.Nine selective catalytic reduction and 3 selective non-catalytic reduction pilot tests are under execution in order to assess performance on high ash Indian coal and are likely to be completed by October '18. Further, as part of its commitment to the environment, NTPC has taken a new initiative to utilize agro residue for power generation. The utilization of agro residue-based biofuel for power generation will not only reduce infield crop residue burning, resulting in lower air pollution, but will also reduce carbon footprint of coal-based power plants. Up to 10% agro residue-based biofuel coal-firing with coal has been successfully demonstrated at NTPC's Dadri.Commercial performance. NTPC has achieved more than 100% realization in FY '18. This is 15th consecutive financial year of achieving 100% realization. Our total amount realized is INR 83,809 crore. TPA have been signed with 28 states/union territories as on date. The trade receivables have declined from 38 days to 34 days sales.Finally, during FY '18, from Pakri Barwadih coal mine, approximately [ 26,007 ] metric tons of coal has been excavated. Mining operations from Dulanga coal blocks has been started on 28th February and coal extraction commenced on 21st March 2018. Cumulative expenditure of INR 5,063.75 crore has been incurred on the development of coal mines since 31st March 2018. Now I'll briefly touch upon the -- some of the NTPC Group companies. NVVN, our trading subsidiary, transacted 17.28 billion units during FY '18 as against 15.86 billion units during FY '17, registering an increase of 8.93%. Units transacted during FY '18 include 5.75 billion units of solar bundled power, 0.27 billion units traded through bilateral arrangement, 3.91 billion units under cross-border trading, and 3.34 billion units traded through power exchange. NVVN has been selected as lowest bidder for a supply of 300-megawatt power to Bangladesh from 1st June 2018 to 31st May 2033. During FY '18, we have accounted dividend income of INR 189.17 crore, previous year INR 166.09 crore from our subsidiaries and joint venture companies, including INR 69.93 crore from Aravali Power Company Private Limited; INR 50 crore each from NVVN, NTPC-SAIL Power Company; INR 12.92 crore from Energy Efficiencies Services Limited; INR 3.6 crores from PTC India Limited; INR 2.5 crore from Utility Powertech Limited; and INR 0.22 crore from NTPC GE Power Services Private Limited. NTPC continues to win laurels and awards in various fields. Major awards in the field during Q4 FY '18 are: awarded overall best financial performance by Governance Now; bagged second position at the BML Munjal Award 2018 for Sustained Excellence in Learning & Development; awarded for excellence in Maharatna category at India Pride Awards. These were some of the highlights I wanted to share before the question and answer session. Thank you.
[Operator Instructions] We have a question from Mr. Venkatesh B. from Citibank.
My first question was NTPC had reliability-based disincentives in the third quarter of 5.46 billion. Can you actually share if there were any disincentives in the fourth quarter? And if at all, what is the number for the full year? And which plants had coal shortage problem because of which you had disincentives?
Yes. Because of coal shortage, our plants at Mouda, Solapur and Bongaigaon, we are forced to declare less [ coal ] capacity, and we had a less recovery of fixed costs on them.
Yes, sir, can you share the number? What was the under-recovery in the fourth quarter? You had shared in the third quarter the under-recovery was 5.46 billion. Can you share what is the under-recovery in the fourth quarter?[Technical Difficulty]
Ladies and gentlemen, please stay on the line, we are connecting the management again. Thank you. Please welcome back the management from NTPC. Thank you.
Yes. Mr. Venkatesh, you were asking what was the last one on account of fuel can say in the current quarter, 0.03 billion units in Q4 FY '18.
No, sir. I'm not talking in terms of the number of units. I'm like what was -- you had a under-recovery of 546 crores in the third quarter. I'm asking what was the under-recovery in the third quarter because of this in rupee -- in the fourth quarter and in the full year as a whole?
Full year [indiscernible].
Full year under-recovery is about 1,000 crores on account of fuel.
Okay. So the third quarter, you would have done an under-recovery would be around 450 crores. Am I correct, sir?
On account of fuel?
Coal. Coal.
You see, for '17/'18, total loss of fixture due to coal shortage, 1,800 crores. Yes, if you look at 546 crore for previous 3 quarters, this quarter, we have around 254 crores last quarter.
Okay. Okay, sir. Now we believe this -- in the first quarter, there is now problem of coal shortage in Kaniha also. So has this earlier problem of Mouda, Solapur and Bongaigaon got solved in the first quarter? Or is it those 3 plants are still having shortage, and you have one more new problem in Kaniha now?
The problem at Mouda and Solapur has been reduced a great deal with our coal flexible supply policy. And in the Kaniha, the problem has stopped there because there was an IR issue in Kaniha mine there for quite a few weeks.
Sir, would it be reasonable to assume that in the next 6 to 9 months all these problems will be behind us? That in 6 to 9 months, that is time enough to solve problems at all these problems, and we will have full fixed costs recovery? Is it the reasonable time frame?
The problem at Talcher Kaniha is a temporary one. Even today, the extent of problem is much less by our arrangement of coal from other sources. And we are hopeful that in Mouda and Solapur, this year, we will be able to make a full recovery of fixed charges, as we have -- we are closely working with the Coal India and railways. We have made a plan to ensure enough supply to this business. So in this financial year, we are hopeful that this problem will be not there.
Okay. Sir, my second question is on wage provisions. In fourth quarter of last year, I think you had wage provisions of INR 874 crores, out of which INR 522 crores you had passed through in the tariff, and you had created a regulatory asset. And INR 252 crores, you took a hit on the P&L. Can you share similar numbers for FY '18? What is the quantum of wage provisions you have taken? How much have you passed through in the tariff? And how much of a hit have you taken in the P&L? And what is the status of your -- when will this get recouped? I remember you mentioned it at the end of last year that you have reached out to CERC already. And in 6 to 9 months, you will have to know -- we will know how much of this will get passed through and how much you will have to take a hit. So can you throw some light on the wage hike provisions?
Yes, just a minute. The wage provision [indiscernible] INR 1,203.28 crore. And I'll just get you the regulatory numbers separately. As regarding the recovery of this, we will have to approach the CERC after implementing the wage hike, and then file a petition and then the petition will be decided. So it will take some time.
[Operator Instructions] We have a question from Mr. Deepak Agrawala from Elara Capital.
Yes. Sir, can you help us, give us the plan for capacity addition on actual COD front for FY '19, both for the coal-fired as well as the renewable if you plan through any additions?
Yes. Mr. Roy, our director for this, will answer this.
We have capacity addition program for the year, financial year '18/'19. For NTPC Group, it is 4,000 -- nearly 5,000 megawatt.
Sir, can you give us project-wise which are all you're planning from COD perspective?
Yes. Now the capacity addition, that definition has been changed. It is from full load to COD. So that first one is Lara Unit 1, second is a Meja Unit 1, third is Kudgi Unit 3, fourth is Bongaigaon Unit 3, fifth is BRBCL Nabinagar Unit 3, sixth is [ NGPCL ] Unit 1, seventh is Gadarwara Unit 1 and eighth is Solapur Unit 2.
These are all from COD perspective, right?
These are from -- definitely, now whatever I am talking, that is COD perspective, not for mere full -- like a full load achievement, earlier definition of COD. Earlier definition of [indiscernible].
And how much you're planning for the renewables for this year.
It will be -- like already, we're having 870 solar and 50 megawatt wind. We'll be adding around 500 megawatt in our own power station, [indiscernible] have done that. And we'll have 25 megawatt in Andaman. So that will be around -- consider 510 megawatts total. That is in the EPC model by NTPC itself. On developer mode, this -- presently, we're having 750 megawatt Anandpur under tendering. And that maybe knowing that under NSM, that [ 510 ] megawatt, the transit 1, out of 310 megawatt, 2,750 megawatt commission. The transit 2 and transit 3, we are having some problem due to this transmission constraints. Yes.
Okay. So 510 megawatt is what you will do on your own balance sheet in terms of capacity addition?
Yes, yes, yes. That is in the [indiscernible].
And my second question is to part, like in the past, it used to result to a lot of imported coal procurement to meet the coal shortage. Now is that the plan in FY '19 as well? And if yes, to what extent?
Pardon me?
In the past, you resulted to procurement of imported coal to meet the domestic coal shortage, so -- which is kept in FY '18. So is there any plan for FY '19 to procure imported coal?
As on date, we do not have any plan, but there is a discussion we are having at the Ministry of Power level and [indiscernible] also there to see the overall situation of coal in the country, and whether we -- there is need for import of coal. As and when this is decided at the government level, on a case to case basis, maybe first for the coastal projects, this can be considered. But as of now, we have no plans.
Okay. And sir, my last question is, if you can help us, give us an update on the acquisition of the Chhabra plant and [indiscernible], and this joint -- this MoU that you had signed with government of Bihar.
Okay. As far as Chhabra is concerned, we -- the MoU which we have signed with them, it has extended by another 2 years. So this MoU had been expended for another 6 months so that this transaction can be done in next 6 months. Now this is not under hold as of date, discussions are on, because the coal supply approval, we have already got from the Ministry of Coal. So based on that, the things are ready, but I think we will need some more time to really conclude this deal. As far as is [indiscernible] is concerned, we have already approached Ministry of Power with our due diligence report and there is diligence discussion with Ministry of Power. Because, in any case, we are going to only talking about taking over that duty of Ministry of Power, not affecting the [indiscernible]. So this is under discussion. Third thing is as far as the Bihar is concerned, we have had the -- and we will sign with them, we're in Kanti Bijlee Utpadan Nigam, KBUNL and [ NGLPC ] Nabinagar JV with Bihar, these 2 equities, whatever Bihar has, that will be taken all by NTPC, and then these 2 equities will become a wholly owned subsidiary to start with and ultimately must [indiscernible] for this.
How many times this transaction will take, like, in your view?
I think we are targeting to it in the month of June.
Okay. So from July, it will be consolidated it in your books?
Hopefully, yes. Hopefully, yes. We are only trying to really see that. We have -- they have already applied for urban SHAKTI, then that -- necessary approval is required for that. And pending that, this will take -- I think in June month, we should be able to do all of those thing.
[Operator Instructions] We have a question from [ Keyur Asher ] from [ Reliance Nippon Life ].
My, actually, question, one on the borrowing side. So could you help us with the market borrowing target for FY '19? And as to how do you plan to fund it vis-à-vis foreign currency versus local?
So this year, the CapEx is INR 22,300 crore. So it will be a mix of domestic and foreign currency borrowing.
And sir, regarding the borrowing cost, you mentioned that for FY '18, it was around 6.99%. So how do you see borrowing cost evolve over the next financial year?
I think the interest rates are more likely to go up than come down.
Yes. So I think with having foreign currency versus local, how does the company prefer going about it?
No. We have a -- on a full year approach, we have about 30% in foreign currency borrowings and 70% in local currency. So a similar kind of approach we will have. In any case, interest cost is a pass-through. It becomes a part of the project cost during construction. And post-construction, it is recordable in tariffs. So the largest in Bihar indifferent of the movement in the interest rates.
We have a question from Amit Golchha from HDC Mutual Fund.
Sir, I had one follow-up question on under-recovery part. If you remember correctly, you said last quarter and 9 month, and you had mentioned that the under-recovery was around INR 1,000 crores plus on account of fuel shortage. So the fixed cost under-recovery was INR 1,000 crores and...
No, I think it was subsequently corrected. The full year amount is INR 800 crores, of which INR 546 crore was up in the third quarter and INR 254 crore is the current quarter.
Okay. So the full year -- and so you would have over-recovered in 4Q? You would have recovered part of the under-recovery of 9 months in the 4Q. Is that a correct...
Yes, please continue.
Sir, if you -- is it the correct assessment that you would have recovered part of the 9 months under-recovery in the fourth quarter?
No. Actually, there is I think some mix-up of the data. Actually, there are -- there is an annual fixed charge loss on 2 accounts. One is on the account of fuel shortage and another on account of other outages in terms of things. So INR 1,000 crore and all that you are talking what is the total [ AFC ] loss, which was there until last quarter. As far as the [ AFC ] loss due to coal shortage, it is only INR 800 crores for the total year and INR 546 crore for first 3 quarters.
Can you give the total fixed charge under-recovery also for the 3 years?
That is INR 1,433 crores.
So fourth quarter also, you would also have under-recovered by broadly 14 -- 400 crores?
Yes, yes, yes. Let me tell you one thing which I would like to inform all. That for this loss due to coal shortages, we'll approach CRC for getting relief on this based on the logics given by us. So that petition has been admitted by CRC on May 15. Arising hearing will take place later on. So that all these losses, we are trying to recap from CRC.
All right, sir. Sir, if I look at your other current assets in the balance sheet, a bookkeeping question. Other current assets have gone up by almost INR 6,000 crores -- broadly INR 6,300 crores from INR 4,500 crores to INR 10,900 crores. So can you, sir, give some details of this increase?
Part of it is the advance to railways.
[ Advance ] to railways, we have given an advance to railways, which were registered in tariff. INR 5,000 crores.
Okay. All right. And sir, last question is this year, deferred tax amount is significant. If you remember correctly, sir, post the last regulation, your policy was to recognize deferred tax currently and also recognize the counter-entries to that. Considering that you will recover whenever the materialization happens, you will recover the tax from the consumers or SEBs. So what is this amount related to? Is it current year amount or previous year amount in this year booked?
It is -- because of the solar projects, there is no such mechanism of pass-through.
Okay. So sir, INR 900 crores of deferred tax, broadly, you are saying related to sort of projects.
Yes. Because you got more depreciation there, no? So you have to clear that for tax liabilities.
Okay. And sir, this will continue for next few years?
Annually, you have to have capacity addition. The deferred tax liability is the problem. If in the year you have the maximum depreciation, you have to create 30% in terms of risk as deferred tax liability. It will unwind very slowly, but you have to initially create it.
We have a question from Murtuza Arsiwalla from Kotak Securities.
So I just wanted to check, your notes to accounts talks about issues at 2 plants. One is Kudgi, where there is an NGT order. The other is at Unchahar, where you had some tiering issues in terms of the commercialization of asset. Did we have any loss of fixed charge in the -- on these 2 accounts? Or even in terms of maybe we've booked the revenue, but any feel on recovering the money for these 2?
There's no such sales there. No such loss, I'd say, in Kudgi. The other one you are mentioning?
Unchahar.
Unchahar.
[indiscernible]
No, Unchahar, there is no such thing. The [indiscernible] you are talking about, one, I don't have -- no, we have not recognized that revenue.
You've not recognized the revenue in Unchahar?
No.
You have a question from Rahul Murkya from Jefferies.
So first of all, I -- would you just tell me what was the incentive income for the quarter?
I'll just get that number. Anything else?
Sir, this capacity addition which we talked about of 5,000 megawatt, sir, could you just repeat that, along with the megawatt for each plant? That would be really helpful.
Number one is Lara, 800 megawatts, number two is the Kudgi Unit 3, 800 megawatts; number three is at Meja unit 1, 660 megawatts; number four is the Bongaigaon Unit 3, that is 250 megawatts; number five is the Nabinagar BRBCL Unit 3, 250 megawatts; number six is NTPCL unit 1, 660 megawatts; Number seven is Solapur unit 2, 660 megawatts; Gadarwara unit 1, number eight, is 800 megawatts.
Okay. And sir, any plans...
This quarter is [indiscernible].
Sorry, sir?
Yes, please go ahead.
Any plans for FY '20 also you have finalized? Can you give what would be the capacity addition that you guys are thinking for FY '20?
FY '19, '20, also around 5,000 megawatts.
Okay. And sorry, sir, you were mentioning that incremental number?
No. For the current quarter, it's INR 120 crores.
INR 120 crores. And just another bookkeeping question. Sir, the wage revision number, that provision that you have created, you have mentioned that number to be around INR 1,200 crores for the full year. Is that the correct...
That is further -- no, that is a cumulative asset month. I think I should clarify this. The current year provision is INR 943 crores. There was a question previously how much we have recognized as regulatory recovery. It is INR 118 crores, okay?
Okay.
We have a question from Mr. Rahul Modi from ICICI Securities.
Sir, a couple of bookkeeping questions. Sir, in the notes to accounts, 3C and 3D, you've mentioned 2 amounts, INR 268 crores and INR 210 crores. Could you help with the issues and how to deal with this in terms of the adjustments?
3C is INT 257.9 crores. And one of the stations, we passed on a certain credit to the customer in the fixed charges.
Okay. So this is a reward, sir, is it, in terms of what we've booked?
Yes. This is for the previous period which we have. We have reduced -- we have kind of -- given a reduction in the sale.
Okay. And sir, so basically, to arrive at the adjusted PAT for the year, we should add this?
Yes. INR 267 crores is a one-off.
One-off? So okay, a fair point. So post-tax -- so we get a tax benefit on this?
Yes, we will.
Okay. And thirdly, 3D on sales of 21 -- there's a sales of INR 210.33 crores.
That is also a difference with -- for the [indiscernible]. We were getting the recovery of tax, which we also refund to the beneficiaries. So once we got the refund from the tax authorities, we are doing that refund.
Okay. So -- okay, this is a refund that we made?
Yes.
[indiscernible]
Okay?
Yes. So just one follow-up on that. Sir, in terms of the stressed asset acquisition, I believe we had received some UIs earlier. And sir, any movement on that front? And just to understand what is your view that, today, the setting up of new plants coming at more than INR 6 crores per megawatt, whereas some BHEL plants which are probably on the offer is sub-INR 5 crores. So what is your view on that in terms of taking up possibly some of these plants?
Actually, as I think all of you are aware that we have issued a UI. In fact, RFP, we call it, for the -- taking -- that's the first. And on this, I think we got 4 modules, which we have -- post the 4 modules, we have really done our initial due diligence. And now we have appointed a consultant to get into [indiscernible]. I think this process is on. I think another 1.5 months' time, we should be able to come out with a very clear proposal which plants we are taking over.
Right. So sir, any targets that you got in mind out of these 4? Or it'll be on merit basis?
No. Actually, out of this 4, it will be basically selected based on -- ultimately, we have to be able to sign a PPA for this plant, because these plants -- most of these plants do not have full 100% PPA. So once we establish that at the cost we are offering, if we are able to manage PPA, then only we'll be able to procure this plant, number one. Number two, as you ask for other projects corresponding that BHEL prices compared to these [indiscernible] prices, ultimately, the issue is the signing of PPAs. Now for the projects where the PPAs are already signed, we will be able to go ahead for construction of the projects. But for these projects [indiscernible], unless until we find buyers, we'll not be able to take over.
We have a question from Dhruv Muchhal from Motilal Oswal.
Sir, just to follow up on the earlier one. Can't we -- we are looking for refurbishing and -- some of the oil plants, just retiring them and installing new ones. So instead of that, why don't we look at acquiring some of these [ merchant ] plants, which probably you can get at INR 4 crores, INR 5 crores per megawatt? And you see on the capital cost, the decision [indiscernible] everything. So what is the view there?
Okay. These refurbished [indiscernible] first of all, as far as closure of the plant, we have only identified Badarpur and [indiscernible]. And we have already retired Patratu first phase. But these are the only projects which we are thinking of retiring. So other projects, we have not yet decided on closure of any other plants because these are the low-cost projects, where the variable charge is also low. These are the [ particular ] stations. So as on date, we have not decided for a closure of any other project.
Sure, sir. So for example, like the Patratu, you are looking at adding another capacity there. And the -- some of the old units are closed, but adding new capacity there. So instead, why don't we look at some of the merchant plants which are very close by -- close to coal mines and everything else, even [indiscernible] equipments?
You see, I had said last answer that, ultimately, I need a buyer. For Patratu new plant, we need a buyer. For [ this just ] there is no buyer. Unless until I get a buyer, I cannot invest. [indiscernible] powers, which we have. We can only invest in a plant where we have the power purchase agreement. So unless until we have PPAs, we cannot invest.
Okay, sure. So a second question was on the other expenses or also related to the adjusted PAT. We are seeing other expenses increase quite significantly. So what's driving it? And also, how does that impact the adjusted PAT or the reported PAT?
In other expenses, there is about INR 723 crores of foreign exchange direct variation, which has been recognized as an expense. It is the part of the regulatory recoverable balances. It is a kind of contract. Then we have INR 300 crores of other charges of earlier periods that's one-off over time. So that is a kind of one-off item.
So sir, those INR 300 crores is not part of any recovery [indiscernible]?
No, no. It is net to the P&L.
Okay. So if you can help us with the adjusted PAT number then. Because from the notes to accounts, I find the adjusted PAT will be significantly lower than the reported PAT. So just to get the reconciliation rate.
I think the adjusted PAT will be about INR 10,800 crores after accounting for all this one-off items.
So for the full year, INR 10,000 -- for the quarter?
No, it's for the full year. Most of them occur in this quarter.
Okay. I'll take that off. So just a follow-up on the equation of plants. Sir, there are a lot of PPA assets also available for acquisition. You have KSK. You have [indiscernible] probably other plants. Aren't you looking for that? Or that's not an option?
Actually, we have floated an RFP for all these projects to bid, and that process is on. And we had only 4 people who participated. All KSK and all that, whatever you are talking about, they had all the options to quote, but they did not participate. So we don't know whether they are interested.
Okay. Like for the [indiscernible] floating tenders for that, so are we -- aren't we actively looking for them? Or it's only the projects which come to us we are looking for them?
Yes. We have issued RFP for that purpose. That's people who want to sell it to us, so they can come through RFPs.
We have a question from Puneet Gulati from HSBC.
If you can help us understand what is the cost of the acquisition for the Bihar projects.
It will be about INR 4,000 crores.
The overall consideration will be about INR 4,000 crore -- INR 3,400 crores...
Sir, INR 3,000 crores?
INR 3,400 crores.
INR 3,400 crores, okay. For all 3 assets combined?
No, no, no. It is for Barauni.
It's for Barauni. And for others?
For Barauni, it is INR 3,400 crores. That includes the cost of 700-megawatt project, all right? And for other, [indiscernible] equity takeover at par that we sell you. And total consideration comes to around INR 5,400 crores. That includes expenditures to be incurred, no? This includes the cost of completion of Barauni, for which we have retained around INR 1,300 crores. So as far as the payment as -- at a particular time is concerned, this will be for INR 5,400 crores minus INR 1,300 crores. This we are retaining.
Okay. So you'll pay 15 -- INR 5,400 crores minus INR 1,300 crores to the government?
Yes. And that balance INR 1,320 crores will be retained to spend to complete Barauni project.
Okay. And how much debt will you take for the proportionate share?
Basically, once we are going to pay the total amount to Bihar, they will set out their loans. As far as we are concerned, we will have these particular done based on our debt equity ratio of 30-70.
70-30.
Sorry, 70-30.
Yes. No, what I'm trying to understand is, for example, in Kanti, you will take 27.26% stake, right? And in Nabinagar, you will take 50% stake of the government?
Right.
So -- and INR 3,400 crores is the cost of Barauni? INR 5,400 crore is the complete cost plus the equity part. Is that the right way to think about it? So INR 2,000 crores is the equity part for the balanced 2 projects?
Well, let me make it clear. I mean, I'll just clarify. As far as Kanti is concerned, we [indiscernible], right? So whatever is the [indiscernible] value. So that's...
Sorry, I missed the line here.
It's the equity takeover, and we'll pay at par for equity. As far as Barauni is concerned, we are going to pay the total consideration of INR 3,400 crores minus INR 1,300 crores [indiscernible] you can see, then invest NTPC in terms of 70-30 debt equity ratio.
Okay, okay. Got it. Got it. So basically, the INR 3,400 crores is for Barauni, INR 2,000 crore is for balanced equity?
Yes.
Okay, okay. Secondly, would you have any thoughts on the new approach which has come out from CRC? How are you thinking about the 3-part fixed tariff?
Okay. This [indiscernible] paper is basically [indiscernible] to discuss. We will take the question on paper. In fact, if you have read, it also says that it does not reflect the views of CRC. It only gives a discussion paper. Now we are going through this discussion paper, and I think there is a time given for us to react to CRC. And by 1st of July...
[indiscernible]
15th of July?
15th of July.
15th of July. So by that time, we'll be able to make our views very clear on this, and we'll share with you.
Okay. But they must have seen the 3-part tariff, whatever, is one of the options that you have discussed. Would it be fair to assume that it could be negative from your perspective?
No.
[indiscernible]
See, unless until we go through the whole thing, understand the whole thing and make our own calculation, I think it's not fair for us to really comment on this. This paper has been only put out very recently.
Yes, a fair point. Okay. Lastly, how many -- how much more PPAs are still available for you to execute in terms of the new power projects?
See, new PPAs, we will not be able to execute because now it is through only competition process, and we'll have to bid.
Okay. So other than the projects, which are under construction, everything will be through bidding route?
Accept the exemption of level to us for expansion of projects and the PPAs we've already signed with the beneficiaries.
Yes. So how many megawatts is that PPA, which has already been signed with the beneficiaries?
I think I will not be able to give you right away the answer. I think we can [indiscernible] calculate, and then you can get it.
[indiscernible]
Yes. I get the number, 36,000 megawatt is still there.
Okay. Where you signed PPA, but yet to start?
Yes.
Yes, yes.
We have a question from Mr. Amit Dalal from Tata Investment.
Sir, I just wanted 1 or 2 accounting figures. The capital work in progress as on 31/3/18 will be helpful, sir.
As on 31/3/18, [indiscernible] it is INR 77,313 crores.
Okay, sir. And sir, from '13 -- FY '13 to FY '18, the ROE as well as ROI has been gradually coming down. So I just want to know, what are the steps we'll take -- it will -- are able to improve ROE as well as ROI? So if you can just highlight that, sir.
As the projects come on stream from the CWIP, I think this will improve.
And sir, how much time approximately it will take the INR 77,000 crores -- it will take how much time approximately that will get over or less CapEx will be there?
4 years. 3 to 4 years.
We have our last question from Mr. Subhadip Mitra from JM Financial.
My questions have already been answered. Thank you.
We have a question from Mr. Bhavin Vithlani from Axis Capital.
2 questions. If you can highlight for the quarter FY '18 -- fourth quarter FY '18, fourth quarter FY '17, what is the adjusted PAT? And if you could help us bridge from the adjusted PAT to the reported PAT. That is my first question. Second question is a follow-up to what you said that the loss on account of the coal shortage was INR 800 crores for the year, and the loss on account of unavailability of plant is INR 1,440 crores. Both are mutually exclusive or INR 1,440 crores includes the INR 800 crores? So if you can delve on the under-recovery part. These are my 2 questions.
[indiscernible]
Hello?
Ladies and gentlemen, please stay on the line. We are connecting back the management from NTPC. [Technical Difficulty]
Who from Axis had a question?
Yes, yes. So I'll just repeat my question. I thought I already got disconnected. I had 2 questions. One is for the fourth quarter and for the full year, for the current year as well as last year, what is the adjusted profit after you announce? And if you could help us on the bridge between the reported profits and the adjusted profits. My second question is a clarification on the under-recoveries that you mentioned. One is the INR 800 crores on account of coal shortage, and another is INR 1,440 crores on account of under-recovery of fixed charges due to plant unavailability. So does the INR 1,440 crores include the INR 800 crores on account of coal shortage?
Yes.
Yes. This INR 1,443 crores includes the INR 800 crores on the coal shortage. [indiscernible]
I understand. So what -- okay, sir, could you highlight what is the under-recovery in the Badarpur and the Unchahar plant for the year?
Unchahar plant is not available now post that accident. So that is the reason. And Badarpur is -- the environmental approval [indiscernible] further plants.
Sure. So could you help us with the value of the under-recovery in both of these plants?
Okay, let me help you. Unchahar, it is INR 219 crores, and Badarpur is INR 270 crores.
INR 270 crores. And the under-recovery of INR 800 crores on account of coal shortages, these will be Mouda, Kudgi, Solapur. Will that be correct?
This will be Mouda -- this is Mouda, Solapur, then Dadri, Bongaigaon.
Okay. And sir, are these under-recoveries due to coal shortages? Have you seen them turning around in the first quarter? If you can give us some guidance on the...
I think it was already informed, yes, there is an improvement.
Okay, yes. So my first question is if you help us bridge from the reported PAT to the adjusted PAT fourth quarter and the full year.
I think we can take it offline. I gave the adjusted number for the full year. We don't have the number for the quarter readily.
I now hand over the floor to Mr. Ashwani Sharma for closing comments. Please go ahead, sir.
Yes. We would like to thank the entire management of NTPC for giving us the opportunity. We would also like to thank everyone for showing interest in the financial performance of NTPC, and we will look forward your continued support in the years to come. Thank you very much.
Thank you.
Thank you. Thank you for your time.
Ladies and gentlemen, this does conclude your conference call for today. We thank you for your participation and for using [indiscernible] conference service. You may please disconnect your lines now. Thank you, and have a great evening.