REC Limited
NSE:RECLTD
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REC Limited
Earnings Call Analysis
Q3-2024 Analysis
REC Limited
The company has received shareholder approval to expand beyond its traditional power sector and is now engaging in funding diverse infrastructure projects including health, steel, IT infrastructure, roads and highways, metro, ports, waterways, airports, and oil refineries. This decision reflects the company's role as a trusted arm of the Government of India, and it has been appointed as the nodal agency for key government programs such as DDUGJY for village electrification, Saubhagya for household electrification, and the Suryodaya Rooftop Solar Program.
The company reported a strong financial performance with an EPS of 50.65 and a book value of 246.04 for the calendar year 2023. It claims to be the highest wealth creator in the mid-cap segment for investors. Importantly, Foreign Portfolio Investors hold about 20.6% of the company's portfolio, illustrating trust and consistency in their investment since the company's IPO. A substantial dividend yield of 126% was given out in 2023, with a declared dividend of INR 6.5 per share, maintaining the company's general policy of distributing 30% of profit as dividends.
The company highlighted a growth in sanctions to INR 325,941 crores from INR 268,461 crores over the fiscal year, with disbursements surpassing INR 1 lakh crores by November of the same year. The outstanding loan volume has grown to INR 497,466 crores, indicating the company's robust pan-India presence and a strong focus on state and joint sector lending which comprises 90% of its portfolio. The company boasts about its top borrowers, all from the state sector, where there have been no slippages.
The company's asset quality has consistently improved, with no new non-performing assets (NPAs) in the last 8 quarters. The current net NPA is at 0.82% and gross NPA at 2.78%, with a provision coverage close to 70%. The management expressed expectations of resolving several large assets by the end of the fiscal year, with the goal of reducing NPAs significantly below INR 10,000 crores by March 2025.
Maintaining a strong credit rating of AAA by all four major rating agencies and international ratings on par with sovereign ratings, the company further strengthened its credit profile by achieving a BBB+ rating from Japanese credit agencies. Its borrowing composition is diverse, with corporate bonds constituting 41% and foreign currency borrowings, which are 98% hedged, making up 21%. In the current quarter, INR 39,577 crores were raised, contributing to the nine-month period total of INR 119,462 crores.
There was a 19% year-on-year increase in total income, amounting to INR 34,571 crores, and a 24% rise in net profit reaching INR 10,003 crores. The total comprehensive income also surged by 53% to INR 9,880 crores. The loan book expanded by 21% year-on-year with an ambitious target to grow the asset under management to more than INR 515,000 crores by the end of March 2024.
The company reported attractive financial ratios with a net interest margin (NIM) of 3.52%, slightly above their target of 3.5%, and a high return on net worth of 21.78%. The company is also showing strong interest coverage and debt-equity ratios, underlining its commitment to maintaining financial stability and maximizing shareholder value.
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Good afternoon, everyone. Sir, we are good to go?
Yes, please go ahead.
We'll start the call. So good afternoon, everyone, and welcome to Q3 FY'24 Earnings Call of REC Limited. Today, we have the senior management team of REC Limited, represented by Mr. Vivek Kumar Dewangan, IS and CMD of the company; accompanied by Mr. Ajoy Choudhury, Director of Finance; Mr. Vijay Kumar Singh, Director Projects; and other senior members of the team.
As the process, Mr. Dewangan will open the floor with his opening remarks and some outlook on the growth, margins and asset quality going ahead. post which we'll open the floor for Q&A. [Operator Instructions] Now I hand over the floor to Mr. Dewangan. Over to you, sir.
Good afternoon, all the investors and analysts. It's my proud privilege to share with you the results of quarter 3 of REC Limited. Last year, you must have observed that our assets under management had grown at the rate of 13%. It had grown from INR 385,000 crores to INR 435,000 crores in the last financial year.
But in the current financial year, our asset under management is growing at the rate of 20%. Our assets under management at the end of quarter 3, as on 31st December 2023, stands at INR 497,466 crores. If we compare year-on-year basis, our asset under management has grown by 21% because our asset under management at the end of 31st December 2022 were INR 411,148 crores.
With regard to sanctions, there is phenomenal increase in the approvals according to different projects. Last year, in the entire year total project sanctioned or approved were to the tune of about INR 268,000 crores. In the current financial year, in 9 months itself, we exceeded last year's 12 months performance. At the end of 31st December 2023, our total approvals and sanctions stand at around INR 325,941 crores, that is year-on-year basis, an increase of 69%.
With regard to disbursement -- the last year the entire year, our disbursement was about INR 97,000 crores. This we already exited in the month of November. And at the end of 31 December 2023, our total disbursement stands at INR 122,089 crores. And we are committed -- and we are 100% confident that in the current financial year, our total disbursement by the end of 31st March 2024 will cross INR 150,000 crores.
Our total income in the first 9 months has grown by 19%. Total income is -- in the first 9 months is INR 34,571 crores as compared to INR 29,129 crores in the last financial first 9 months. The profit after tax has also grown by 24% in first 9 months. Last year, in the first 9 months, our profit after tax was INR 8,054 crores at the end of 31st December 2023. Our profit after tax stands at INR 10,003 crores, signifying a growth of about 24%.
Our net worth has increased by 18% on year-on-year basis as on -- at the end of 31st December. Now our net worth is -- has increased from INR 54,840 crores as at the end of 31st December, 2022, to INR 64,787 crores at the end of 31st December, 2023. Our capital adequacy ratio is quite comfortable at 28.21%. Our margin increased to 2.78% and our net interest margin is about 3.52%.
Our gross and net NPA have gone down. At the end of quarter 2, our net NPA was 0.96%. Now at the end of 31st December 2023, our net NPA stands at around 0.82%. Here, I would like to mention that at the beginning of 2018, '19, we had total 36 stage assets. Out of this 36 stage assets, we already resolved 20 stage assets. In Q3, we have resolved 3 assets, DANS Energy, Meenakshi Energy and Classic Global.
And the remaining 16 projects are also at different stages of resolution, and we are quite confident that we'll be able to resolve those stage assets by the year 2025. Another distinguishing feature is that our no new NPA has been added into our [ KT ] in the last 8 quarters, and we hope to maintain this track record. The major shift or focus area for us is renewable energy projects now, most of because honorable Prime Minister has announced PM Suryodaya Yojana that is Rooftop Solar Mission has been launched to cover 1 crore household for a period of 1 year.
Ministry of New and Renewable Energy is the Nodal Ministry for the implementation of this Rooftop Solar Scheme and MNRE has designated REC as the overall program implementation agency, and they have given us the target to cover 40,000 megawatt capacity of rooftop solar by the end of 2026. It is a huge responsibility on REC, and it is quite a complex task, but as you might have seen our track record, we were able to successfully complete 100% village electrification as well as 100% household electrification through the two flagship schemes of government of India that is Deendayal Gram Jyoti Yojana scheme and Saubhagya scheme.
So we are committed to implement 1 crore household by rooftop solar within 1 year under Rooftop Solar Mission. And by the end of 2026, we are committed to commission 40,000 megawatt capacity from rooftop solar. The asset under management we are targeting is INR 10 lakh crores by the end of 2030. And we are quite confident that at the end of this current financial year, our asset under management will cross more than INR 510,000 crores.
And now with a renewed focus on renewable energy sector, our renewable energy portfolio is bound to increase. In the current financial year, we have sanctioned renewable projects, including large hydro amounting to about INR 125,000 crores. Our renewable energy portfolio, we are targeting to increase it to about INR 3 lakh crores, that would be about 30% of our asset under management by the year 2030. Government of India has also allowed us to diversify into non-power infrastructure & logistics that also we'll be giving a priority area, and we have already started financing electromagnetic components of refineries, steel plants.
We have started financing metro project, railways, projects of MMRDA, the road and highway projects of MSRDC it's like Mumbai-Pune Expressway, Kagal-Satara route, Ganga Expressway. So we are looking for financing, airport projects, ports, IT infrastructure, data center, super-specialty hospital. But one thing that we are ensuring is that asset quality should be good and revenue cash flow should be insured so that there is 100% payment security mechanism available to us, so that none of this new non-power infrastructure & logistics become NPA in the future.
With this, I would like to assure all the investors that REC is committed to keep this growth trajectory of 20% in our asset under management and with your support and guidance, we are committed to take REC to a new height. Thank you so much. Now I'll request our Director Finance to make a brief presentation on our financial results of Q3.
Thank you, sir. Next. So REC journey from -- we were born in 1969. And since then, we have grown -- we are the first Indian PSU to issue USD green bonds. And we were also conferred with the Maharatna status in 2022. Nodal agency for very important government programs like DDUGJY and Saubhagya and RDSS. Last year, in 2023, we made a largest green bond issuance of USD 750 million. And we also recently issued -- the first PSU to have Japanese yen bond issuance. Next.
So these are the key strengths, highest domestic rating and sovereign rating at par, nodal agency, experienced management team, strong fundamentals, Maharatna company, diversified asset base, healthy asset quality, and we occupy a strategic position in the growth and development of the power sector. So lots of awards and accolades. We were awarded Golden Peacock Award for Risk Management and also for corporate governance by the Institute of Directors London. Recently, ICAI has awarded us the best financial -- on financial reporting, The Best Company in the Financial Services Sector.
In the Fortune 500, we ranked 53rd. So Maharatna company gives us greater operational financial autonomy and also allows us strategic investments by incorporating JVs. This is the highest ranked -- Maharatna is a highest rank among the PSUs and total 13 PSUs -- total of 13 PSUs have been accorded this status so far. Next.
So we -- last year, we got the shareholders' approval foraying into the infrastructure. So now we are funding to -- apart from power, we are also funding to health, steel, IT infra roads and highways, metro port, waterways, airport, oil refinery, et cetera. So we are a trusted arm of the Government of India. We were the nodal agency, as I've told you, for DDUGJY very important program for village electrification and then for 100% household electrification, which is Saubhagya.
We are also along with PFC, we have a nodal agency for RDSS scheme, which is the reform of the distribution sector, which is yielding very good results as of now, with our AT&C losses having come down to almost 15% now. Now the government of India has recently announced -- honorable Prime Minister has recently announced the Suryodaya scheme of Rooftop Solar Program. And as our CMD mentioned, that we have been appointed as the nodal agency for this important program.
So EPS is 50.65, book value of 246.04 in the calendar year '23. As you know, probably in the mid-cap segment, we were the highest wealth creator for the investors. FPI holds around 20.6% in our portfolio. So they have consistently held more than 20% in REC's share since IPO, yes.
So dividend yield, if you see, we are 126%. We gave out in 2023 so far. And we have already declared INR 6.5 per share. Generally, we maintain 30% of our profit as dividend. Okay, on operational performance, our sanctions have grown to INR 325,941 crores from INR 268,461 crores in FY -- 12 months ending FY'23. Okay, disbursements. Last year, we achieved INR 96,846 crores. This year, by November, itself, we had crossed INR 1 lakh crores. And currently, at the end of December '23, we are at INR 122,089 crores.
Outstanding loans amount to INR 497,466 crores outstanding loan currently from INR 435,012 as of the end of March 2023. So we have a pan-India presence. Our lending is largely to the state and joint sector, close to 90%, and private sector borrowers account for INR 47,435 crores. State-wise, if you see, Telangana is the highest state where we have highest loan outstanding, followed by Tamil Nadu and then Rajasthan and Uttar Pradesh. So these are our top 10 borrowers -- all state sector borrowers, where we have never had any slippages ever.
So asset quality consistently improved, no new NPAs during the last 8 quarters. Net NPA currently at 0.82% and gross NPA at 2.78% with provision coverage of close to 70%. Most of the assets that we are resolving are giving us write-backs. And we hope that by the end of this financial year, we should be able to resolve at least 2 to 3 very big assets.
Yes, so loan portfolio. Total loan of 4.97 lakh crores out of which INR 13,812 crores, we expect this to come down below INR 10,000 crores by the end of March '25, 70% provisioning coverage. INR 12,297 crores are in NCLT, 13 projects with 74% provision and 3 projects are outside NCLT being resolved with a total amount of INR 1,514 crores. So credit rating, AAA by all the four major rating agencies. And internationally, we are rated at par with the sovereign BAA3 by Moody's and BBB- by Fitch.
This year, we also took the Japanese credit rating, which has given us BBB+ rating. Outstanding borrowings corporate bonds constitute around 41% of our total borrowing at INR 175,782 crores now. Foreign currency borrowing, which is at 21%, is INR 91,627 crores. And 98% of these foreign currency borrowings are hedged. Capital gain bonds at INR 41,132 crores, constitute around 9%. The rest are bank loans at INR 87,185 crores, which is around 20%.
This quarter, we raised a total of INR 39,577 crores. And last year, we had raised INR 86,884 crores. Total in this 9-month period, we have raised INR 119,462 crores. Yes, so these are some of the highlights. Total income at INR 34,571 crores as of the end of December '23, 19% increase year-on-year. Net profit stands at INR 10,003 crores, 24% increase year-on-year. Total comprehensive income at INR 9,880 crores, 53% increase year-on-year.
Loan book, INR 4.97 lakh crores, 21% increase year-on-year. Asset quality, net impaired asset at 0.82%. Net worth now have gone up to INR 64,787 crores, up 18% year-on-year and capital adequacy at very comfortable 28.21%. Some of the key ratios, if you'll see. Our yield as of the end of December '23 is 10.13%; cost of funds at 7.28%, so interest spread is -- this is for the Q3. Interest spread is 2.85% and net interest margin 3.61%. But if you look at the 12-month -- 9-month period of FY'24, yield is 9.98% and cost of funds have come down to 7.16%, giving us spread of 2.82% to and NIM of 3.52%. So we had stated earlier that we'd like to have our NIM at around 3.5%. So this quarter, we have achieved that.
Our return on net worth is 21.78%; interest coverage ratio at 1.57; and debt equity ratio at 6.65. So thank you very much.
Now we are open for questions here.
[Operator Instructions]
Some people have already raised their hand, you can invite them one by one. I can see Shreya Shivani, CLSA. She may unmute and she may ask the question.
Bala ji, you can unmute yourself, your line is unlocked.
I really thank the management and the key employees of REC for delivering good returns for the investors. My first question is that in power sectors, you're doing really well. But since you are diversifying to other sectors, how you are going to manage the risk, especially from the NPA perspective?
That's is a very valid question that was uppermost in our mind when Minister of Power allowed us to diversify into non-power infrastructure and logistics in the month of October 2022. So we were a bit cautious. And initially, we sanction only those infrastructure logistic projects which were supported by the state government guarantee like MMRDA Metro project was supported by the state government guarantee, then we sanctioned MSRDC project, Mumbai-Pune Expressway that was also supported by the state government guarantee.
In the meantime, in the last 1 year, we have enhanced our manpower. We have taken experts from infrastructure and logistics sectors who are expert in different road sector, railway sector, those who are expert in the refinery, E&M component, airports, ports, et cetera. So on the one hand, we have enhanced our expert manpower and we also strengthened our entity appraisal and project appraisal. And in non-power infrastructure and logistics, we are targeting only good asset quality so that they do not become NPA in future.
And we are ensuring that we should finance only those infrastructure and logistics projects, which are supported by the revenue cash flow and [indiscernible] payment security mechanism available to us so that this project do not become NPA in near future. And because you might have observed that last 8 quarters, not a single NPA has been added into our KT and we are quite conscious that no new NPA should come into our books. That's why we are taking all the -- carrying out due diligence with strict entity and project appraisal, so that only good asset quality with assured revenue cash flow financed by REC.
My second question is related to your loan -- asset under management by 2030. You mentioned your target is INR 10 lakh crores, but do you think that INR 12 lakh crores to INR 13 lakh crores is possible by 2030?
Yes. You might have seen that at the beginning of financial 2022, '23, our asset under management was INR 385,000 crores. And in -- by the end of March 2024, our asset under management will grow to more than INR 515,000 crores. So in 2 years, you have seen that about INR 130,000 crores asset under management has been added. And since why I'm confident why our asset under management will exceed INR 10 lakh crores-- In fact, we'll be able to achieve a asset under management of INR 10 lakh crores earlier than 2030 perhaps we might achieve 2029 itself.
2 significant development has happened. I had mentioned during the interaction with the investor after Q2 results also that in July, we had carried out one green finance summit at Goa around the sideline of G20 Energy Transitions Working Group meeting. There, we had signed MOUs with the project developers, technology providers, OEMs, pertaining to renewable energy sector and also electric vehicle ecosystem. We were able to sign MOUs worth INR 286,000 crores. And out of this INR 286,000 crores, which -- MOUs which we have sanctioned, we are already sanctioned in last 6 months, we already sanctioned projects more than INR 1 lakh crore.
And I'm quite confident that this INR 286,000 crores would get sanctioned in the next 1.5 year by the mid 2025, we'll be able to sanction all these projects. And since you know that disbursement does take some time. Whatever it we have sanctioned the entire disbursement will happen in the next 2 to 3 years in the renewable energy project. Similarly, non-power infrastructure and logistics also, last year, we had sanctioned INR 85,000 crores. And this year, we are targeting that we'll touch about INR 1 lakh crore from non-power infrastructure and logistics also. And plus, asset itself is the power demand is increasing significantly.
Government of India has decided that this go for capacity addition of 80,000 megawatt capacity for coal-based thermal power plant. This is coming mostly in central and state sector. Very few private sector projects are coming up. They are also there. So we are committed to finance this coal-based thermal power plant. And distribution sector, we are implementing agency as a nodal agency for Revamped Distribution Sector Scheme in respect of 16 states and 32 distribution companies. The RDSS has an outlay of INR 303,000 crores and with government of India grant of about INR 97,000 crores.
This -- in the last 1.5 years, a lot of development has taken in distribution sector the introduction of late payments such as [ Bheem ] Government of India has really improved the situation. The dues of the gencos and transmission companies are being paid on time. The government department dues are getting cleared. The fixed trajectory committed by the discount with the support of the state cabinet. They are adhering to the trajectory committed under RDSS, they are clearing the legacy subsidiary dues in a systematic manner.
And with regard to the current subsidy, they are paying subsidy -- quarterly subsidy in advance. For quarter 4, subsidy has already been paid in quarter 3. So that's how systems are improving in distribution sector. And AT&C losses have come down significantly by about 5% from 22% to 17% AT&C losses were reduced. So distribution sector is also looking up. And with regard to transmission, since we are targeting installation of 500 gigawatt capacity from non-fossil fuel sources.
It will also require associated transmission system for evacuation of this renewable energy. So there's a huge potential for transmission sector. That's why we are quite bullish on the outlook of the power sector, particularly in renewable energy sphere as well as non-power infrastructure and logistics also.
Next, we will take Shreya Shivani from CLSA.
She has mentioned that she is not able to unmute. Could you please help her in unmuting?
Could you please enable those who are raised their hand, turn by turn, they can unmute themselves.
Meanwhile, let me come back to Shreya. In the meanwhile, Bhavesh, can you go ahead with your question?
First of all, congratulations to the great set of numbers as well as wonderful performance. Appreciate the hard work and helping the country get better. I have a couple of questions. Number one, can you share the improvement or the current numbers in terms of return on assets? Because since we are a financing company, it will be great to have that, and I'm probably missing that number in this quarterly numbers.
And the second part is around, we see that in terms of the performance Q-on-Q, probably we have not done as well as last quarter. Is this kind of a lumpy business and we should see year-on-year or is there a reason for that? And lastly, assuming that you have not given dividend this quarter and you are continuing with the dividend policy of around 30% of overall profit or so probably at the final dividend, it will get accounted for. So those are the questions.
Let me address that Q2 versus Q3. Actually, in Q2, we had made reversal of expected credit loss to the tune of about INR 508 crores, and they were reversal. Total was INR 670 crores. That reversal had happened in Q2. If we discount that reversal on account of expected credit loss, the effective PAT for Q2 was about INR 3,103 crores. And in Q3, the PAT has increased to INR 3,269 crores. With regard to return of our assets request.
Sir, is the return on assets is concerned, it's about 2.8%.
With regard to dividend, I would like to clarify that we are committed that 5% of net worth or 30% of PAT, whichever is higher. We are committed as per the guideline issued by [ DIPA ]. Some interim dividend will be issuing the current financial year and final dividend will also be there. So we are committed that 5% of net worth or 30% of PAT, which ever is higher that we are committed to give dividend. No doubt about that.
We'll take next from Shreya.
Okay. Okay. Really sorry for this technical issue and congratulations on a good set of numbers. I have 3 questions. Sir, first is on the loan growth, while it's great to see a good growth in the renewable and even the Generation segment. Within the discount -- distribution segment, can you help us understand this RBPF line item that has grown quite a bit this year. This line item had 0 loan book in FY'22. So that will help us understand what's going on here? What's the tenure of these loans, which segment?
What is it about? I understand it's for the distribution segment. Second, sir, on the assets that have gotten resolved. As far as I remember reading a media article where it was mentioned that DANS Energy will probably be a 100% recovery project. Can you help us understand how much recoveries we've made in Meenakshi and Classic Global? It seems like that the write-offs have been higher in these two projects?
And sir, my third question is recently, RBI had released these draft guidelines for government NBFCs that you guys will be brought under scale-based regulation and the exposure norms will be applicable for you. Now you give out loans to certain states or certain state DISCOMs, which are a part of LPS and also clearly, your exposure norms will get flouted. So what will be the impact on you? And how should we read into that regulation? Those are my three questions.
I'll request our director project, he'll about this. RBPF Revolving Bill Payment Facility. Thereafter, director finance will take up. And with regard to RBI guidelines, also, director finance will address this question.
So our RBPF is Revolving Bill Payment Facility, madam. Actually, in fact, when Government of India has introduced the scheme of late payment surcharge on 3rd June, which was effective 3rd June. So there were 2 requirements for the utility. One was to liquidate the legacy dues, which was close to INR 139,000 crores as on 3 June, 2023, which has, of course, now come down to INR 60,000 crores. There was another requirement -- 3 June 2022. And there was a little requirement of continuously clearing the current bills of the gencos.
So legacy dues -- I mean, there was 1 loan product for legacy dues. And for current payment dues, we had introduced this RBPF, Revolving Bill Payment Facility. Now the -- this facility is actually only for a period of 1 year, and it is revolvable. I mean utility like a cash credit facility by the bank can draw the facility and pay back without any implication of prepayment premium. And this facility can be renewed after 1 year, subject to satisfactory repayment and other things in the facility. So over to you.
Sir, just a follow-up on that. So the RBPF and LPS line item together, those 2 line items should be considered as part of the same scheme, which was launched by government last year, right? That's correct, right?
Yes.
Because I could see that in LPS, you have sanctioned about INR 72,000 crores, but your disbursals in LPS segment has only been cumulatively been 38. So I should also count the RBPF disbursals then only I will be able to come to the sanction. Is that correct?
So LPS sanction was for the legacy dues. And using LPS, the DISCOM can draw that facility and liquidate legacy dues, dues prior to 3rd June. Whereas under RBPF, any current dues subsequent to 3rd June if utility is actually taking power from genco and the current bills are required to be paid. For that particular payment, RBPF can be used. So RBPF is only for current and not for legacy. LPS is all legacy and not for current dues.
Tenure also there is a difference. The LPS loan that we have given, maximum tenure is 4 years. Some of the DISCOMs, they opted for 48 equated monthly installments. Some of them have even operate for lower. Some of them are -- will be clearing this LPS loan within a period of 3 years also. The RBPF Revolving Bill Payment Facility loan is short term loan, it is -- tenure is less than 1 year and repayments are happening within a period of 6 months also. Now with regard to state asset, particularly resolution on DANS energy, Meenakshi Energy, you can give the figures.
So on DANS Energy, we have -- of course, as I said, we have recovered 100% plus some interest. So this asset now has been restructured with PPAs available. So this is -- this has been resolved fully and without any haircuts. Meenakshi Energy was -- our exposure was INR 710 crores, where the recovery has been to the tune of 20%. So there, the write-off -- our provisioning was around 80%. So there has been a write-back of INR 71 crores. Classic Global is a small case of only INR 3 crores of loan, and we have recovered 86% in this case.
As far as DANS Energy is concerned, the total outstanding was 366.88 and we have recovered 415.98. So there is excess recovery of INR 49.10, 113%.
Got it. And sir, in Meenakshi, your loan outstanding was [ 7 billion, ] right?
INR 10.84 crores.
And on the RBI regulation.
RBI guidelines, even if we have put in the larger borrower framework there isn't going to be much of a challenge because we are already complying with the exposure norms of RBI. So we are fully compliant with all the provisions of RBI with regard to the upper layer. Currently, although based on our balance sheet, we are in the upper layer, but because we are a government-owned entity, we are in the medium-term layer -- we have been put in the medium layer. So -- but even if it is in the upper layer, we have no challenge.
Obviously crossed the 25% limit?
25% limit?
There's an exposure norm, right? You cannot -- to a single borrower you cannot have more than a certain percentage. So that will get crossed, right?
No, no, that will not get crossed. For a infrastructure finance company, like REC, the limit is 30%. So we are fully compliant with this. For an individual borrower, we have not crossed 30% of the exposure. And for group of borrowers, it is 50%. So that also we are complying fully. So there is no issue on that.
We'll move to next participant. Jigar Jani, you can unmute yourself and go ahead with your question.
Congratulations on a great set of numbers. Just wanted to know, you mentioned that there are 3 large projects that are coming up for resolution probably by the end of the fiscal year. Could you throw some more light on which are these projects? And what are the expected write-backs that we can see from these projects? That is number one.
And second, what would be our target in terms of loan growth, say, for FY '25 considering we are setting on a very strong sanction book and all the projects that we are involved in? And will we have any benefits from the rooftop project that you just mentioned in terms of disbursements? Or we are just an implementation agency on that front?
So regarding three major assets -- in fact, there are more than 3, but 3 major assets that includes TRN Energy, where our exposure is close to INR 1,500 crores. It also includes Bhadreshwar Power in Gujarat and Nagai Power in the state of Tamil Nadu. So those 3. And there's some development happening in case of Lanco Amarkantak also, where after the conclusion of first round a resolution plan was submitted, but now there is a much better offer from 1 or 2 new persons -- entities. So we are evaluating that option also. And we believe that Lanco Amarkantak for us being the largest may also get resolved in the third -- in the fourth quarter.
With regard to asset under management in FY '25, we are expecting that in the current financial year, our asset under management will cross INR 510,000 or INR 515,000 crores. For FY '25, we are targeting AUM of about INR 6 lakh crore. And what was the other question?
The rooftop solar, do we...
Rooftop solar, yes. Rooftop solar, REC has been enacted by Ministry of New and Renewable Energy as overall project implementing agencies. We'll be coordinating with the rooftop owners, distribution companies vendors, the financing companies. In addition to that MNRE has also identified it -- the central public sector undertaking and the Ministry of Power, 8 [ CPACs ] have been designated. They'll be setting up their solar subsidiary, which will be taking up rooftop solar in RESCO model. For that today in our Board meeting, line of credit through the [ CPAC ] about INR 15,000 crores to each of the [ CPAC ] subsidiary, which will be implemented rooftop solar, we are acquiring line of credit facility. For 8 subsidiary, the maximum amount could go up to INR 120,000 crores.
As per the mandate gain by MNRE to us by the year 2026, we had to make efforts to install 40,000 megawatt capacity from rooftop solar. So assuming an investment of INR 5 crores per megawatt, the total -- INR 5 crores to INR 6 crores actually, the total investment may range from INR 200,000 crores to INR 240,000 crores for installation of 40,000 megawatts capacity.
The subsidy amount is available for lower capacity, say, 1 kilowatt to 10-kilowatt capacity. Subsidy ranges from 20% to 40%. Ministry of New and Renewable Energy is in the process of revising the subsidiary structure also, perhaps more subsidy will be given to -- from 1 to 3-kilowatt that they'll be taking approval of the competent authority and then soon notify.
So we do see potential that rooftop solar business will also give us this certain business if we are able to finance these [ CPAC ] subsidiaries who will be working as RESCO, renewable energy service companies.
Okay. But this would be showing up in FY '25 major lease for [indiscernible]?
In the current calendar year, we are targeting 1 crore household. So if we go by the lowest denomination say only 1 kilowatt per rooftop, even then it will entail 10,000 megawatt capacity. But most of this rooftop solar will come in the denomination of 2-kilowatt or 3-kilowatt capacity. So about the total installation may happen from 10,000 megawatt to 20,000 megawatts by the calendar year 2024 -- by the end of December '24.
Okay. Understood. And just -- sorry.
Yes. Most of it will come in FY '25, that's correct because in the current financial, only 2 months are left. So whatever is possible in the next 2 months will come, most of it will come in FY '25 only.
Right, sir. And you mentioned the exposure for TRN Energy. Could you also mention for the other two projects, Bhadreshwar and one more project that you mentioned?
Yes. So Bhadreshwar, we have an exposure of INR 900 crores. Lanco Amarkantak is INR 2,300 crores. And we also have Nagai where it is INR 500 -- INR 560 crores is in Nagai. So these are the 4 which we are looking at resolving at least this year -- this financial year.
We will take the next question from [ Nishant Shah ].
Congrats on the very good set of results. Just following on from the last question, like just to be doubly clear, this rooftop solar opportunity is basically us not really lending to individual owners of the rooftops are like end retail customers. It is as -- this is still going to be more of a B2B kind of like loans to other companies, right?
Yes.
Yes. Perfect. And secondly, you mentioned like between 10,000 to 20,000 megawatt is the capacity that's getting added on this. How much does that translate to in terms of AUM or disbursement opportunity?
Yes. Say, assuming 10,000 megawatt capacity gets installed, if we go by the lowest -- most conservative estimate, 10,000 megawatt will entail a total investment of -- if we save INR 5 crores per megawatt, so it is INR 50,000 crores. So INR 50,000 crore, some of it will come in the lower category where subsidy will be applicable. If we go by the most conservative estimate, the 40% will come in the former subsidy.
So around INR 20,000 crores would come as subsidiary. There will be financing opportunity for INR 30,000 crores, but some retail financing. Retail financing, we are not going into retail finance. Retail financing will be done by the banks, et cetera. But for big vendors like [ CPACs ], for them will be provided. So we'll be able to finance about INR 15,000 crores to INR 20,000 crores from rooftop solar in the 1 crore household.
Understood, sir. And just so I remember this -- your own growth guidance for next year is about 15%, 16%, right, like from INR 5.15 or something trillion to INR 6 trillion?
Next year, as I have mentioned, that current financial year, we are targeting our loan book will go to more than INR 510,000 crores. Next financial year by the end of March 2025, our loan book will grow to about INR 600,000 crores.
Yes. Exactly. So that's what I was asking. It's about 16%. Okay. Perfect.
Next question is from [ Arvind R].
Can you hear me?
Audible. Please go ahead.
Congratulations on the great set of numbers. And my question is on the same lines loan growth. You mentioned about INR 5.15 lakh crores by the end of this year and INR 6 lakh crores by end of next year. So it implies like close to 17% to 18% kind of a growth rate. I'm also looking at the disbursement numbers for this year. Out of INR 1.2 crores, we have disbursed in this year taking 9 months 2023, '24 numbers, half of that came from the distribution scheme itself and most of it is more of like a one-off schemes like the DISCOMs need financing to clear the dues.
I'm just trying to understand where would the disbursements opportunity come from like if distribution sector is not going to contribute next year, which segment would contribute to that kind of a growth? That is my first question.
And my second question will be on like a margin yields have improved and cost of funding also like improved in the current quarter, like in comparison to the last quarter. What do you see yields and cost of funds to set up like a for the next few quarters, do you expect any increase in cost of funds due to market situation or anything else?
Yes, I would like to take this question. I'll just first take the margin. Then I'll take this -- disbursement profile, let me -- you asked very valid question. Current year, our disbursement up to end of 9 months was INR 122,000 crores. And this year, we are targeting that we'll touch about INR 150,000 crores. You are quite right that LPS and RBPF will not be much significant in the next financial year. But next year, what will happen, that renewable energy project that we are seeing, their disbursements are going to pick up actually. This year, not quite disbursement has happened. But next year, from renewable energy segment and non-power infrastructure and logistics is not a huge disbursement will happen from these two sectors. Plus conventional generation that we have -- now it is being expedited. Ministry of Power is closely monitoring this coal-based thermal power plant. Those are in the pipeline, they have to be commissioned. There also quite significant disbursement will happen.
Then RDSS, revamp distribution sector scheme, what is going to happen is that -- the result evaluation framework is quite tight. So some of the states, which will not be able to clear this result evaluation framework because the work has already commence. They will require funding. If they are not getting government fund in that regard, they'll seek loan from REC and PFC to continue the work. And once they are able to qualify for REF then only they'll able to claim amount from the government of India. So we hope that we'll be able to maintain this growth trajectory of disbursement in the next financial year as well. Now you can go on the margins.
Just as a clarification, so you are saying the [INR 150,000 crores ] kind of disbursements can -- is possible even next year we're seeing?
Yes, yes, definitely. Next year, more than 1.5 lakh actually, we are targeting, it should cross more than INR 1.5 lakhs crore next financial also.
So regarding margins, our cost of funds have actually slightly come down in spite of the -- all the elevated market, et cetera. So we feel that now that going forward, the interest rate scenario may soften a bit. And so therefore, our cost of funding will effectively come down. We have employed very borrowing mix of 54EC capital gain tax exemption bonds and ECB for the full external -- because where we get better rates than the domestic market rate. The domestic market is slightly elevated. We expect that going forward, this should also soften. So therefore, we believe that the reduced cost of funding will definitely give us better margins.
Anything on yield on advances, sir? Like do you see any improvement in that case?
Yield is currently at 9.98% We believe that the yield will remain like that because we are very conscious of the asset quality, and we are dealing with generally A-rated companies only. And therefore, we don't see much prospect and particularly because our push will be on renewable energy, where our rates are slightly lower as compared to the other segment. So yield may not arise, but we can improve upon our margins by reducing the cost of funds. So there will our efforts will go.
We'll take the next question from the caller, user 22. Since there is no response, we will move to [ Ashwani Agarwalla ].
Just a couple of questions here. When we say 1 crore households we are targeting 10,000 megawatts, so there will be a company -- to whom you will give loan and that company will install solar panels and all these 1 crore buildings or 1 crore households, right? Is that the thought process?
No, no, I'll tell you. There are multiple stakeholders in this entire rooftop solar scheme. It is up to the owner of the rooftop to decide. There will be multiple option available to him. There will be, say, for each of the rooftop owners, there will be 20, 30 vendors who'll be there who will be willing to provide the -- he has to select whichever vendor is available in this area who can provide better quality. And [ CPACs ] will also be there. [ CPACs ] will also be there as one of the vendors.
So it will be entirely up to the rooftop owner depending whether he wants to avail the subsidy or not. Because the state electricity regulatory commissions have allowed different tariffs. If a owner is availing subsidy, so they give net metering tariff about, say, to INR 2.5 to INR 3 per unit. But if one is not availing subsidy, they gave a net metering about INR 4.5.
So depending on this tariff structure, the owner will take a call whether he would like to avail the subsidy. And then he'll also take a call whether to avail this loan or pay from them. He'll also have the option, if he's not willing to put in his money, he can ask the [indiscernible] to put in -- install this solar rooftop. And they'll get some rental -- roof rental they'll get on that account and their bill will also get reduced.
So depending on that, what we are targeting? With regard to financing, we are not targeting the retail business. That will be done by the banks, et cetera. If some vendor has [indiscernible] like [ CPAC ], if they are aggregating the demand and they have to install, say, 1,000 roof or 5,000 roof, only those aggregated vendors will be able to finance.
Ashwani do you have any questions, please go ahead.
I have got 2 questions. So sir, what is the area required for installing 1 megawatt or 0.5 megawatt capacity?
No, we are not talking about 1 megawatt, 0.5 megawatt, actually. Rooftop solar starts at 1 kilowatt. For 2 kilowatt, about 100 square feet is sufficient, isn't it?
100 square feet of clean area or a flat area is required?
Exactly. Exactly. And for 1 megawatt capacity, we are talking in the ground mounted, about 3 to 4 acres would be required.
So now for targeting 10,000 megawatts, I think multiple -- quite a few lakh square feet of area would be required. Do you think it is really possible to gather so much unanimity in terms of decision-making where there are big societies or 20, 30 people living in a single society to come at a single point of thought process, okay, let's have a solar panel in our society. Let's invest some amount. Who will take care of the -- any problems which occurs in tariffs or something?
From my point of view, it's a far-fetched idea and getting 1 crore households doing the same -- doing this entire thing in one [indiscernible] itself, do we have the necessary infrastructure of [ CPAC ], vendor and everything at place in the metropolitan cities and other places that this can go in 1 single year?
Yes. You're rightly pointed out. It is a quite complex exercise. It's not that simple. It is not necessarily that in an area all -- every rooftop owner will agree to install rooftop solar. It is not likely to happen. And if some societies are there, then resident welfare association, RWAs will be able to claim subsidy.
So it is going to be a very complex exercise, and it requires a lot of IC activity, awareness campaign like MNRE has requested the state government to identify certain cities like Uttar Pradesh, they are identified 1 I see -- they have taken in a mission mode that they'll be installing 25,000 rooftop solar in the next 2 to 3 months. That is being taken as a pilot project, which has been done in Mission mode. Then all the state governments have been requested to identify the cities because initially, MNRE feels that this will be taken up in the cities, urban conglomeration.
So each of the state governments are identifying the city. And they'll be taking in a mission mode actually. So each city, we are targeting about 25,000 to 50,000 depending on the size of the city. That's how this aggregation will happen.
Now, sir, do you want to recalibrate that you will be able to finance 1 crore households or 10,000 megawatt of this solar panels in FY '25? Or do you still stick to that number?
Yes. Let me clarify that. Other than this residential building, there's another scope that is government department and commercial establishment. That is a segment, we are targeting. For that, there is no subsidy amount involved. So there CPACs are going to play a big role. Suppose state government of Uttar to populate their government building in, say, Lucknow, Kanpur. It will be given in one go. And the financing -- the [ CPACs ] will take it in a RESCO model. Similarly the commercial [indiscernible] We are not targeting a retail business. Retail business or financing opportunities that we are not at. There, our role is only that of coordinator. There, we are not looking for financing opportunities. That retail financing will be done by the banks and the small NBFCs.
And sir, when we are saying that we will disburse INR 150,000 crores next year, so roughly, we can say 20,000 megawatts will be financing next year. Is that the amount we are looking? Or is that the amount of project or the amount of power we are looking to finance next year?
No, INR 150,000 crores that we are targeting for disbursement, there we are not accounted for rooftop solar. Without rooftop solar is a INR 150,000 crores.
Without rooftop solar. I'm talking about renewable energy.
Renewable energy, as I mentioned, have we had signed MOU worth INR 286,000 crores in the month of July 2023. Out of this, INR 286,000 crores MOU, we have already sanctioned projects about INR 1 lakh crore. Another INR 50,000 crores, INR 60,000 crores will be sanctioned next 3 to 4 months. And entire sanction of INR 286,000 crores will happen in FY '25.
So once this -- and we are also taking up the state sector hydro project. Today, our Board has approved certain hydro projects, which are being implemented as a winner. So those renewable energy projects that we have sanctioned last year in FY '22, FY '23, and FY '24, their disbursements are going to ramp up because renewable energy projects have short gestation period. They seek disbursement within a period of 2 to 3 years, all the disbursement to happen. That's how we are targeting that major disbursement will come in FY '25 from the project, which we have already sanctioned in the last 2 years.
So what's the total sanction of hydel power at the state level?
[Foreign Language]
so hydel power -- I mean, not only hydel -- hydropower, sir but we are counting the entire renewable thing and which includes, of course, solar, wind hybrid, PSPs and of course, hydro also. So this year, we have done INR 125,000 crores until December. And we intend to do roughly INR 175,000 crores by end of this financial year, means another INR 50,000 crores will be sanctioned. Of this approximately INR 10,000 crores, INR 12,000 crores, is already sanctioned. So another INR 40,000 crores. So we have a good book of RE projects now available.
So I'm just trying to understand, so this INR 175,000 crores plus another [ 2 lakh ] INR 375,000 crores, this sanction will be disbursed in how many years?
So now this INR 175,000 crores has hydro, it has PSP. Now hydro project takes roughly 4 to 5 years to complete. PSP takes 2 to 3 years to complete. Solar will take 1 to 1.5 years to complete. Wind will take 1.5 to 2 years to complete. But the major portion of expenditure for these projects is likely to happen maybe in the next financial year out of what we have sanctioned this year.
Okay, we can assume [Foreign Language] disbursement comes in next year.
Yes, that's correct. [Foreign Language] at least 60 to 70.
Yes, 60, 70. What about the rest, which we have signed till 125, 150 right now and will complete to 215 by next year?
So as we speak, we have an order book of what we sanctioned not only this year, sir, but last year, last to last year. The project that we sanctioned, say 5 years back, the disbursements are going on those projects even now. So thermal project that we sanctioned today, we have a total 16,000 megawatt of thermal projects, which are undergoing construction.
So I'm just giving you an example. Likewise, we have some distribution scheme. Another big area is RDSS where we have sanctioned projects in this particular financial year and major disbursement will happen next year. So like there are many. I mean, similarly, transmission project also.
[Operator Instructions] We will take [ Tej Patel ].
Sir, since we knew that 40% of your outstanding order book is to DISCOMs, right? And -- so I know the numbers are improving and the financial [indiscernible] DISCOMs are improving. But I want to get an idea of what are your arrangements with these DISCOMs that makes you believe that the assets are safe? For example, your largest vendor, which is the Tamil Nadu DISCOM, right, which accounts for, I guess, 30% of your total outstanding borrowing, that's INR 40,000 crores losses, right? So I just wanted to kind of get an idea of what arrangements do you have with these DISCOMs that make this asset safe?
So for DISCOM, if you carefully examine that whatever lending we have done, it is on account of three things. One is CapEx -- major things. One is CapEx, some CapEx program of the DISCOM. Second is LPS, which has happened in last and this year. And third is RBPF also to a large extent. There are a few other things we are giving some other short-term advances, but those are not that significant.
Now CapEx are supported by the cash flow that the DISCOM gets through ARR. So there is absolutely no worry on that side. And entire funding of LPS as well as RBPF is secured by way of government guarantee. So we have not given this particular advance to any of the DISCOM without additional collateral of government guarantee. So wherever there is a government guarantee, I mean, we believe that there's a certainty of debt servicing, and therefore, we draw comfort out of that position.
So just to add to what our director projects have stated. You mentioned about TANGEDCO, yes, they did not revise their tariff for a very, very long time. But operationally, it's a very good project. Now I'm being the nominee director in that project -- in that the company Government of Tamil Nadu has undertaken to take over all their losses every year. So this year, they are taking over around INR 70,000 crores of losses from the company.
So this way, they are planning to -- and subsidies are all now coming on time. The tariff -- multiyear tariff revision has happened. Now they have automatic tariff increase every year. And then, of course, in true-up any increase or decrease subsidies, government department dues are all coming on time.
So the story of DISCOMs have changed significantly in the last 1 or 2 years after this RDSS scheme has come and the LPS scheme under which now all the DISCOMs are giving their subsidies on time. Tariff revisions are happening almost in 95% of the cases. So major improvement has taken place. Now with the smart metering that is going on around 95% of the collection will be sort of assured.
So we believe that going forward, the DISCOMs will turn viable very soon. They are, in fact, now also they are viable, most of them. But whatever the stress is there, that will also go away.
Next, we'll take [ N. Modi ].
Just I wanted to know by doing this work of implementing agency, do you get any fees or professional income something?
So we do get fees like in case of other programs that we handle as model agency, [indiscernible] and Saubhagya. We've got a very handsome fees that adequately covers all our expenses.
Right. Sir, other think you have entered into one MOU with RVNL that we have not announced, sir, that was quite big amount. RVNL has announced in their website.
In the RVNL is implementing major rail stock, rolling stock and other projects. We had strategically entered into MOU for an amount of INR 55,000 crores -- INR 35,000 crores to be implementable in the next 3 years that we are working out.
We will take a next question from Mr. [ Yash ].
My congratulations to you all. I just want one clarification when most of things have already discussed. When you see the quarter-on-quarter performance on headline looking softer, but if you take out the entire [indiscernible] much better, just one more clarification on your slide that you show that quarter-on-quarter, your asset quality has improved, in fact, compared to the last quarter also, then why this cost is there and what is your forecast looking like for next quarter on this particular line item?
I'm trying to also correlate that with the lots of accounts, there is -- in 9 months, there seems to be a reversal of [ INR 1151 crores ] not showing in the P&L.
Last quarter, we had reversed around INR 650 crores? INR 670 crores, that was during the pandemic period, we had made certain provisioning on standard asset. Now RBI mandates that we should create a minimum provision of 40 bps. Even today, as we speak, our provisioning is close to 70 -- 70.4 bps. So we are well above the RBI target. But last quarter, because the health of the distribution companies have improved the power sector, in general, was showing positive signs. So we thought we will reverse this provisioning of INR 670 crores, which was created during the pandemic and the pandemic being behind us. So that was the reason why we did it.
So it is not a standard [indiscernible] it was one-off reversal?
Yes, it is a one-off reversal which has created in a particular situation and now the situation having not been existing, so we reversed it.
Yes. And some clarifications. So like when you see the quarter-on-quarter the asset quality has improved then why there is a cost in this quarter and when you say that next quarter also, you are expecting some further resolution with the asset quality is further improving what is the tentative forecast for the next quarter, because this is the headline number which is impacting the performance and that is replacing...
Actually, for the current quarter, the regular ECL, which we have made on the fresh disbursements is INR 203 crores. And there is a reversion in respect of Nagai and OPG Power of INR 75 crores. And ECL on Meenakshi on account of resolution is INR 11 crores, and the favorable impact on achievement of COD in respect of the APGENCO and another 1 more project that is minus INR 83 crores. And that, accordingly, we have provided for INR 56 crores.
So virtually, there was a regular ECL on such disbursement of INR 203 crores, but the provision which we are required to make was only INR 56 crores because of the certain reversal which we made in respect of the assets, which were resolved.
What is your outlook for the next quarter on this particular line item?
Next quarter, some large asset -- I mean, in the current quarter, some large asset where our exposure is high and the expected recovery is also now we believe that it is going to be high. So it is expected to be, I think, on a much higher side than the Q3.
On the higher side, you are saying reversal or the provision?
Just reversal.
We will take the next question from Shweta Daptardar.
Just one clarification on the rooftop scheme. So in the rooftop solar scheme you mentioned that there is INR 30,000-odd crores opportunity. This is after knocking of subsidies, right? And if these are set up on the RESCO model, so we'll be financing largely the project developers. So is my understanding correct?
Yes, understanding is perfectly correct. We are after knocking out the subsidy this retail customer will be there who will be availing loan from the small bank, we are targeting only this aggregator, vendors, including CPAC, will be carrying out this rooftop solar on RESCO model. From that, we are expecting some business to come to the tune of INR 15,000 crores to INR 20,000 crores loan they might take.
Right. Understood, sir, one more clarification, sir, to one of the earlier questions. You mentioned that you are already complying with the RBI norms of single borrower exposure of 30%. But I believe that RBI sort of came up with these norms or highlighted perhaps to you 1 or 2 years ago. So there might be certain legacy assets, right, in your portfolio, which already might be exposed over 30,000. So is there a sort of a rundown there? Or if there are repayments happening. So how would those adjustments happen?
No. I mean, even taking into account the legacy outstanding dues, we are perfectly in compliance with the RBI norms of 30%. Of course, RBI allows government-guaranteed loans to be shifted to the government. So therefore, that much levy RBI provides for. And therefore, considering the government-guaranteed loans, we are perfectly in compliance with the RBI norms taking into account our -- all our outstanding.
We'll take the last question from Anand. Please go ahead. Sorry, Anand, I think his line has dropped. So we can take one last question from [ Rahul ]. Please go ahead.
Actually, I wanted to know your stance on the roof to solar program. So basically, is our stance aggressive? And also could you kindly provide me with an approximate tenure for the completion of this program?
For the current calendar year to December 2024, target being here is 1 crore household. And up to March 2026, we had to install capacity -- the indicated capacity of at 40 gigawatt, that is 40,000 megawatt capacity has to be installed by the end of March 2026. Here, there are two components. One is residential household plus government building, commercial establishments, all encompassing, it will be 40 gigawatt capacity by the year 2026. But for the current year, mainly it is being targeted to cover 1 crore rooftops.
Right, sir. So is that stance aggressive on that part?
So MNRE has made calculation based on the feedback received from the state because this exercise has been going on for last 2 months, actually, to be frank with you. MNRE has been in touch with the state government. They had taken the concern or distribution company. They had certain issues particularly to net metering, et cetera. So they are addressing the concerns of distribution companies.
Now DISCOMs are on board for this rooftop solar and MNRE had asked the state governments to identify the focused cities. So each of the states have identified 4, 5 cities in the order of priority and each city, they have taken minimum 25,000 rooftop solar. For example, I told you Varanasi, Madhya Pradesh has identified, Indore, Bhopal, Ujjain. Similarly, all the states identified their priority cities, where medium target that they are looking for in the urban conglomerate is minimum 25,000 rooftop solar. So we hope that based on a realistic assessment made by MNRE this target of 1 crore household has been given.
With that, we conclude the Q&A session. So I would like to thank the entire management team of REC Limited for taking time out and patiently answering all the questions. Thank you, sir, and have a good day.
[indiscernible] and analyst for your patience and for very profound questions, and we are enlightened and we hope that we'll be bringing you better results in Q4. And as we committed to you, FY '25 is going to be better than FY '24. Thank you so much.
Thank you, sir. Thank you very much.