Suzlon Energy Ltd
NSE:SUZLON
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Suzlon Energy Ltd
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Ladies and gentlemen, good day, and welcome to Suzlon Energy Limited Q4 FY '24 Earnings Conference Call hosted by ICICI Securities. During this call, the company management may make certain statements which reflect that outlook for the future or which could be constituted as forward-looking statements. These statements are based on management's current expectations and are associated with uncertainties and risks as fully detailed in our annual report, which may cause the actual results to differ. Hence, these statements must be reviewed in conjunction with the risk that the company faces.
As a reminder, all participant lines will be in the listen-only mode [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir.
Thanks, [ Sima ], good evening. On behalf of ICICI Securities Limited, I would like to welcome you all for the Q4 FY '24 and FY '24 Earnings Conference Call of Suzlon Energy Limited.
From the management we have with us Mr. J.P. Chalasani, Group CEO; Mr. Himanshu Mody, Group CFO. We'll begin with the opening remarks followed by a Q&A session. [Operator Instructions] Over to you, sir.
Thank you, Mohit. Good evening to each one of you. Thank you for joining us on our Q4 FY '24 earnings call. I hope you had an opportunity to review our results and investor presentation. We will now share with you an overview of the industry and we will walk you through our Q4 FY '24 and full year performance. We will then take your questions.
FY '24 has been a remarkable year with standard performance across financial and operational parameters. Largest our order book of 3.3 gigawatts, with a strong pipeline provides long with a strong revenue visibility. This includes order book of 2.9 gigawatts 31st March '24, [indiscernible] in 2-megawatt of order announced in the [indiscernible]. This is a well diversified and healthy of order book. Our endeavor will remain to pursue quality orders with a higher value and better margins.
[Audio Gap] having the sector in the wind installation also saw a consumption of the year second pass. [indiscernible] installations for India wind installation also saw a quantum term of the year second half, [indiscernible] installations for India for FY '24, improved the [ ceiling ] to [indiscernible] 3.3 gigawatt insulation, the highest post [indiscernible]. Globally India ramping total in installations with 46 gigawatt of installed onshore wind as of March 24.
In this [indiscernible] installation [indiscernible] more than 75% year-on-year growth to [ 88-megawatt ] for the year of FY '24. In the current scenario, will place the crucial role in energy transition and growth of Indian renewable depends upon the mutilation. That's because the industry has seen the transition from hybrid to around the clock and they have more to [indiscernible] and dispatched [indiscernible]. [ FDIs ], whether it is for the peak or the loading tenders to solidifying wind [ position ] India energy condition. These kinds of tenders require very high share of [ bind ] to meet the foundation profile. Our [ vendors ] business continues to do well with over 14.7 gigawatt capacity in India.
On [indiscernible] performance has also been increasing and continuing to grow and continued growth of the in sector will further more [ esports ] business as the major revenue comes from supplier in components. With strong fundamentals in 29 years of strong backed [indiscernible], we firmly believe Suzlon is now well positioned and leverage the market opportunity [indiscernible].
With this, I now ask Himanshu to take us through the financial performance.
Thank you, J.P. sir, and good evening, ladies and gentlemen. I will be using Slide #16 to 23 of our investor presentation which has now been alluded on our website, www. suzlon.com. As a reference point for my discussion during this presentation.
FY '24 has seen us registered robust improvement in all our key parameters and our fundamentals have strengthened with a focus on the bottom line. We have made deliveries of 710 megawatts, which is 7% higher as compared to FY '23, despite which an EBITDA growth of 24% as compared to last year has been registered and a PAT before exceptional item has grown by 428% as compared to FY '23. All of this is a result of several initiatives that have been taken the company over the last -- in the last financial year, which include margin improvements, cost optimization and lower interest costs as a result of repayment of the entire debt.
Similarly, on Q4 FY '24 performance, the [ PAT ] before exceptional items has seen a Y-o-Y -- staggering Y-o-Y growth of 413% from INR 68 crores in FY '23 to INR [ 281 crores ] in FY '24. On the P&L account, renewed focus on the bottom line resulted in a revenue of INR 6,497 crores with a contribution margin of 36%. EBITDA and PAT before exceptional items have been highest that the company has ever reported in the last 7 financial years.
Consolidated EBITDA has been reported at INR 1,029 crores with PAT before exceptional items at INR 714 crores for FY '24. We are pleased to report our balance sheet as of March 24, demonstrates a very strong position of strength with a consolidated net worth of INR 3,920 crores whereas the net cash position of the company as of March 24 stands at INR 1,148 crores.
I would like to summarize that the last 1 year for the company has been a year of financial turnaround. I would also like to reiterate that Suzlon has never been in such a strong for footing as it is today. With a fortified financial position and optimized cost structure, the largest ever order book with a strong pipeline in discussion, a completely geared up supply chain to meet the order book demand regaining confidence of all our stakeholders and a strong management team with an enthusiastic team to deliver on all the performance parameters.
With that, I'd like to conclude my presentation, and we can open the floor for Q&A that the callers may have. Thank you.
Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue [ resembles ]. Thank you.
We take the first question from the line of Sumit Kishore from Axis Capital.
The first one is, could you [ sell ] out the contribution margin in FY '24 for [ WPT ] and the fixed expenses the [ WBG ] business for FY '24?
The contribution margin, Sumit, for FY '24 in the [ WTG ] division is about 19.5% whereas the fixed expenses, as we've been saying earlier, close to about INR 600 crores. So our breakeven point as we've been advising in all our earlier meetings and calls remains pretty much unchanged.
19.5% is a brilliant performance. So is this sort of a sustainable level? Or because we have spoken about maybe 16%, 17% levels earlier.
So Sumit, there are 2 or 3 factors that we need to keep in mind as we enter this financial year. Number one, we are seeing some early hardening of commodity rises like aluminum, copper, there are certain logistical challenges given the ropes and regs. So there might be some slight increases in costs. Also, we are -- as we deliver in FY '25, we are now moving to a completely [ S 144 ] model, as you guys are aware.
So for FY '25, because even our suppliers have built up capacity recently there will be certain cost compulsions and therefore, the COGS will be under pressure for us. Having said that, we, of course, continue to maintain mid-teens guidance and the management endeavor would be to deliver an optimized contribution margin. But very difficult to comment whether the 19.5% is sustainable or not. But we should be there and thereabouts in the 15% to 20% region.
Right. Given your net cash at the end of fourth quarter at INR 11.5 billion, what should be [ read ] due to the interest expense being higher than the other income?
So the interest expense, specifically in Q4, as you know, in late December, we announced financial working capital tie-up with REC Limited. And as a result of the tie-up, there was a onetime processing fee that was paid to REC in early January. So to the tune of about INR 11 crores, a onetime processing fee for the working capital tie-up has been booked as expense in this quarter. And of course, in addition to that, a lot of LCs and bank guarantees have been issued to our customers and vendors, which has resulted in increase in the interest cost as compared to Q3.
Got it. Last question, for your DTC order book, could you speak about how many footprints for installing [ winter bind ] would you have in control where land and evacuation are in place? And maybe on similar lines for your [ non-EPC ] orderbook?
Yes. See, our EPC is currently in the current order book, it is [ 1/3 ] and [indiscernible], [ 15 PC ] and [indiscernible]. On the [ EPC ] portion evacuation in the sense we create connectivity, we don't control because that's in the scope of the client. As far as the lag is concerned, obviously, it's a critical area even last year, one of the reasons why the country could [ sell ] to [ 13.5 ] gigawatts is the land challenges.
I'm not going to say it's going to be easy, but what we have done in the last year, we expect that to be in the H1, it will be a little more easy and then we'll continue to work towards that. And also, as we mentioned earlier, which may not immediately helped. But on the development at what we're taking into other states, which was what we are preparing for towards the end of this year as well as next year that maybe want to or remove the land issue as far as our EPC projects are concerned.
And in the non-EPC portion, we keep track of what's happening there on a continuous basis. Land would [indiscernible] the fact that the living sector land would continue to be challenged, and it's a question [indiscernible] manage from time to time. So with the challenges is what we will deliver.
Thank you, and wish you all the best.
The next question is from the line of [ Bart Jan ] from [ Nivesh ] Investment Advisory.
Congrats on a good set of numbers. Sir, can you give us a broad idea on expected wind installations for FY '25? And what kind of market share can we expect out of that is loan would be holding?
If you guys was [indiscernible]. Our expectation -- if you remember in FY '24, we have always been saying anywhere between [ 3.5 ] [indiscernible] gigawatts. Our expectation for FY '25 is it could be anywhere up to 5 gigawatts between 4.5 to 5 gigawatts. And normally, like our always came was that market share is different there than what we expect to do. But we've been always in the range of 25% to 30% in the market. So if we look at this year, our market share has 99%. So we would [indiscernible]
Okay. Sir, thank you so much.
We move to the next question, please.
Sure, sir. Next question is from the line of [ Mr. Rohit Kumar ] from Motilal Oswal. Sir Rohit your line is in the talk mode, please go ahead with your question. Mr. Rohit your line is in the talk mode, please go ahead with your question. As there is no response from the current question in line, we move on to the next question.
The next question is from the line of Subhadip Mitra from [ Nirvana ].
So while you have given us a sense of the market share, I just wanted to understand that from an all inflow perspective, assuming that you are maintaining the 25%, 30% market share, where do you see the market size going? Because our understanding is that there is probably a [ 10 ] gigawatt of -- just your wind projects, including FDR, [ RPC ], et cetera, which would have probably got bidded out in FY '24. So hopefully, all of those we'll probably start seeing ordering in the [indiscernible].
And then there is also on top of that, a large C&I market. So if I have to, let's say, look at the overall TAM for, let's say, the next 2 to 3 years? How would you look at it?
Maybe engine for the business is the orders and the projects which will actually drive how much [indiscernible]. And the second thing, as I mentioned in my opening comments, currently because most of the bids are as our [ FTC ], our FTI bids. How much wind capacity started would decide how much is [ RE ] capacity going to get added in the country. That's the first thing.
Yes, you're right. Even if you look at even the current year in the first 4 months, there's almost about 10 gigawatts of big awarding, I think [ 11.28 ] gigawatts. Everything is [ RTC ] or [ hybrid FDR ], which has an involvement of our cancellation is both more than [ 80 ] gigawatts of that would be the green company, not about 11 gigawatts, but installed capacity, I'm [indiscernible] you can match the [indiscernible]. And there is another 5 gigawatts where the [indiscernible] are submitted and reverse option has to happen.
Another the [indiscernible] given where bits are announced. There is a huge amount of pipeline, 27 gigawatts what we talk today and [ CN ] market. And as you know that our share in [ earmark ] is even the current order book is more than 50%, 56% or so. Others would not be a concern. As a country, how much we're going to do each of the year because market share for me [indiscernible] because how much are we prepared in what we should do, but market share might be very high continuous smart capacity and our market share will be between 2025 and [ 30 ] continues to like capacity.
Expectation this year will start the -- there are figures being talked today in the beginning of the year, anywhere between 5 and 7 gigawatts. Different people are talking different numbers, even 7 gigawatt memories out there. But our expectation is that we feel that looking at underground constraints at the beginning of the year, obviously, we will keep everyone [indiscernible] quarter-to-quarter basis would be about 5 [indiscernible] year.
Having said that, now the government has come in, and in fact, the even some started working towards land issues and narrow basis to the result. So they're saying that now we will get in because they are also realizing now unless being more are will not move. With that, we expect that this 5 [indiscernible] 6 [indiscernible] , whatever it happened this year would reach about 7 to 8 gigawatts next year and '26. And we should reasonably assume that 9 to 10 gigawatts is what we should reach and in FY '27. That's our fee.
Understood. So these numbers that you're talking about are in terms of actual execution or installation of capacity, correct?
Commission capacity on the ground.
Additional capacity on the cloud, right? So if I were to look at the numbers that you just said that by FY '27, we may look at a 9 to 10 gigawatt kind of installation on ground and that means that the ordering for that 9 to 10 gigawatt will probably happen in the current fiscal and FY '25 right?
Is good to assume that it will also move to next year, but yes.
Understood. And sir, this 9 to 10 gigawatt number that you're mentioning would be primarily the auction-based capacity. So the C&I [indiscernible] will be on top of this.
No, no. I'm talking about our capacity as a country to commission how much we're going to commission. [indiscernible] are the utility PPA-based one. I'm talking about as a country, how much mental get [indiscernible]. I'm not bifurcating between the two.
I understand.
The next question is from the line of [ Manoj ] from [indiscernible] Consulting Private Limited.
Congratulations on the good set of numbers. It's really good to see the numbers when you feed from now 1,100 negative to the cash flow [indiscernible] really down to great set of numbers [indiscernible].
I just have one -- just one question, sir. So currently, we see the order book, we have around 3.3 gigawatts. So then now we are expecting to deliver the 3.3 [ per watts ].
So the currently, as we at spoke before this is the orders are now beginning the longer term. The lease of 3.3 currently what we have meant for FY '25 and FY '26. On paper today, what is happening today, we also need to realize is that when a contract gets awarded, they get awarded for a particular year. But then things are moving because the connectivity, getting delays or something else [indiscernible] that clients are more in the schedule. So before there is a grower in order versus actual schedule in the order versus [indiscernible] what is happening. Therefore, that you will also see this order book keeps increasing in the future. That's what month [indiscernible] which were the discussion [indiscernible].
These will be for normally currently what we have is for FY '25 and FY '26. But having said that, some more orders might come for FY '25 as well even this year and orders which will come in again would be [indiscernible] '27. Because this is -- it's just a constantly moving scenario. And what we are also doing is looking at the uncertainty of the projects we are actually saying that, okay, we will build a buffer of 15% to 20% additional order intake for each of the capacity.
Just wanted to understand how much [indiscernible]
Last year, we could have done more. It was purely because the reason was that some of the clients have moved the deliveries from last year to this year because of the connectivity in the [indiscernible] our base transmission line, which connects from the substation to the things are getting delayed. So therefore, we are paying this on the ground. We -- I think we're still, as a sector struggling to move up the numbers. While we have a 45% got moving from 2.2 gigawatts and 3.2 gigawatt a year, which is a good movement compared to the 25% between FY '22 and FY '23.
Some 25% growth rate to be moved to 40% growth rate. And in fact, we moved from 10% in FY 2022 to 75%. We are all moving forward. I think there's still work in progress.
I got it, sir. Totally understand. Yes, just one more question. Regarding the challenges we have in the underground to face what are the company's vision, how are we going to face those challenges in the upcoming years.
Can you just repeat because there's some.
Sorry to interrupt. [ Mr. Manoj ], are you connected on your phone, sir, I would require to please reach to your handset.
Is my word clear now?
Yes, yes.
Okay. So what are the challenges? We have down the line so as to understand about how the organization is going to face that in the upcoming year.
See, when you use challenges will always remain. The only thing is what we foresee and what you get prepared. Our biggest challenge was the debt which we saw in this year. Second biggest challenge was working capital loan availability. So we saw that issue working up in on availability now. We are starting the year with a -- we never started a year with such of so many order book. So we resolve that in of order book. Above all, what is important is organization capability to deliver. So last year, we spend significant amount of time of [indiscernible] the organization at the leadership level. So whatever we could do we do it, but the challenge is on the ground. What is going to happen with connectivity and land and the clients would continue to be there. Those things as and when come, we need to prepare as an organization to respond and then see how [indiscernible] can mitigate on this.
But internally, whatever we could envisage in fact in FY '24 was our year of consolidation is creating a launchpad for the future, but we have done it. But having said that, will we not replace [indiscernible], we will need to [indiscernible] sales in [indiscernible]. And another important thing is that we also ramp up was important for us was [indiscernible] launched. So we smoothly amped up and in [indiscernible] out there supplied more than 100 megawatts. And the capacity commission, they're allocating well.
So therefore, that initial last year is we had that new turbine coming, new model coming in ramp-up and how will it behave when it concerned. Those things are also [indiscernible] for us [indiscernible].
The next question is from the line of [ Ketan Jain ] from [ Avendus Park ].
Yes, Sir, what is your guidance on deliveries in FY '25?
Okay. Then obviously, we cannot provide any guidance, and we have followed that practice earlier and we continue to follow that as said earlier, we believe that in FY '25, installations on the ground will be around 5 gigawatts. And Suzlon market share historically has been what it is. That's for you to see. Will we be able to continue with our market share, send them in, lose it, that is something I think believe we should lose the investor to source as you [indiscernible], that's the only guidance we can provide.
Understand. Also, my next question is what can the margin difference in [ MP ] order and non-EPC orders?
Again, we don't provide yet the [indiscernible] of the margin difference between EPC and non-EPC orders, we're on giving further consolidated WTG division, as I said earlier on the call.
Okay. And any improvement we can expect in the margin? I think currently [indiscernible].
So again, we maintained always that on the margin will continue around this [indiscernible] the few basis points here and there. But I don't think improvement in O&M margins should be expected. We've always maintained that O&M for the next few years, I would say, 1 or 2 years would be secure growth on the top line because the nature of the business is such that there is a 3-year, 3 [indiscernible]. So by the time the revenue really takes off is when sizable fleets only come into billings. If we take another year or 2 for the whole historical history to catch up.
So I don't think any margin improvement or significant top line improvement on O&M should we expect.
My last question is, sir, what is the utilization factor we can expect in the 5-megawatt [indiscernible]? And all the other lower cases, like how different is it?
If you don't have a 5-megawatt [indiscernible].
Sorry, the 3 megawatts.
So the current order book, we've significantly portion as you recover in the investor presentation, 3-megawatt order book is 83% share.
I mean in the winter and client utilization.
But that would vary from side to side. So it's [indiscernible] wind is very specific to the site. But basically, what we do is that when we offer for the same site, we offer 3 megawatts or 2 megawatt which is a good option to them for both. And on cost, a kilowatt hours remain the same for both. Because 2 megawatt, if cost out is done [indiscernible] explaining earlier, 3 megawatts is being the first year of operations, the cost would be little higher even for us and for lenders. But it's 2 megawatts is done for quite some time and more are amortized.
So regards to the cost per kilo whatever, I'm not talking about [indiscernible] costs with lower tower today 2 megawatts and 3 megawatts of say particular site.
Understood. Sorry, if I can give you one last question. Sir, is there any challenges in transmission capacity creation in India? And if [indiscernible] still which area of it?
Challenges transmission capacity, not capacity, but common time would always remain as the issue because otherwise, today, the transmission or planning is significantly good compared to let's say, my [indiscernible] of 2 to 3 [indiscernible], the amount of planning were done on the CPU grades. The challenge is what we are seeing is that time line shapes like by 3 months or 6 months, sometimes moving that line in terms of [indiscernible] when that [indiscernible].
And the second challenge, what we are seeing, which we've now given the feedback to [indiscernible] solar and the solar, the moment to be a [ CTU ] is announced is easy for solar to go and book the capacity. We always need 1.5 to 2 years of a wind data by particular place. So therefore, by the time being potentially established, the CTU capacity is booked for solar. So therefore, how do we saw this issue. So there are 2 things which are now being discussed. [indiscernible] agreed is to see that we can create a capacity -- a bit capacity in exclusive the wind zones and given results for wind capacity.
And second, we are also now looking at the probability of wherever the solar is installed in subscriptions toolings of solar. Is there a way that we can pick out the wind capacity there because our mission exists, then we don't need to increase the action capacity, but adding capacity in the places payers already best depending upon land being able there to binding of the potential, but there could be some unlocking of that as giving capacity for wheat.
Understood. Thank you.
[Operator Instructions] Next question is from the line of [ Ravi Vadagaand ] an Individual Investor.
Yes. Good evening and congratulations on a remarkable year. The first question is, just want to understand our manufacturing paradigm, right, say, our H1 44 model is for a Client A and Client B, will they be different? I mean, are these engineered to order, configure to order, make to order, what kind of a paradigm of this?
And the second question is I mean, so what is the path? Now we are at around 270 megawatts, right? 170 was last quarter, 270 is now. What are the paths to say 750 because that's when our new order intake and your ability to insecure [indiscernible] start matching and I mean, time the order book looks good because our rate of indication is lower than that. So we keep on believing. So if you can just give a little bit of color in terms of what is -- what would be the core constraint to move from the present run rate to say -- I'm just putting a 750 megawatts just to have some note sir.
Yes. On the first point, the each model is specific design and each manufacturer is more of a specific design. But thereafter, that the buying remains constant respect of good site in India and installing as long as in India, okay? If this [indiscernible] to be in for somewhere else in a different wind regime, there could be some rising to be [indiscernible]. Much of our India is we bought a 3-megawatt model, it is the same 3-megawatt for plan [indiscernible]. It won't change. [indiscernible] any modifications [indiscernible]? That's the question number one.
Question number 2 is that, as I mentioned earlier, the main engine for supply is orders to be there. And secondly is the project reship because projects is what we see you how much of that will happen. [indiscernible] is not a constraint, especially now with our working capital and orders were available. The -- how much can we deliver? Is it 750, is it 500, is it 300, it all depends upon the readiness of the projects. And what we are expecting is that we gradually won't happen immediately. We expect that in a couple of quarters, that would improve. It might not happen immediately, but [indiscernible] outtake of projects put in to orders is not an issue, but offtake of the ages will improve. I don't want to put a number to it, but I can only say it will change in the next few quarters to come.
Okay. So I mean just a little follow-up on that. The [indiscernible] -- I mean, good that it will change. The constraints which are in [indiscernible], right? I'm assuming manufacturing capacity would not be a constraint. So -- but in last quarter call and in the past, you mentioned the whole EPC capacity could be constrained. So what is our per view, which is something which you guys are looking at in terms of improving so that when -- as and when the things happen, we are ready.
Yes. First of all, if you look at current order book, 1/3 is EPC and 2/3 is none EPC. In case of non-EPC project progress, we can't completely control maybe or [indiscernible] bank supply and direction or just the top bank supply and supervision. So we will not over control on whether their land is available, the [indiscernible], the fabric system is not done, the translation system is not done. We have no control, except we keep tracking because that has an impact on our delivery.
We can definitely work on EPC where we have the full control. There you find is absolutely funny. And in fact, right now, our strategy is that because we are seeing these challenges outside we should actually try to improve our EPC move more towards EPC so that we can control the uncontrollable. Even today, obviously, having said that, even we have taken some concerns in terms of EPC because advanced action on the line was not taken in the areas because of various reasons what we've done. The difference what we are doing right now, which impact won't come in this year fully, maybe in the last quarter and the next year onwards will come. If we are going for what is called a development contract first with the clients.
So a client says that totally, I want to develop 500, 700, 500 megawatts in this particular area. We say that total expand is on the commercial I will first issue -- I'll issue everything, but I'll give you an NPV for the development. So and what we have done for to help that is that we have gone ahead in [indiscernible], and we are now trying to invest at other states. We have our rights exclusive rights to developing projects more in geographical area. And by this time, we have about 2.7, 2.8 gigawatts in [ AP ], we have more than 3 [ growers ]. We have a rights develop and once we have the clients who are saying that okay, I want to sit up here, we go and start acquiring the land in advance. And we don't get our working capital gets stuck in the land because they are giving it other.
And then for them also projects [indiscernible] will go away because that is being done here. That model is what we are working on, but that's more a significant impact you will see in FY '26 and FY '27 -- FY '26 onwards, and subsequently maybe a single year. That's what we're working on right now and which is very, very important, we see because the concrete capacity addition, I'm not saying it were, capacity addition will significantly depend upon how much we do.
In -- when you say FY '17 was the highest we did last time. After that, we did the highest now. FY '17 was our highest. And now this year is after that, we are the highest [indiscernible]. So therefore, when we achieve that and sector also moves up. So we understand that. And being the leader, we need to shape that how much capacity can get added. So these are some of the steps that we're doing today. And but you will see that impact of that maybe in the last quarter but significantly in FY '26 onwards.
We appreciate the intent for us. Thank you.
Thank you. We take the next question from the line of [ Mr. Marley ] an Individual Investor.
[indiscernible]
Not very clear, please. Your voice is not very clear.
Is there any plan to increase holding at this point?
Amount of holding it plans as.
Company management, we cannot comment on the same. It is something that the promoters and the family has to decide. But as management, we can don't really comment on the one.
So I mean the second question [indiscernible]. So it does not understand you're also talking about [indiscernible] it is one of the right [indiscernible]. [indiscernible].
We are really struggling to hear you. So I really cannot understand your question.
[ Marley ] sir. I would request you to please switch to your handset if you are on our speak or your phone.
No, that's why you ask the question again. So plan -- are you able to hear me now?
Yes, yes, clear.
So as part of the merger plan, which you can talk, which is in the proposal at this point, right? So one can be one point which you mentioned in the proposal is like [indiscernible] one of criteria to participate in the [ PSD ] bids. So are we also planning to participate going forward or individual contract or [indiscernible]? Or is it like even for the executor or a vendor, we need to have certain conditions. How is it?
This is what we are talking right now is participation in the supply of the projects for the PSUs, not for [indiscernible], not for as an investor in the project. Like activity does of use capacity. Earlier, we were not getting qualified because of our network issues and this merger would help. And in fact, even today, as we speak as well that be something we will get qualified, and we started actually bidding for [indiscernible] .
Okay. Sir, just one last question from my side. Because in the previous question you have answered that by FY '27, [indiscernible] gigawatts of capacity to be commissioned the ground, right? But we are also talking about having just [indiscernible] gigawatts commissioned by [indiscernible] 30. So is it possible considering we just have 40 at this point and just looking at 10 gigawatts [indiscernible] after 3 years or so. So in the last 3 years, are they going to execute a large number of orders or how is it at this point? Because it doesn't match up with what we are talking because we are talking about the 10 gigawatts [indiscernible] some years now year-on-year execution of 10 gigawatts but it has still not happened, and we are still targeting on the in all the PPPs or what are the data points we are talking, we are still targeting our own undercover. So how it is planned at this point? If you can provide some details around it will [indiscernible].
At the macro level, the Government of India and the [indiscernible] said that to meet the demand of 2030 of the lease cost option needs 100 gigawatts of winter banks. Before other country, we are targeting to reach 100 gigawatts of installed capacity by 2030. That's a target which country is working towards.
Okay. Okay. On a reality, do you think it is possible for considering the current reality on the current?
See, the question you suppose, let's say that we reached about 9 to 10 by '27, FY '27, FY '28, FY '29, FY '30, will can give you anywhere between 35 to 40 gigawatts right? Then we have FY '25 and FY '26. We will not completely [indiscernible] comes in, but it's not something which is not reachable. So let's assume that this year and next year, we do about [ 100 ] gigawatts, under 40 gigawatts [indiscernible] 46 plus 50 close to that number.
That's it from my side. Thanks a lot.
We take the next question from the line of [ Avishek Datta ] from [ Anandrathi Share & Stock ].
I just wanted to know right now that we are network-positive -- what are our plans to enter aggressively for the PSU projects?
We've already did, [indiscernible]. So hosting called an aggressive base was we never got any [indiscernible] and aggressive. As I mentioned in my opening comments, we are looking at getting the orders with -- we can add value to our bottom line. So therefore, we will continue to look. It is a respect of the sector here. Public sectors was not an [indiscernible] because of our network issues, but now as I move ahead as that is an area which we believe participate.
And in fact, we have also been getting requests from large public [indiscernible] that have to invest to participate as well because otherwise, this growth is getting. I only correct the [indiscernible], but we are not participating.
And secondly, sir, can you just elaborate on this co-development of projects for the land to circumvent the land we make concern?
It's nothing but in [indiscernible] way and the land development happen much than actual posit schedule, okay? This was a model which Suzlon was known earlier years where we used to have the land, we so connected when it was an SDU model before [indiscernible].
And therefore, we, in fact, those years, we used to get the orders in the same year, complete the [indiscernible] and deliver [indiscernible]. That situation change now when we came in the centered [ CPU ]. And we also not spending so much money on the land. What we are now trying to do even it's a concern, not the sort of given a concern for the investors because projects are getting not being there, the [ EPC ] [indiscernible] from us. Therefore, there are a large number of the investors on our long-term plans are saying that can we work in a manner that we will decide with the execution of [indiscernible] much in advance an order will be placed.
Let me start with the [ NTP ] for the development first. So that we can acquire the land, keep the credit land in the sense when we talk about land, land in the past [indiscernible] it is ready and then projects can be move much faster. Even it's good for them because their IDC gets saved and the also everybody uncertain it will come down. That's a model which is a win-wins [indiscernible] them. We are entering that by actually having these exclusive rights in some of the states.
And you mentioned about you have access [indiscernible] of 2.7 gigawatts and [indiscernible].
Yes. There we have an authorization from the government in the [ Milish ] development area, you have an exclusive rights to develop in projects, nobody else can do.
And when you say land transitions or that is.
Because they are not giving us anything. [indiscernible] us because looking at the possibility that during -- we are setting up manufacturing, we have a manufacturing facility in these states, and those are getting revived. So there is an employment there. the project as there's an employment. And second thing is we [indiscernible] single project we do the service business for [ 24 ] years of the project. So there is an employment potential when you got there. So therefore, that is what they're looking at and they're trying to give the excuse rights. It's [indiscernible] right.
And when you say land, does it also come with preplanned exaction facility?
We are actually looking to say, obviously, when you ask for a rights or a geographical area, then we need to define a area. Obviously, we do that based on historical land and win rate, what we have otherwise why we can't go [indiscernible] what is on the deal. And second is based on the plan of CPUs, which the [indiscernible] what [indiscernible] announced and on the pipeline turnarounds that is the basis, it's done based on that.
Okay. And so can you just elaborate once more on the like transmission access that the solar project because they are commission faster, they have faster access to the grid, whereas for when do you need 1.5 years of data to get access. So what is government thinking about that?
See, the once, let's say, substation is announced in a location [indiscernible] or doesn't need to think much they can say that we ask for the connectivity because solar can be set up in most parts of the country, now that it doesn't need to be site-specific whereas for [indiscernible] to set up in the area, we have to have a wind data, whether the site is [indiscernible] or not.
So by the time you have the data, that's for -- so therefore, there is an issue becoming. But by the time we say that this particular area has a good wind potential, whatever the CTOs are there in the year they are getting filled up the past. So now the government has asked us to say as the players to say that where is the highest wind potential site we will plan the there, and we're also thinking of indicating in these areas, we would basically try to restrict the connectivity [indiscernible]. That is indeed a in the work in progress with governments.
And the second one, what I said is that wherever the solar is already selected to the emission today areas are going to open up under the same substation because substation in the transitioning capacity is already there. They are thinking of to get a discussion between the parties and the M&A, even in the latest meeting of seed. They are open to the idea of coming up to deal connected to those substations, maybe everybody wants to come and set up a wind capacity here because we don't need all of grid that we don't to on a substation.
How much of it is visible? There not be every [indiscernible] to be sensible because last [indiscernible], but we should unlock the transmission capacity for wind.
Okay. And sir, secondly, on the time lines, like we have 2/3 non projects and 1/3 is EPC. What kind of execution time lines you are looking for in both of them?
We don't refer any date. Basically, we look at what is on the table and what is going be taking if there is more demand for EPC will take more. In the case of EPC, the timeline and defense because it also includes the land in [ BC ]. In case of good supplies, we can do it in a short time period and [indiscernible]. But the time periods will match with respect to the project execution schedule.
As [ RPC ] that they will say that my positive is going to get ready by this time, which is how I want the supply. Then obviously, we look at our manufacturing timelines, what we committed to various people then we said this is how we can supply, then there's a match meeting happens, and we find as a contract estate. In case of EPC, obviously because we know how this positive is going to shape up.
In terms of the land and BOP because which we control weekly the schedule, and this is how we can turn on this product and there are discussions that happen [indiscernible] are longer than the [indiscernible].
For these EPC projects, we will first like to tend to be in the state of where you have already got this.
[indiscernible]
Okay. So thank you so much sir.
[Operator Instructions] The next question is from the line of [ Rajesh ] an Individual investor.
Yes, can you hear me?
Yes, sir.
So just -- yes, thank you for the [indiscernible] and also, I think the results for Q4 are quite good compared to previous years. So congratulations to that. Yes. So just a couple of questions. One is how about the offshore wind projects. So is it coming in on how you some perspective on that part compared to the regular wind projects that you already get in? And that will be the first part.
And the second question will be on the green hydrogen machine, how that is going on for the green hydrogen, how you see on the future part, how it is getting implanted from your end. Yes, these are the questions.
On offshore, the government of India is working towards developing offshore projects. But as I said earlier, that there are challenges in respect the starting for offshore in India because our generation difference between onshore offshore is not significant, [indiscernible] that high but the cost goes up. So therefore, the cost of [indiscernible] seem to get into an offshore. The government of India announced the cost [ 100 ] megawatts, they will do this [ BGF ] between [ Tamiladand Gujarat ]. And they are also now come up with complete for the offshore, we see better allocation where bidders was our wins can go and do the exploration in severe physical and then where is the project.
But there at this stage, we ever to see what the policy is that they don't give a deal. They will only give you the right to do of the project. And thereafter, they will also provide a [indiscernible] on the ground, and thereafter, wherever you want to take the power to using the center grid and where you want to sell at what you want to sell to you.
Offshore would happen at some point of time, but I don't think it's going to be a significant [indiscernible ] immediately because any offshore project even today to start to won't be not for the next 5 to 6 years before we execute the product. Yes, that I'm not sure of the second question.
[indiscernible]
Our expectation is that as we started today, the [indiscernible] segment is significantly increasing to change their capital department to green credibility. That would continue for the next 2 to 3 years. Our expectation is with green hydrogen demand for endeavor would pick up in the next not immediately on there are projects being announced, but early to take up on the grown financial [indiscernible] not in the next 2 to 3 years.
So by the time the current demand which is a captive requirement for the existing industry, it starts seeing downward trend is where we expect that hydrogen would pick up. Actually, our rescan demand will continue to be there for the next 5, [ 6 ] years.
So you -- so just one add a question on the same thing. So do you feel that you have enough capacity, I suppose that in hydrogen comes in or kicking the project fixing because I think that is going to be a huge change [indiscernible]. Yes, thoughts -- give some thoughts on that.
Yes. Green hydrogen is as far as we are concerned, we will only supply the [indiscernible] will also have a renewable energy product. [indiscernible] into nothing but entering the dollar -- producing the hydrogen using renewable energy. wherever say, they would also ask for the sudden portion of [indiscernible] in order to meet the round-the-clock department. So as we actually supply to [indiscernible], like whatever we are supplying today for the C&J customers, the cost consumption is what it will be for the Green hyrogen still different.
On the volumes, whatever we come in, it is we actually foresee the volumes for the 2 to 3 years ahead would be significantly higher. We'll ramp up our manufacturing capacity required to meet the demand.
Will take your next question from the line of [ Subhadip Mitra ] from [ Novama ].
My first question is with regard to the EPC opportunity that I said. So you did mentioned that, hopefully, by FY '27, we may look at the overall TAM growing to about [ 90 ] gigawatts. Within that, how much do you foresee being the EPC part? What proportion of it?
First of all, there is a [ 90-megawatt ] in the sector, it is not a [indiscernible], I hope I'm clear that.
Of course, that is the overall market size correct?
So our -- obviously, entire [ 90 ] gigawatt as to be EPC. It all depends upon the investors need whether they want to give it an EPC to somebody like us, they will say that we will do our own development and then do the BOP ourselves and to give it to some third-party that was given on the [indiscernible]. We don't know how the shape would happen. I can only comment upon current order book what we have, as I said, that 1/3 in EPC is a [indiscernible] but how we do shape up as moving ahead. But I then our aim and objective is to keep increasing EPC because if you have a land [indiscernible]. So we don't do this developmental route. We are trying to increase portion of our order book because then we have a control on the project.
Understood. Understood that point. Just if I may rephrase my question in a different way. What I was trying to get to is that my understanding is a large portion of the TAM today is either C&I market or probably PSUs or other players who probably don't have their own EPC capabilities. So clearly, that portion of the market will need a [indiscernible] service provider like yourself. So I was just trying to get a guesstimate of to how large that can be even.
If you look at today's current year, when we have commissioned 3,500, 2,200, 3.2 gigawatts to [indiscernible] share [indiscernible], okay? There are other people who are actually developed and commission is projects. So there are capabilities available today may not be a turnkey volume doesn't exist today other than us. But the people are trying to do is that create different packages, give electrical to somebody you land to somebody. But there are problems in integrating the project. Those issues are facing. That's one of the reasons why capacity addition is not happening to the [indiscernible]
Base experience how the it all depends upon how what the investor wants to do it -- it is that says is to go give a take this on because there are nobody who takes [indiscernible] other than us.
Correct. Understood, understood. And then secondly, in terms of competition, do you see a lot of competitive intensity coming in from some of the larger MNC players whether it's [ Westar ] and [ Vision ] or otherwise? And can that become a threat for us later on in terms of them trying to eat into our market share?
I don't think so then the pie is increasing to 9 to 10 gigawatts. Obviously, I don't think we are even dreaming that we can deliver 9 to 10 gigawatts in FY '27. There is a significant capacity for everybody. And then the under point of it, I think we are definitely cheaper than the European affairs. And whatever we share with Indian others part even today, they're in the market existing, but you can see our market share [indiscernible] order. We have our own set of customers, especially in the [indiscernible] segment.
So simplicity to answer, we don't see a competition pressure in the next 2 years.
We'll take the next question from the line of [ Ravi ] an Individual Investor. Please go ahead, sir.
Yes. Just a follow-up on the competition intensity. What would be market share on OMS side? I understand from the installation side, it's 27%, 28%. What would be on the OMS side? And the second question is I understand from your support that [ Semana ] is on the block. Any color? I mean you do not want to talk about the special competitor, but just what would it impact be on for us to get new business on OMS side, which they were handling or anything that you might want to comment?
As far as the market share of [indiscernible] is concerned, fundamentally, a very single machine we sell. We only sell with the condition that there are service contracts. So before whatever we are delivering is what keeps on increasing our number. So therefore, whatever is our market share in terms of COD, let's say, 37% market share that much would keep increasing in our less business. And we in business today, obviously, we have the largest market that is because otherwise, everybody is a much lesser capacity, even 15 gigawatts of what we are operating. And as far as the [indiscernible] don't want to comment.
But on the multi-brand acquisition, not commenting in a specific manufacturer, you know that we started getting into that area, but we're going in a very cautious manner. Today, we have about 220 megawatts we are operating today. Most part of it is we acquired during this year but in the case, look at them, stabilize before we actually expand in a significant way as far as creating acquisition is concerned. Let's see how things [indiscernible] in the future.
But multi-brand is definitely one which is a big for us to increase our market share in [indiscernible].
Thank you, sir. Ladies and gentlemen, we take that as a last question for the day. I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for participating in today's call. Of course, our [indiscernible] detailed results and our presentation are available on our website. And our Investor Relations team is available for any further follow-up queries and interactions that you may have. Thank you for joining, and have a great weekend. Bye.
Thank you.
Thank you.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.