Sterling and Wilson Renewable Energy Ltd
NSE:SWSOLAR
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Sterling and Wilson Renewable Energy Ltd
Earnings Call Analysis
Q2-2024 Analysis
Sterling and Wilson Renewable Energy Ltd
The company has announced an ambitious fundraising initiative, obtaining approval from the Board of Directors to raise up to INR 1,500 crores through a variety of financial instruments like equity shares, global depository receipts, and convertible bonds. This funding is aimed at tackling the company's debt shortfall and is pending shareholder approval through a postal ballot.
Executives reported a robust domestic order pipeline with visibility around 16 gigawatts, mainly from public sector units (PSUs), projecting strong competition and successful bids as in the past. Internationally, progress in Australia, Africa, and the Middle East was mentioned. In terms of profitability, the company anticipates higher margins in the Khavda project area due to economies of scale, with expectations to maintain historic margins on domestic projects. Additionally, executives expect operations and maintenance (O&M) revenue to see a significant increase, projecting a 2.5x revenue increase in approximately two years, with gross margins in O&M averaging between 25% to 30%.
Concerns about debt levels and a potential default were raised, but executives reassured that no loan recalls by lenders have taken place. Although loans have been classified as current liabilities to conform with accounting standards, the company is confident of securing INR 418 crores from promoters as per an indemnity agreement, with substantial amounts already received and the rest expected shortly. These funds, in conjunction with the pending fundraising efforts, are aimed at meeting financial obligations over the next several months.
An anticipated order in Nigeria, signed via an MOU last September, is nearing finalization with the EPC agreement discussions ongoing, aiming for revenue contributions in Q1 or Q2 FY '24. In the realm of emerging technologies, the company is actively pursuing prospects in storage systems combined with solar in geographies such as Australia. They're also in discussions with Reliance Industries for potential orders after land allocation. These efforts illustrate the company's focus on diversification and expansion into new domains.
Senior and middle management teams are reported to be highly engaged and optimistic despite current financial challenges. They perceive the situation as temporary and are motivated by a strong order book and the company's success in securing domestic orders. Internal communications have been proactive, with frequent updates on developments and strategies, reflecting a bullish outlook on future business growth.
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Ladies and gentlemen, good day, and welcome to Sterling & Wilson Renewable Energy Limited Q2 FY '24 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Sandeep Thomas Mathew, Head Investor Relations, for his opening remarks. Thank you, and over to you, sir.
Yes. Good morning, everyone, and welcome to our Q2 FY '24 earnings call. Along with me I have Mr. Amit Jain, our Global CEO; Mr. Bahadur Dastoor, our CFO; and SGA, our investor relations adviser.We will start the call with the key operational highlights for the quarter and outlook by Mr. Amit and then followed by the financial highlights by Mr. Bahadur, post which we will open up for Q&A. Thank you, and over to you, Amit.
Thanks, Sandeep, and a warm welcome to all the participants on this call. I would like to give a quick update on our business operations and outlook on the solar industry. Beginning with our order book, the company announced new orders totalling approximately INR 2,640 crores in Q3 FY '24 aided by strong ordering momentum seen in India. Coupled with our order inflow of INR 466 crores announced in Q1, our total order inflow in H1 FY '24 is INR 3,106 crores. All the orders announced in the first half are from domestic market.We received an order for an approximately 375 megawatts project in Khavda, Gujarat from NTPC in Q2 FY '24. This is the third order from NTPC and is strategically located between the first 2 projects we had earlier announced in FY '23. This project is on turnkey [indiscernible] basis including supply of the module. The equipment contract price, including operational and maintenance for 3 years is INR 1,535 crores and this amount [indiscernible]. We also won our first order from Gujarat Industries Power Company Limited, GIPCL, in Q2 FY '24 for a 750-megawatt DC project again located in Khavda region of Gujarat. Scope of work in this project [indiscernible] total bib value including operation and maintenance for 3 years is INR 1,130 crores. Coupled with NTPC [indiscernible] 4 gigawatt of projects in Khavda region of Gujarat, including NTPC and GIPCL. We are targeting to maintain our historical domestic margins in these projects as well.In addition to Khavda projects, the company has also received a new order of approximately 490 megawatt DC [indiscernible] from Indian subsidiary of French power major ENGIE. As stated earlier, total EPC contract value of the project won in Q2 FY '24 is approximately INR 2,640 crores. With these new orders, our unexecuted order book as on September 30, 2023, has increased [indiscernible] approximately INR 6,835 crores, with nearly 90% of the order book comprising of domestic EPC projects, which are executable over the next 12 to 18 months.With the inclusion of Nigeria MOU that was announced in September 2022, our order pipeline is anticipated to enhance significantly. We are working with various stakeholders to finalize the D&EPC agreement for the project. In terms of outlook, our domestic order pipeline has grown very strongly and is alone approximately 16 gigawatts with PSUs contributing more than 55% and private sector IPP 45%. Our business development teams are working very hard and remain focused to deliver the strong growth trajectory we are targeting this year.In the international market, and while we have been adopting a more cautious approach with new orders, we are beginning to make [indiscernible] for projects aligned with our risk metrics.As stated in earlier calls, we reiterate that lumpiness in order flow is to be expected with EPC companies like ours and time line for [ FTV ] project closures will be varied depending on a host of factors, including finalization of contractual funds, financial closure, et cetera.Now moving to industry's outlook, we continue to witness an unprecedented decline in size of silicon wafer cells and modules in the last 12 months [indiscernible]. And as an industry [indiscernible] module price [indiscernible] and is even below the historic lows we were seeing [indiscernible]. With significant supports, supply pressure, we see emergence of new production capacities in China. Industry analysts continue to anticipate module prices will remain depressed for some time. The [indiscernible] rise of some projects [indiscernible] which should translate into more work for EPC players like us. The Indian sales of EPC market continues to remain in a very attractive position, and we are hopeful of capitalizing on the strong order pipeline. Solar operation and maintenance sector has emerged as a distinct and highly profitable market both in [indiscernible] landscape and dynamics with the [indiscernible] operational solar plant, the [indiscernible] contracts is becoming the one prospect for providers such as ourselves.We remain focused on expanding our O&M portfolio, making an enhanced emphasis on third-party O&Ms using global market, utilizing both organic and inorganic strategies.With this, I will ask Bahadur to take you through the consolidated financial highlights. Thank you very much.
Thank you, Amit. I will start with an update on the key quarterly results. Revenue from operations for the quarter ended September was INR 759 crores. Revenue has improved significantly, both year-on-year and sequential basis, aided by higher contributions from the domestic EPC segment. Revenues were up 88% Y-o-Y and 47% quarter-on-quarter. Company has reported a consolidated gross margin of 8.6% in the second quarter FY '24. And gross margins in the first half FY '24 are approximately 10%.Domestic EPC margins in the second quarter FY '24 were also approximately 10%. Our unexecuted order book continues to comprise over 90% of domestic EPC business. International EPC margins were negative 2% in 2Q FY '24. O&M segment margins rebounded this quarter and touched more than 23% and are now more in line in what we are hoping to be steady state margins in this segment. Company reported a positive consol EBITDA in the second quarter FY '24. PAT [indiscernible] during the year was INR 54 crores -- during the quarter was INR 54 crores. On a stand-alone basis, the company achieved EBITDA breakeven, and it was also PAT-positive.Now coming to the balance sheet and our debt situation. As on September 30, 2023, our net debt stood at INR 2,123 crores and our net worth stood at negative INR 415 crores. The company and its subsidiaries had loan payments of INR 329 crores to various banks in the month of September '23. Out of the above, the company made payments of INR 194 crores. Company had availed INR 250 crores short term loan for working capital for 1 year, which was due on September 30, 2023. The company was able to repay INR 115 crores from internal accruals and an amount of INR 135 crores remains overdue as that date.Rating downgrades post our BG invocation in July 2023 made sourcing loans more expensive and difficult. With respect to our results, the auditors have made certain observations in the consolidated and standalone financial statements as emphasis of matter. The company incurred losses during the previous year and has continued to incur losses during the 6 months ended 30th September 2023. Further, as on 30th September, the company had a repayment due of the short-term loan for working capital purposes from a bank amounting to INR 250 crores, of which INR 135 crores is yet to be repaid as at date. The aforesaid events results in cross default in respect of certain other loans bearing a fixed maturity period. Consequently, noncurrent loans aggregating to INR 516 crores have also been classified as current borrowings in the statement, even though the company has not received notice of recall of loans.The company is working towards a resolution plan with its lenders by way of funds to be raised from equity or debt issue and amounts recoverable from the promoter selling shareholders in accordance with the indemnity agreement. The management is confident of successfully consummating the above plans. In the standalone financial statement, the emphasis of matter [indiscernible], the company's investment in a subsidiary and loans given which accrued interest thereon and other receivables aggregates to INR 2,395 crores as of 30th of September. We are confident that these amounts are good for recoveries based on the projected cash flows expected from revenue contracts where letters of intent or memorandum of understanding have been signed, refund of entire bank guarantees, recovery of remediation costs incurred on projects and amounts recoverable under the indemnity agreement with the promoter selling shareholders.The Board of Directors of the company at its meeting held on 27th September 2023 considered and approved raising of funds by way of issuance of equity shares, global depository receipts, foreign currency convertible bonds, fully partly convertible debentures, nonconvertible debentures and/or any other financial instruments convertible into equity shares, including bonds or a combination of any of the securities mentioned above in one or more tranches through one or more public and/or private offerings, including by way of a qualified institutional placement or any combination thereof or any other method as may be permitted under applicable laws to eligible investors for an aggregate amount not exceeding INR 1,500 crores in one or more tranches subject to regulatory statutory approvals as may be required, including the approval of the shareholders of the company through a postal ballot, which is presently in process.With this, we can now open the floor to questions and answers.
[Operator Instructions] We'll take the first question from the line of Bajrang Bafna from Sunidhi Securities.
Congratulations for a good set of numbers during the last quarter and the good guidance in the coming quarters as well. So sir, my first question pertains to the kind of visibility that you are getting from the domestic market because to our understanding the order pipeline for the PSUs itself stands closer to 20,000 sort of megawatt on a yearly basis. And we have secured close to INR 3,000 crores of orders in the first half. So sort of pipeline that is visible for the second half. And considering the rating downgrade, what implications it would have on the new order intake as far as domestic orders are concerned? And some visibility on the overseas orders would be really appreciated. So that's the first question. And my second question purely pertains to sort of margins that is visualized because I believe that the Khavda, you have got lot of capabilities now in terms of resource mobilization because the Reliance orders are also anticipated to come maybe in the near to medium term. So in terms of margin trajectory, how are you seeing the margin trajectory for these domestic orders would be equally interesting. And my third question pertains to purely on the buildup of your O&M revenues because I think the progression of orders is going very robust in the near to medium term. So what sort of trajectory that you are seeing for the buildup of this [indiscernible] revenue? And what sort of margins are predictable on the O&M side, maybe from next 2 to 3 years' perspective, that will be really appreciated.
Yes, good morning. So to start with the order pipeline in India, I would say the pipeline is very robust. And at this point of time, the pipeline is 16 gigawatts. And as you rightly said, the major portion of the pipeline is coming out of PSUs. So as you would have seen from our performance in last 3 quarters that we have been consistently performing well and very competitive in PSU bids. So looking at past performance, we are hopeful that we'll be able to maintain our competitive approach in the bidding. And we will be fully successful as we would have been in past. So we are very, very hopeful and expect that our performance is going to be as robust as it has been with respect to public sector and [indiscernible]. So order pipeline is going to remain very, very robust. Now coming back to international pipeline. So we are working in multiple geographies with various clients, including Australia, Africa and Middle East. So we are working on those projects. And South Africa and Africa is also a very, very strong market. So we are favourably placed in some of the projects, and we have received the [indiscernible] LNTP, that is called limited notice to proceed for [indiscernible] of the project. So we are progressing well on international markets as well. Now coming to your question on profitability and concentration in Khavda. So you're absolutely right. We have achieved a significant scale in Khavda and the like concentration of the projects in one location then with the optimization of overhead, and we expect to increase our margins on the projects, which we get in Khavda. Sitting in public domain that RIL has, Reliance Industries, are also going to have the allocated land in Khavda. So whenever the projects are announced and whenever we get the orders. So we hope if you work on those projects, of course we will be [indiscernible] economies of scale, we will be improving our margins on those projects as well. Now coming to [indiscernible] portfolio and retendering of the projects which have completed earlier and some of the projects in each portfolio being implemented by [indiscernible] we expect the strong robust growth in our O&M business portfolio. So I think it will be growing at a much faster rate than it has done in the past. So that's what we would like to say. So all the business trajectory, both EPC as well as O&M is for a very, very strong and robust growth, and we'll be able to maintain our historical margins which we have maintained in domestic markets.
Just to add to what Mr. Amit has said. In terms of O&M, we expect the portfolio to actually give us revenue which will be about 2.5 to 3x in about 2 years.
We'll take the next question from the line of Puneet from HSBC.
My first question is with respect to the debt shortfall that you're experiencing. Is there any thought from the promoters' perspective to infuse funds? And secondly, related to that is it seems there has been a default. Do the other debt covenants also come into force, which might drive other defaults?
So Puneet, I already mentioned that because of the governance, the lenders do have a right to recall the loans. However, none of the lenders have recalled the loans. So to meet the requirements of the accounting standard, these loans have been classified as current. As far as the promoter inflows are concerned, the company has raised a claim on the promoters under the indemnity agreement for INR 418 crores. The correct due date for receipt of this is November 30, 2023. We are of course in discussion with them requesting an early repayment.
And any snowstorm of the 40% Reliance promoter? Are they infusing anything to support the company?
The company is anyway looking at a long-term solution, which is what we mentioned, the Board has approved and right now is with the shareholders under a postal ballot. So we're looking at more long-term solutions rather than something which is just a stop gap.
Understood. My second question is with respect to the business. In your new contracts, you once you have taken projects which have module price risk. What is the thought process behind it? And if you can also talk about what is the price of modules, that you talked about 15% and for what delivery period does it pertain?
Yes. So as far as the domestic market is concerned, so we have the complete backup of pricing for these projects which we have taken with modules. So there is absolutely no risk at all. The modules are being sold from Indian suppliers, and we have backup supply from Chinese suppliers as well. So as far as this particular project is concerned, we are fully protected. And as far as the down trend is concerned we are seeing the continuous correction [indiscernible] additional capacity addition in the Chinese market. And they have a huge profile of modules in European market. So that is why module prices are coming down and we expect at least in the short term this tend to continue.
And for the NTPC project, would you have to take Indian modules? Or do you have the option to take Chinese modules as well?
No. See, for the project to be completed, till March we have an option of taking Chinese modules wherever it's there. But after that, [indiscernible] policy we have to go with Indian suppliers. And India also now we have significant capacity. And for this project we are backed up Indian suppliers also.
And just a bit on the technical side, if you do import modules before 31st March, but the COD gets delayed beyond March, who bears the project [indiscernible] because the government will not, in that case, allow the COD, right --
[Indiscernible] before March, then we are allowed to import. But in this particular case, as for the policy guidelines [indiscernible] modules is from India. There is no further extension or waiver of [indiscernible] by the government of India.
Sorry, just lastly, and what is the price of Indian module manufacturers?
Indian module manufacturers pricing are varied from $0.21 per watt to $0.23 per watt.
[Operator Instructions] We'll take the next question from the line of Rabindra Nath Nayak from Sunidhi Securities.
And congratulations for you reaching the expected number as compared to the first quarter. So my question regarding this gross margin, did you say contraction in the gross margin from 11.4% in Q1 to 8.7% in this second quarter? So how you see the gross margin going ahead in the coming quarters? That is the first question. And if there is a positive EBITDA margin in this quarter, so the other expenditure has come down substantially. So whether this is related to some provision [indiscernible] or foreign exchange gain, which [indiscernible] cash flow statement [indiscernible]. So that is my second question. And there was a third question [indiscernible] what is the [indiscernible] other financial assets has gone up from INR 1,260 crores in the year Q1 to around INR 1,718 crores. So what is the indemnity proceed in this item, so we can clarify [indiscernible] balance sheet line item for the indemnity proceeds. And sir, fourthly about the rise of [indiscernible] revenues. So you have actually this other current assets, there is an unbillable revenue [indiscernible] actually INR 818 crores in the end for '23, it has gone up to INR 1,303 crores. So what is the unbilled revenue in this item, if you can clarify, that would be helpful. And about the NTPC projects that you have [indiscernible] whether the projects [indiscernible] or it is based upon the project completion you will get the orders [indiscernible]. So can you please clarify all these things, sir?
Rabindra Nath you will have to repeat because there were far too many questions and I would need you to just repeat them one by one. Regarding gross margins, why the gross margins are around 8%. If you see our investor presentation, which was uploaded yesterday. In the Domestic segment, we have got INR 567 crores of revenue with INR 57 crores of gross margin, which means the domestic gross margins are maintaining the 10% trajectory, which we have been talking about. There is, however, INR 141 crores of international EPC revenue, for which there is no gross margin except for a small loss of INR 3 crores. And that is what is oppressing on an arithmetical basis your overall gross margin. So that is the answer to your first question. If you don't mind to quickly repeat your second and so I'll answer each question as and how it comes.
Positive EBITDA, whether there is some [indiscernible] foreign exchange gain that you have booked in this quarter?
So foreign exchange gain is booked quarter-on-quarter as and how it arises. Again, if you look at our financials, our operational EBITDA on a consolidated basis is shown before the ForEx gains. There was a ForEx gain of INR 22 crores in this quarter for quarter of September '23 -- '24 -- '23, yes. Your next question.
Is there any right [indiscernible] provisions because [indiscernible] that you're asking.
No, there is a write-back of excess provisions in projects to the extent they are not required. So that has been done in case of our Australia and U.S. project. Similarly, there are always some small additional provisions return [indiscernible], for example, [indiscernible]. These are things which should go on happening and they sort of balance themselves out. There is a provision write-back, but that is in the project and in the gross margin. So as you can see, the gross margins in the domestic business, as I mentioned, are maintaining themselves. And there is just a negative INR 3 crore margin in terms of the international. There is no write-back of provisions in case of overheads as such.
Okay. And about the indemnity deals, so because the line item has gone up from INR 1,250 crores to INR 718 crores. So what is the line for the indemnity process and [indiscernible] second quarter?
So indemnity items are put out at various line items and there is no single line item as such because there is no heading called indemnity items as per the Schedule 3 to financial statements. They are there in receivables. They are there in taxes, direct and indirect. They are there in other financials and other current assets as well. The total indemnity receivables, which are lined up assets as on 30th of September are roughly INR 1,400 crores, out of which INR 400 crores as what has been claimed from the promoters post 30th of September. So after that, in terms of what is lying in the balance sheet would be a number of about INR 1,000 crore to maybe 1,050 crores.
Okay. So that means this INR 718 crores, [indiscernible] right?
No, no, I said it is there in various places, and it is not in a single place. Other current and financial assets also include unbilled receivables, which are put over there.
Okay. And this line item [indiscernible] unbilled revenue [indiscernible] gone up from INR 818 crores to INR 1,303 crores. So how should we see this thing panning out in the coming quarters and the year ahead?
Unbilled revenue gets converted almost on a monthly basis from unbilled to build. So these items will keep panning out. We are looking at it as an absolute number. But month-on-month, it gets put in unbilled, in the next month generally it moves to billing and therefore receivables.
So whether it will be linked to the sales or it is -- it is not -- they were [indiscernible] this item?
Unbilled revenue is worked out on the basis of percentage of completion. What moves to sales is on the basis of agreed milestones with customers.
Okay. Okay. So that means the INR 1,303 crores is going to decline in the coming quarters or it is going to remain higher because you are going to increase the sales. So whether this will increase or it will remain control [indiscernible].
It will depend on the milestones which is achieved on every quarter end. There could be a decline if the milestones are significantly reached or in case there is material supply which has been sent out for which the billing happens in the next month, then there could be an unbilled revenue also which comes. So there is no positive or negative trend that can be attributed. It all depends on the circumstances.
Okay. And for NTPC projects, whether it is [indiscernible] milestone basis [indiscernible].
There will always be milestone basis. All projects the receivables are always milestone-based, which is agreed with the customer at the time of signing the contract.
The next question is from the line of Mahesh Bendre from LIC Mutual Fund.
So you just mentioned about the O&M business. So what is the current contribution to our sales? And if you could elaborate on how much this opportunity can become maybe 3-year fire down the line? And what will be our role in that?
So O&M is made out of 2 major parts. One is where we do the O&M during the defect liability period and is a part of our contract. And the third -- and the second is what we call it as third-party O&M, where we actually go and bid for EPC plants, which have been built by someone else or when our DLP is over and it is out for an open update. So as of right now, the O&M trajectory is expected to be in the range of about INR 200 crores to INR 250 crores in the current financial year. With the new inflows that we have got, both which are part of our contracts and which are projects which are expected to be completed, we expect that that number to go to about 2.5x in a couple of years.
Okay. And sir, the margin in this case will be high, right?
So it's an average 25% to 30% gross margin business. There is a slightly higher margin in the international side as compared to the domestic side. So it all depends on the mix, but that is the range that we are in. This is a gross margin. There is very little overheads in terms of the O&M business.
So EBITDA margins will be like 20%?
Yes, approximately.
Okay. And sir, just -- I mean if I look at -- maybe fire down the line, so many solar plants are coming up all over India. So the installed base is going to go up significantly from here on. So maybe fire down line how much this business can become for us. I mean just -- I'm not looking for a number as such. Purely from a directional purpose, how things will pan out [indiscernible] the line.
Yes. So as [indiscernible] next couple of years, we are expecting [indiscernible]. So even in the next few years, based [indiscernible] on the orders which we are receiving and we are expecting more and more [indiscernible]. We expect this order book to go significantly. But as you said, over 5 years or 10 years down the line, more and more contracts which are constructed by other EPC players or which have been in operation by other operators will come for retendering. So with the installed base, this market of on [indiscernible]. And we expect this number to grow exponentially. So as you rightly said, we are not booking any numbers, but in this particular segment, we see a very, very strong and robust growth. So 2.5x you imagine yourself what kind of numbers it can be. Our numbers can be [indiscernible] 12% AGR in other segments. So it can be 20% to 25% [indiscernible].
Sir, O&M side, are we the -- I mean, in terms of size, are we the largest in India [indiscernible] segment?
[indiscernible] we are the largest ones. And the competition is from the smaller players. [indiscernible] portfolio, otherwise for third-party [indiscernible]. Not even in India. Globally, we are only the largest players.
So maybe fire down the line are maybe business structure revenue structure will change in favour of more O&M business that is high margins and [indiscernible].
[Indiscernible] bottom line [indiscernible] significantly in India. So as far as the revenue contribution is there, O&M will [indiscernible]. So I would [indiscernible] major contributor. But on the bottom line O&M will add significantly to the bottom line [indiscernible] high top line and high bottom line. Because this business will have predictable cash flows, higher margins and --
Absolutely. Absolutely. Yes, absolutely right. So [indiscernible] business will grow significantly. So it will have a sizable size. Right now, we are at INR 200 crores, INR 250 crores. So this may grow significantly. But EPC business will also grow significantly. So both of the business put together, the top line will be great and back to the bottom line in proportionate to the top line O&M will be contributing much flow to the bottom line [indiscernible].
Sure, sure, sir. And sir, last question from my end. This O&M opportunity, we are only looking into India? Or is it that global -- also, we are looking to at this market?
So we are -- like as we said in our opinions we had [indiscernible] we are looking at both organic and inorganic crowds, and we are addressing this in the [indiscernible]. So in the geographies where we are working, when we are doing EPC, we are doing O&M. Of those projects we are doing O&M in South America, we are doing one and in Africa. We have done one in the Middle East and Australia. So we are active in all the geographies. And now we are working to get, and that's one of the skills which we are working [indiscernible] increase our third-party portfolio for O&M in international markets. So we'll be operating globally wherever there was footprint taps [indiscernible].
Mahesh, just to give you a further statement, the O&M for both domestic and international is roughly half and half. So it is not that we are not operating O&M in the international space.
The next question is from the line of [ Harshit Gandhi ] from [ Harshit H Gandhi Securities Limited ].
Sir, first a clarification. Does this [indiscernible] participate in future tenders in India or abroad?
Yes, we are engaging with our customers, and I think we are working on the funding options. So we will remain eligible to put around the domestic and international projects.
Okay. But has this result hampered our eligibility currently?
No, no, no. As of now, nothing has been impacted. And all the bidding process negotiation with the customer where we were in that process is continuing at this range. We are engaging with all our customers and [indiscernible] developments and about all the actions we are taking. So customers are in the loop. And so far nothing has been impacted.
Okay. No I was just asking whether in the future if you want to participate in any tender, will we be able to participate?
Harshit, this is a short-term default which the company is working expeditiously to overcome, along with, as I said, discussions with the promoters. So this is not something that is going to extend for a long period of time. Besides also, as has been approved by the Board, we are looking at a long-term solution for a fund raise of a significant value not exceeding INR 1,500 crores to solve all of these problems. The balance sheet will then get fixed. The cash flow issues will no longer exist impeding our ability to attract more business. So what we are seeing right now is a short-term or near-term issue, which we are working to resolve.
And sir, one question is about the outstanding indemnity amount for [indiscernible]. Since 2021, ever since Reliance became the largest shareholder has we received any amount? I mean what is the amount that has actually been billed to them? And what is the amount that we have actually received until [indiscernible].
Bahadur [indiscernible].
Harshit, are you asking for both sets of promoters because you only mentioned --
No, I'm sorry, I'm asking for both sets of promoters [indiscernible].
Yes. In terms of the indemnity agreement, the claim has to be raised on 30th September of each year. The first INR 300 crores as has also been mentioned in our notes to the financial statements had to be borne by the company. The company had provided for the total amounting to INR 300 crores in the quarter ended December '21. In September '22, we raised a claim of INR 90 crores on the promoters because the total amount claimable at that point of time was INR 390 crores, of which INR 300 crores are to be borne by the company. The company received INR 90 crores. In this September, the company has raised a claim of INR 418 crores. Out of that, the company has already received about INR 43 crores from the promoters. The balance is to be received. And as I said, the last date for receipt is 30th of November. Have I answered your question?
Okay. Yes. Is the company confident [indiscernible].
Yes, the company is confident of receiving the money because we have paid in the past on time.
The next question is from the line of [ Deepak Pulswani ] from [ Swan Investments ].
Sir, just wanted to see the clarity in terms of the funds requirement over the next 3 to 6 months in terms of the debt repayment? And is this amount of [indiscernible] would be sufficient enough to meet these obligations?
The total amount which will be required from now till, say, end of March is roughly INR 1,300 crores. The amount receivable from promoters is roughly INR 400-ish crores. And that is why the company is working on the fundraising plan, which has been mentioned in the financial statements.
Okay. And in that context, downgrade from the bear trading would have any implication in terms of the [indiscernible].
The company is right now in discussions doing whatever it can to its best abilities to make sure that the fundraising happens in the manner it is planned.
The next question is from the line of Balasubramanian from Arihant Capital.
I just want to understand about the Nigerian order, like when the order will start for executions and when it will complete and what kind of potential we have, what are the challenges we have in that quarter?
So Nigeria order [indiscernible] as you know, MOU was signed in last September, and we are still discussing with newly formed cabinet for the finalization of the EPC agreement, and we expect it to get concluded soon. So we are still working on it to get it signed. And we expect, once it is signed, we expect revenues either in Q1 FY '24 or Q2 FY '24 [indiscernible] the project.
The next question is from the line of [ Rahul Kothari ] from [ Bridge Equities ].
Sir, can you give me some guidance on the hybrid opportunities and also pure [indiscernible] opportunities in both the domains?
[indiscernible] as far as the hybrid is concerned, as and when now we have started looking at [indiscernible] but the hybrid pipeline is not like it's developing at this point of time, projects are getting announced. And as you would have noted, we already have executed projects for battery energy storage system. So we are working on multiple bids in some of the select geographies like Australia on battery [indiscernible] system project coupled with solar or stand-alone projects. So as and when these projects will announce our pipeline is swell up. So we'll start working on those projects. But at this point of time, I will not be able to give a concrete number for that pipeline. So what we shortly expect to finalize in one of the projects of that system in one of the international [indiscernible].
Okay. And asking sir, can you give me any guidance any further development or guidance with regard to Reliance [indiscernible]?
Reliance projects, like as you know the land has been allocated, we are in discussions, and we'll announce whenever the orders are received from Reliance.
The next question is from the line of Namit Arora from IndGrowth Capital.
Sir, my question was around internal communication because of your engagement with the senior management team and the middle management team, given the current sort of issues at the company, if you could give us some color of your layers of engagement and your efforts to maintain employee [indiscernible] and momentum in these current difficult circumstances.
[Indiscernible] senior management, middle management and across all the management levels, teams are fully engaged. And the morals are very high considering the strong order book and kind of success we are seeing in the domestic market. This resurgence in domestic order book the morals are very, very high. This we see that whatever the current financial position which has happened is a short-term phenomenon, and we are working very aggressively to address that. The Board has already given its mandate to work on all kinds of options for fund raise. So this has been communicated across the organization, all the senior and middle management teams are fully engaged in those discussions, and they have been -- we addressed all the developments from time to time. So we see [indiscernible] of the teams and teams are like very bullish on the business moving forward.
The next question is from the line of [ Mitch Shah ] from [ Prospero Tree Financial Services ].
Congrats for a good set of numbers [indiscernible] question. Amongst the INR 329 crores of loan repayments, which we had to pay in September, what amount of this was protected under the indemnity clause?
None of the loans are protected under the indemnity clause. Indemnity items are more for receivables, liquidated damages, et cetera. Loans were taken as a bridge to meet the past losses of the company. So loans cannot be indemnified. They are a means to cash flow.
Okay. And this INR 1,300 crores, which we have to pay until March, what about that?
Also that all -- none of the loan --
[Indiscernible], right?
Yes, there are loans. [Indiscernible] INR 1,300 crores, that is the total loan, including, this amount includes the present overdue, sir.
The next question is from the line of Faisal Hawa from H.G Hawa and Company.
Sir, there has been the drop in solar panel prices and other key raw materials also. So in the orders that we have already taken from most of the energy PSUs, what is the kind of EBITDA margin improve that we expect in the next year or so?
So most of the order are like domestic [indiscernible] domestic, and we maintain historical 10% to 11% margin in those projects.
Also the fact that the domestic orders are all BOS [indiscernible] so therefore there is no module in that. The only one order which we have very recently picked up is this NTPC order. So leaving that aside, module price does not affect the margin improvements on our existing projects. Though of course the team has worked towards improved efficiency because in the Khavda region now we have almost 3-plus gigawatt of what's happening simultaneously.
And I suppose even the Reliance project even in the same neighbourhood? [Indiscernible].
It is expected to be in that neighbourhood of course.
Okay. And would it be a right statement to make that even the battery opportunity [indiscernible] opportunities almost as big as the solar opportunity?
Battery opportunities [indiscernible] significantly higher because as we move into [indiscernible] hybrid, so that we expect that, that market will be significant size to be addressed both in India and internationally.
Can you give a very frank answer to this we are almost having 3 promoters and all 3 promoters are big investors in their own right. So is there no kind of -- is the professional management not finding it difficult [indiscernible] to report [indiscernible] causing a lot of problem in [indiscernible].
So firstly, I do not believe there is any turf war between any of the promoters. They are all working together. They are all participating in Board meetings. I am also a member there, and it is done in a complete professional manner. The management also does not face any challenges in talking to all 3 sets of promoters judiciously as and how required or give them whatever information is sought from them. As far as the indemnities are concerned, there is a very clear agreement. The management works towards crystallizing of those items as expeditiously as possible. Once the claim is raised, it is sent out to all the promoters, including Reliance [indiscernible]. And the payments are being made. So I am not seeing any turf that we, as management, are finding difficult to handle, anything of that sort.
So as we have alluded in our earlier calls also, the Board is providing strategic guidance and directives to the company, and we [indiscernible].
[Operator Instructions] Ladies and gentlemen, as there are no further questions. With that we conclude today's conference call. On behalf of Sterling and Wilson Renewable Energy Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.
Thank you, sir.