Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NLC India Ltd (BOM:513683, Financial) achieved a 22.17% growth in lignite production during Q1 FY25 compared to the same period last year.
- The company's coal production increased by 35.27% during Q1 FY25 compared to the previous period.
- Power generation increased by 13.48% from 5,405.17 million units to 6,133.67 million units in Q1 FY25.
- Profit after tax for the quarter ended June 30, 2024, was INR495.98 crores, a growth of 49.83% compared to the previous year.
- NLC India Ltd (BOM:513683) received several awards, including the Best Exhibitor Award in Coal Category and Best ESG Report Award.
Negative Points
- Under-recovery for the quarter on a stand-alone basis was INR123.86 crores, indicating ongoing inefficiencies.
- Land acquisition issues at Neyveli affected plant availability, although the situation has improved.
- Technical liabilities at TPS-II expansion continue to cause under-recovery, though long-term modifications are planned.
- The average e-auction price for coal decreased from INR2,369 per metric tonne last year to INR1,354 per metric tonne this year.
- The company faces potential tax liabilities due to a recent Supreme Court ruling allowing states to levy taxes on mineral assets.
Q & A Highlights
Q: What was the under-recovery in the quarter on a stand-alone and consolidated basis?
A: There is a reduction in the under-recovery in the current quarter compared to the last financial year. The total under-recovery for the group was INR209 crores last year, whereas it is INR139.89 crores this quarter. On a stand-alone basis, it reduced from INR183.71 crores to INR123.86 crores. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: What is the status of land acquisition for the mines at Neyveli? Is it still affecting our plant availability?
A: The issues were sorted out with the support from the district administration, state government, and central government. Around 560 hectares of land were taken into possession, and production levels reached normal by January. Currently, there is no generation loss due to lignite production. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: Can you provide an update on the commissioning of the first unit of Ghatampur Power Plant and the timelines for Talabira Power Plant and TPS-II expansion?
A: The first unit of Ghatampur is expected to achieve COD by end of this month or latest by September 15. Unit 2 is targeted for November '24 and Unit 3 for March '25. Talabira Thermal Power Plant's Unit 1 is expected by July 2028. For TPS-II expansion, we are now going for 2x500 MW units, with the feasibility report to be finalized soon. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: What are the plans for the commercial coal mines of North Dhadu and Machhakata?
A: For North Dhadu, we aim to start coal extraction within 36 months, ahead of the 57-month timeline. For Machhakata, we plan to start production within 36 months, ahead of the 55-month timeline. Both mines are expected to significantly contribute to our coal production. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: Can we expect any capacity additions in the renewable sector this year?
A: We are targeting to add 300 MW from our Barsingsar solar power station in the current financial year. Additionally, 1.7 GW of projects in Rajasthan and Gujarat are expected to be completed in the first half or third quarter of the next financial year. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: What is the current status of the e-auction for coal?
A: This financial year, we have already sold 8.22 million metric tonnes through e-auction at an average price of INR1,354 per metric tonne. Last financial year, we sold 9.10 million metric tonnes at an average price of INR2,369 per metric tonne. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: What is the CapEx for FGD and when is it expected to be completed?
A: The CapEx for FGD varies by plant, with NTPL at INR625 crores, NTPC at INR665 crores, and NUPPL at INR979 crores. The activities are at different stages of completion and are expected to be completed before the Government of India's timeline. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: What is the regulated equity for mining and how will it change going forward?
A: The total regulated equity as of now is INR9,529 crores, with INR3,598 crores for mines and INR5,931 crores for thermal. By 2030, the regulated equity for mining is expected to almost double to INR5,952 crores, and for thermal, it will increase to INR12,932 crores. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: How will the recent Supreme Court ruling on states levying tax on mineral assets impact NLC India?
A: We are working out the overall impact, but any statutory impact will be a pass-through. In Tamil Nadu, there is no such problem, but we are assessing the impact in other states. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
Q: What are the plans for the JV with the Rajasthan government for lignite-based and solar power plants?
A: We are forming a JV to install around 500 MW of lignite-based thermal power and 2 GW of solar power. The JV will be formed within the next quarter, with renewable projects expected to be completed within two years and the lignite-based power station within four years. - Prasanna Kumar Motupalli, Executive Chairman of the Board, Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
