NHPC Revises MoU For Pumped Storage System
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00:00Let's get in Mr. Rajkumar Chaudhary, the CMD of the company, to talk about this and more.
00:04Mr. Chaudhary, good having you. Thanks for joining in. I hope all is well. Before I get to the bigger
00:08picture of the capacity additions over a period of time, let's talk about this new MOU. 7,350
00:15megawatts seems large. Tell us a bit about this. We have signed a MOU. You are probably asking
00:25about the pumped storage scheme. So we have signed a MOU with the state government of Andhra Pradesh,
00:33Maharashtra for pumped storage scheme. And we have signed a MOU with the Gujarat government
00:40also for one of the pumped storage scheme. And we are working total capacity 11,340 megawatt. Out of
00:50that we have 4,350 megawatt. So we have all in the DPR stage. And PFR we have completed for 2,600
01:02megawatt. The rest of the capacity 4,300 megawatt we are in the stage of preparation of the PFR.
01:11For 2,600 PFR we have already submitted to CA and CWC. And for the DPR stage project also
01:19PFR we have already submitted to CA and CWC. It is in the clearance stage. Got it. Sir, how does this
01:27pumped storage systems revenues work for a company like NHPC? So the headline that we get is that
01:33there is a 7,350 megawatt contract, hypothetically a contract word. How does this accrue in terms of
01:40revenues and profitability for NHPC typically? So what is happening around for pumped storage
01:50scheme, you know we will get the input energy through solar power. And we store that energy
01:59by pumping to the higher reservoir, upper reservoir. And during the peak hour, during the
02:07peak hour it is required. So we will start the pumped storage and the water will come from the
02:14upper reservoir to the lower reservoir and we will get the peaking power. So around 15%
02:20of the revenue we are expecting that we will get from the pumped storage scheme.
02:28Majorly we will focus, continue focusing on the conventional hydropower project.
02:3420% revenue. So let us say if it is a 1,000 megawatt
02:41contract, what does it translate in terms of revenues, sir?
02:45A 1,000 megawatt project, it is the same. That return on equity will put their equity 20%. In
02:54the pumped storage scheme, 80% loan and 20% equity. Where conventional hydropower, 70%
03:01loan and 30% equity. So return on equity is 17%. So whatever the, if you say 1,000 megawatt
03:11pumped storage scheme, so the total cost of the project will be around 5,000 crore. Out of 5,000
03:18crore, 1,000 crore will be the equity. So 1,000 crore equity, 17% of that, 170 crore per year,
03:28we will get the return on equity. Got it. This is very helpful. Thank you so much, sir. So
03:33you have identified schemes, I believe, with a capacity of 18,190 megawatts, no allocation as
03:41yet in FY25 CAPEX. So I'm guessing the groundwork starts in the next couple of years. Would that be
03:47a fair assessment? Yeah, yeah. That is because you know that 7,144 megawatt in the present
03:57capacity, installed capacity of NHPC. And subsequent year is 2024-25, we are going to commission 800
04:09megawatt Parvati power project. Then apart from that, 300 megawatt solar power in Bikaner,
04:1888 megawatt floating solar in Andhra Pradesh Reservoir. So that and 100 megawatt in Andhra
04:26Pradesh solar power. Apart from that, three units of the Suvansi Lower, so 250 megawatt each unit.
04:33So we are going to commission 750 megawatt in the month of March 25. So that is the capacity
04:42addition during this year. So total capacity will be around 9,909 megawatt. Then next year,
04:492025-26, we are going to add 120 megawatt Rangit 4 project. So in that case, the total capacity
04:59will be and some more capacity of the Suvansi Lower. So in this way, once the 27-28,
05:09we will commission all under construction 10,763 megawatt under construction. So we'll commission
05:16the project except the Diwan. Diwan is 2,880 megawatt. So that project will be commissioned
05:23in the financial year 32. Okay. So well, the expectation as per what people are trying to
05:31figure out, I mean, the hydro capacity addition, I believe there is some 1000 plus megawatts of
05:36solar capacity addition as well. The belief is that the installed capacity with regulated return
05:44will probably grow by about 50% in the next three years. Is that possible?
05:49In the next four years, we are going to double the profit, the profit after tax.
05:57So in the next four years, means by the end of the 28th financial year, profit will be
06:04presently it is 3,700. So at the end of the financial year 28, during the financial year,
06:12we will get profit after tax is more than 7,000. So almost we are expecting double.
06:20Got it. Okay. Okay. Well, I was going to ask you, sir, that estimates say that you want your profit
06:27after tax compounded annual growth rate could be 29% over three years, you are saying it will be a
06:33slightly lower number, it will not be 29%, maybe about 20-21% odd. Yes. Yes, you're right.
06:40Got it. And revenue growth from where it was in FY24, would it more than double in the next four
06:48years? Almost, presently it is 9,000 crore. So from 9,000 crore plus, it will double. Revenue
06:58also it will be double. Got it. Margin will be almost same 57% like that. So it will be double.
07:10It will be double. What about operational metrics, sir? You reckon that operational
07:14metrics could improve with capacities moving up in size or will they be steady?
07:22Yes, yes. Same, sir. They will remain the same. So EBITDA number growth will not be more than
07:27the revenue growth per se. No. Got it. The other question is CAPEX. I mean, the CAPEX that is
07:35envisaged in FY25, I believe about 12,000 crores and then the other CAPEX kicks on. Would you be
07:42sufficiently funded by debt and internal accruals or would you believe you will need to raise some
07:47equity capital, sir? During financial year 25, our CAPEX is 11,762 crore. Exactly. That we are going
07:59to meet through our internal accrual and through monetization of, through securitization of
08:09this free capital return on equity of Tulasi Power Station. So around we are expecting 2,000
08:16crore we will get from the Tulasi project and internal accruals. So we have planned our CAPEX
08:26in a way that we will fund it through our internal accrual. Got it. So nothing that you would want
08:36to raise via equity capital at all? No, no. Got it. Even we have planned till 2032 will be 23,000
08:48megawatt capacity and the total CAPEX infusion is almost more than 1 lakh crore. So that also we
08:58have planned through internal accrual, through our profit and through monetization. Got it. My
09:05final question, Mr. Chaudhary. We've spoken about some very impressive growth numbers in the next
09:11four years, but is it safe to assume that FY25 will not be a very strong year on growth because
09:18a lot of new capacities coming on stream are only happening late FY25? So FY25 would be flat
09:26and then growth starts from FY26? Correct, correct. You are right because our revenue is basically
09:35from the power generation. So generation will be almost flat because our capacity addition 800
09:44megawatt Parvati 2, it is getting completed during the month of December and commissioning
09:53of all the units so probably it is in January 25. So we will not get much power because almost
10:01February and March, two months we'll get the generation. But I will share with you that after
10:08the commissioning of Parvati 3, it will benefit the generation of the Parvati 2 after the commissioning
10:14of Parvati 2, it will benefit the generation of Parvati 3 also 1100 to 1200 million unit annually.
10:24So that is also going to add to our revenue. Suman Sildar, I mentioned that at the end of March,
10:32so we will not get any generation benefit during this financial year. So this financial year,
10:38we are expecting that it will remain flat and almost same generation and same profit,
10:45same revenue we will get. Got it. Okay. During the next financial year. I get your point. Okay.
10:54Okay, we'll leave it at that. Mr. Chaudhary, wish you all the best for all the capacities
10:59being added and more. Thanks for taking the time out and speaking to us. Thank you.