SJVN : Transcript of Conference Call held on Wednesday, 25th May, 2022 with Investors and Analysts to discuss financial results for the Quarter/ Year ended 31st March, 2022 (Q4, FY 2021-22)

"SJVN Q4 FY2022 Earnings Conference Call"

May 25, 2022

ANALYST: MR. RUPESH SANKHE - ELARA SECURITIES

MANAGEMENT: MR. N L SHARMA - CHAIRMAN AND MANAGING DIRECTOR - SJVN LIMITED

MR. AKHILESHWAR SINGH - DIRECTOR OF FINANCE - SJVN LIMITED

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SJVN

May 25 2022

Moderator:Ladies and gentlemen, good day and welcome to SJVN Limited Q4 FY2022 Earnings Conference Call hosted by Elara Securities Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rupesh Sankhe from Elara Securities Private Limited. Thank you and over to you Sir!

Rupesh Sankhe: Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q4 FY2022 conference call of SJVN. I take this opportunity to welcome the management of SJVN represented by Mr. N L Sharma - Chairman & Managing Director and Mr. A K Singh - Director Finance. We will begin the call with the brief overview by the management followed by Q&A session. I will now hand over the call to Mr. N L Sharma for his opening remarks. Over to you Sir!

N L Sharma:Thank you. Good afternoon to one and all. Our Q4 results and overall FY2022 results passed in the board meeting today. I am here to brief the audiences. Before the financial results, I would like to share some other key points. 1000 megawatt solar power project, which we got through competitive bidding under CPSC scheme. We awarded the contract to Tata Solar Power Limited, and today we signed the contract agreement with the bidder, Tata Solar Power Limited for about Rs.5500 Crore, it is for 1000 megawatt project. This will be installed Bikaner District of Rajasthan that is one, and about a week or 10 days back, we filed another MoU for one hydro project in Nepal that is Arun-4 project in Nepal this is of 490 megawatt capacity. This is third project of SJVN in Nepal and we got it in the same river basin Arun River basin. We are already executing 900 megawatt Arun-3 project and downstream to it Arun-3, rural Arun project of 669 megawatt capacity, we have already signed the MoU and then got the DKR approved from the government of Nepal, now this project is under process in India and we are confident that it will be approved very shortly in a month's time. These were the few points to be shared with you.

Regarding the results: Results of Q4 and the financial year 2021-2022, first I will brief about the overall yearly results of FY2021-2022. Talking about the revenue from operation has slightly come down. It is Rs.2421.96 Crores against Rs.2490.83 Crores last year, so there is decrease of about Rs.68.87 Crores. If you talk of the total income has fallen by about Rs.27.95 Crores. This is Rs.2625.5 Crores against Rs.2597.59 Crores. Profit before tax has registered a big fall. There are many reasons we can discuss during the course of interaction or discussion. The profit before tax for the year 2021-2022 is Rs.1343 Crores against Rs.1839 Crores, decrease of Rs.496 Crores. Then profit after tax has come down by

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SJVN

May 25 2022

about Rs.655 Crores. This the profit after tax is Rs.977 Crores against Rs.16733 Crores. This is because of the effect that last year we had got payment of net payment surcharge from many beneficiaries. The amount totals to about Rs.580 Crores LPS last year we got with PBT and PAT and all revenue from operations were on the higher side. The fall or decrease in the PBT or PAT is because of that amount. Moreover, there were some recoveries because of the CRP order for the Rampur Hydro Project the tariff order which we got. Some of the costs were not allowed by CRP, so we have to re-imburse the money to the DISCOM that amounts to about Rs.50 Crores and on that about Rs.20 Crores interest totaling to Rs.78 Crores total impact on the balance sheet is also there. The networth has listed an increase against Rs.12761 Crores last year now it has risen to Rs.13128 Crores. Generation even at top of generation during the last year is study or examine analyzed the generation in the four quarters. In the first quarter itself, there was a gap of around 348 million units because of the lesser discharge in the river, particularly the Sutlej River where two flagship projects are located, but in Q2, Q3, Q4 the generation as compared to last year quarters was on the higher side but the major impact of our 348 million units' gaps in the generation it was hard to recover. But because of the best operational exigency in the Q2, Q3, Q4, there is a marginal decrease in the total generation from all the projects. Last year the generation was 9223 million units this year, it is 9207 million units, so there is a decrease of about 16 million units only. There are many other good points that this year in one of our Sadla Wind Project, we crossed the figure of 100 million units. Last year, it was 73 million units. There is an increase of more than 25 million units generation. In the small solar project Charanka in Gujarat, this year achieved the highest ever generation so far from that project. On the other front plant availability sector of Nathpa Jhakri and Rampur hydro power station this year we achieved the highest ever plant availability sectors so far there is 106.6 Naptha Jhakri hydro power station and 106.36% for Rampur hydro power station.

Regarding the incentives: Total incentive registered an increase over the last year total incentives, total incentives include the effective incentive, EUI incentive then comes standery energy also. So, total incentives are Rs.298.66 Crores; of this Rs.272.53 Crores is an increase of Rs.26 Crores over the last year. When we talk of Q4, the generation, I was taking that in the last three quarters, there is increase in generation, so the total generation from all the projects there is an increase of 115 million units this year we generated 886 million against 771 million units last year, so there is an increase of 115 million units. Because of that LPS payment, which we received last year the financial numbers in some cases drastically low. The revenue from operations is low by Rs.142 Crores. Total income has decreased by about Rs.692 Crores, then our profit before tax has decreased to Rs.733 Crores and profit after tax decreased to Rs.614.56 Crores. This is about the financial numbers of the Q4 and the total financial year 2021- 2022. Thank you very much.

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SJVN

May 25 2022

Moderator:Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session.

N L Sharma: One inclusion I would like to add. We have already paid the interim dividend of Rs.1.15. Now, in this board meeting, the board decided to give another Rs.0.55 dividend, so total dividend for the year will be Rs.1.70 and this is about 5.01% of the Networth and it is more than 30% of the tax. We are complying to the government guidelines, DIPAM Guidelines as far as the payment of dividend is concerned. Total dividend of Rs.1.70 the board has decided and finally it will be ratified in the AGM.

Moderator:Thank you. Our first question from the line of Mohit Kumar from DAM Capital. Please go ahead.

Mohit Kumar: Hi! Good evening, sir. My first question is on the revenue for operations which has declined on, I am talking about quarterly revenues, why did it declined year-on-year from it has declined of Rs.460 Crores odd to Rs.320 Crores odd and also the finance cost it was Rs.30 Crores odd last while this year it is Rs.80 Crores and the depreciation is also higher year- on-year and what is this exceptional item?

N L Sharma: Yes Mohit. Definitely revenue from operation in the quarter has declined. There is a decrease of Rs.142 Crores, last year it was Rs.465 Crores this year is Rs.323 Crores. We have increased generation, but decreasing because of the CRP tariff order for Rampur project, one reason is the CRP order Rampur project.

Mohit Kumar: That impact is Rs.80 Crores, right?

N L Sharma: Yes, Rs.78 Crores impact is there. Last year it was Rs.104 Crores. This year though there is increase in generation, increase in sale of power, but if you take the impact last year it was Rs.104 Crores positive this year Rs.58 Crores impact of Rampur tariff. So, net impact, there are some other small things, which Rs.142 Crores total negative.

Mohit Kumar: Understood, and why the finance cost is higher in this quarter?

N L Sharma: Finance cost is because of the rate in foreign exchange currency rates.

Mohit Kumar: That amount must be coming in the net movement in regulatory deferral. Is that right?

N L Sharma: Part of the amount is coming. In regulatory deferral account on world bank loans, but we have taken ECV also for financing our solar project and upcoming project. That some part will go to CWIC and some part will be charged to SJNL account. The break of Dollar loan;

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