EMMVEE — earnings call

The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.

Prepared remarks

Moderator · Conference Operator

Mrs. Vinita Pandya (Raadhi Capital)

Good afternoon, everyone.

We are just starting the meeting in a minute.

Waiting for people to log in.

The next question is from the line of Sahil Sheth from Anand Rathi.

Sahil, I'm getting you on screen.

Please unmute yourself and go ahead.

Sahil Sheth

Hi sir, congratulations on the good set of numbers.

So, my first question would be if I look at the production number and the revenue number, the blended realization for module has decreased significantly even on a year-on-year basis or a quarter-on-quarter basis.

Is this because of a change in your sales mix between DCR and non DCR or are there any pricing pressures you are experiencing in the market right now?

Mr. Suhas Donthi

No, you're absolutely right.

I mean there is no pricing pressures in the market which basically is seen by our EBITDA that we have shown.

It is because of the percentage mix of your DCR and non DCR.

Moderator · Conference Operator

Thank you.

The next question is from the line of Abhi Sehgel from Singularity AMC.

Abhi you on screen or please unmute yourself and

Abhi Sehgel

Hi sir congrats on the great set of numbers.

I have a two-part question first being can you share some light on the current DCR pricing and where do you see the trend going let's say in the next year by the next year same time and second being you mentioned by FY28 you will have around 16.3 GW of module and 8.9 GW of cell that would give you around 3 GW of excess module so do you think around FY 28-29 there would be still some module only demand in the market.

Mr. Suhas Donthi

So, thank you sir thanks for the question.

The first question about the DCR price realizations, DCR price realizations today are about 24 – 24.5 cents per watt when we're looking at on like you know significantly decent size of orders like you know not I'm not talking about like retail spot orders that will be on a much higher price realization This is on a bulk order basis it's about 24- 24.5 cents and when we look at and that pricing that we have not seen so far change downwards but you know but again our efficiencies are increasing and you know our cost economics are getting better that is one thing that significantly helping which you can see because in our efficiencies if you see we started off with 24.5% efficiency today we're at 25.2% efficiency and that is a growth that we have seen.

Next is and then you know moving to your next question which is about the gap between module and cell.

So, this if you see that it's kept in intentionally basically like you know module capacities have a tendency of peak utilization to be at 60 to 65% whereas cell will be about 85 to 90%.

The reason is what happens is in module it's an inline production whereas cell is a batch production.

Module is a made to order product whereas cell is a made to stock product.

So, for these reasons we have made sure that we keep our module capacity slightly higher than cell capacity so more or less effectively my production will be similar where I'll have almost 100% of the cells for my module capacity.

Abhi Sehgel

So, you're saying cell would be at 80% of the name plate capacity 80% utilization of name plate capacity.

Mr. Suhas Donthi

85 to 90% of the effective capacity

Moderator · Conference Operator

Thank you, the next question is from the line from Prakhar Porwal from Ambit Capital.

Prakhar Porwal you're on screen.

Please go ahead.

Prakhar Porwal

Thanks.

Congratulations on good set of on this.

So two questions one is firstly on the order book if I see we've got this 4.5 GW cell order but bearing that on non-DCR or DCR modules there has been very limited growth even in the first 9 months of the year so do you see that as the concern or do you see that picking up in later maybe part of the year

Mr. Suhas Donthi

The inflows if you see is going well for example if you're looking at the 9 months for example if we have seen an increase in the we are not only seen the increase in order book but we are also

Moderator · Conference Operator

Thank you.

We'll take next question from the line of Udit from Pinpoint X Capital.

Can you unmute yourself?

Udit

Yeah, Good afternoon.

So, sir you just mentioned about the DCR panel prices.

So, what is the difference right now between the DCR cells, the DCR panels and the non-DCR cells and panels and do you see any pricing pressure on these?

Mr. Manjunatha DV

So, there is no price pressure sir.

Both are as you know that it is all passed through this thing.

It is around 5 to 6 cents, the max is 7 cents.

Difference is on the retail, and the retail will be around 7 cents and the bulk orders is around 6 cents.

Udit

This you mean to say between the DCR and the non-DCR panel.

6 cents is the difference.

Mr. Manjunatha DV

Yeah.

6 to 7 cents.

Udit

Okay.

And with the cell capacities coming up you know in India do you have any update on the ALCM mandate whether it's going to come is it going to be delayed and do we have sufficient capacity for it?

Moderator · Conference Operator

Thank you. the next question is from the line of Deepak from Swan Investments.

Deepak, I've got you on screen.

Please unmute yourself and go ahead.

Deepak

Yeah.

Hi, good evening, sir and congratulation for very good set of numbers.

Sir, firstly, wanted to check it out on the China point regarding removing of export rebate would it also open up export market for the Indian player as a whole how do we see that development even beyond US market.

Mr. Suhas Donthi

So when we talk about export markets is something that we are we continuously keep evaluating and I think that is something that we probably will have to like you know still see what is the capabilities but we are seeing more markets that open up for example in Europe there are regulations that mandate about 10% of their capacities to be used from non-China cell and module that probably that also includes the non-China Chinese ownership also for example Italy is the country that started it and ratified that bill and that is further going to get extended to Germany also and many countries going to follow after that.

So, there are some opportunities that will open up but I think this probably could be a little early to case that but you know in currently like our focus strongly remains on the domestic market but we have a strong team in the US as well as in Europe to see any opportunity that comes in.

We can see that.

Moderator · Conference Operator

Thank you. the next question is from the line of Shashank Jha.

Shashank, I've got you on screen.

Please unmute yourself and go ahead.

Shashank Jha

Yes, sir.

My question was regarding the capacity.

So, basically, I have done my research and found that in India after 2028 accumulative capacity will be around 180 GW for module combining all the listed and non-listed players and 140 GW for cell.

Okay.

So, my question here is that after FY28 that is FY29, FY30 will there be that much demand in India?

Mr. Suhas Donthi

Yeah, I think that's a very valid question sir and I think it's an important question to address also.

So, I'll just take this in couple of different scenario.

So, basically one we are talking about 180 or 140 GW of capacity.

Let us keep module aside.

Let us only talk about cells because cells capacity is what is going to be relevant.

So 140 gigawatt of capacity we are talking about by FY28 and this includes a lot of new capacities, I mean people who have not have the experience of cells and lot of announcements that have made, and I think last time when we checked the publicly available data in May, that time it was about 12 to 15% of the capacities that were announced had no progress after even 3 years of announcement.

So that is one point that we had seen.

Then what is also going to be the biggest differentiator is how much of this capacity is going to come in and how much of this capacity is going to be able to transition to make good quality cells, because manufacturing cells is not easy, not only about the high capex but the complexity of the process and this we have seen that lot of different approaches are being

Moderator · Conference Operator

Shashank, can I please request you to come back in the queue?

Shashank Jha

Okay.

Yeah, please say those numbers, sir.

Sir, please.

Mr. Manjunatha DV

Sure, sir.

Sure.

Moderator · Conference Operator

Okay, we'll take the next question from the line of Vinay.

Vinay, please unmute yourself and go ahead.

Vinay

Yes sir.

First of all, congratulation for the excellent numbers.

I had just one question that with respect to the raw material prices such as silver or maybe the cell which is basically imported in US dollars, the input cost being rising, what will be the effect you know the overall the pricing of the finished goods.

How much do you see going up due to this also due to this China rebate cut there must be some kind of hoarding rush.

So, all these factors considering what will be the overall cost that will be going up and the final cost of the products also going up from here.

Mr. Suhas Donthi

Yeah. sir I think basically like the way we look at things we basically like for example USD is something that for us it's all passed on because what happens is all our key contracts set we take all key account contracts everything is done in US cents so at only at the time of execution we change it to INR we bill it in INR but orders are all taken in US cents so whatever exchange rate is all passed on to the customer and when it comes to the rebate as I addressed this in my previous, both rebate and silver price, I've already addressed this in the previous answers but I'll just say it again.

Silver for example with improved technology, improved process R&D, improved adaptation of the latest screen designs process and silver paste we are able to reduce our silver paste consumption.

As in from what we are currently consuming, we used to consume two times of that silver paste earlier per cell.

So, this has all kept the cost in line where we are not seen the effect and we further are aiming to reduce the silver paste consumption by another 40%.

So, these things will further like you know strengthen our costing and that is with

Moderator · Conference Operator

We take the next question from the line of Utsav from One capital.

Utsav, please unmute yourself and go ahead.

Utsav

Yeah, thank you.

Thank you for the opportunity, sir.

I know, silver has been addressed couple of times, but I just want to again get some clarification on it.

Let's say 6 months back silver was around 0.7 cents, as part of the total module cost and today it's close to 2 cents like you mentioned earlier.

Have we taken any, price hike in the DCR module segment because of this or are we observing this change in silver price?

Mr. Manjunatha D V

This number 0.7 cents I don't know how you got it because earlier as also it is around 2 cents only it is 1.75 to 2 cents where you got from the 0.7 I don't know because even if you see the Consumption of silver paste earlier is around between 185 to 200 mg.

With 1 lakh rupees it comes to 2 cents only I don't know where you got it that number and today also it is same because of our process improvement and the consumption come down

Utsav

So today would it be fair to understand it's 9 mg per watt peak or would it be higher than that.

Moderator · Conference Operator

Thank you. the next question is from the line of Nikhil Abhyankar.

Nikhil Abhyankar, please unmute yourself and go ahead with your question.

Nikhil Abhyankar

Hi sir, I just have a couple of questions.

So, I was just going through your presentation.

I saw that your Quarter on quarter the cell production is up by almost 100 MW but it is not exactly reflected in our EBITDA growth.

Q -Q growth is around 10-12 cr. So just can you highlight that and why exactly is it so?

Mr. Manjunatha D V

Yeah.

Okay.

So, the 100 MW is improvement on the production because that you know that whatever production we do will not be able to sell in the same quarter itself.

It will be going to be also move into the next quarter.

So that whatever we have produced that will continue to be there in the coming months.

That results you can see in the coming quarter.

Moderator · Conference Operator

Thank you.

The next question is from the line of Bharti.

Bharti, please go ahead with your question.

Unmute yourself.

Yes.

Yes, ma'am.

Please.

Bharti

Right.

Right.

Thank you.

Thank you so much, sir.

Sir, can you throw some light for the renewable sector as a whole beyond FY28?

Some kind of qualitative commentary because one of the binding constraints on ground today is that the risk shortfall in grid and transmission capacity, right?

Grid expansion is dragging generation. some kind of PPAs are not getting signed leading to project delays, project offtakes are getting delayed.

So, what kind of visibility do you see in the evolving in the ancillary infrastructure how is it evolving beyond FY28?

Thank you, sir.

Mr. Suhas Donthi

Thank you ma'am.

I mean when we are looking at the renewable sectors and the infrastructure for that we're already seeing best integration that is happening apart from like earlier what we used to see standalone solar or just solar and wind being the way of tendering or installations that are being taken place.

Today we are seeing solar plus BESS and solar plus BESS up to 6 hours of storage.

Yesterday, I think the tender closed at 3 rupees 11 paisa which is extremely low compared to even coal or thermal or even so like you know any capacity any particular energy source.

With that kind of a scenario that we are getting into I think grid stability or the pressure on transmission lines is something that you will not see.

There is just go there is positive here is that there is a realignment of the kind of demand that there is going to be which is very good for the industry as well as for the sector.

Bharti

Okay sir, the kind of tendering do you foresee beyond FY28 for the projects?

Mr. Suhas Donthi

Absolutely.

I mean tenders are going quite well.

I mean that I think will happen in a good phase.

So there is quite a good backlog also that is there and further tendering also will catch up for that pace because the thing that we have to all as a country solve is to give power for the requirement that there is and that is something that is that I don't think anyone is seeing a slowdown at

Bharti

Noted sir.

Thank you so much and all the best for the future.

Thank you.

Moderator · Conference Operator

Thank you.

Next question is from the line of Aritra Banerjee.

Aritra, please go ahead and unmute yourself.

Thank you.

The next question from the line of Yogesh Patil.

Please go ahead and unmute yourself.

Yogesh, can you unmute yourself?

Yogesh

I'm audible.

Moderator · Conference Operator

Yes, you are.

Please go ahead.

Yogesh

Thanks for taking my questions. sorry but again I'm going back to the silver.

A small understanding silver 185 mg to 200 mg in the current consumption per module per cell.

Will it be possible for you to provide a silver paste consumption per Watt basis or any thumb rule of silver paste consumption per watt basis?

Mr. Suhas Donthi

Sir I mean so basically the reason why we are not giving you the silver paste consumption per cell or per watt because these are all done by process R&Ds and a lot of technical upgradations and material upgradations are taking place.

So, because of the sensitivity of that information, we would restrict from giving that information out but maybe there could be a publicly available information that is there that we can find and send it to you if there is any.

Yogesh

There is some rule for silver paste consumption per watt basis.

Any publicly available data as per your understanding

Mr. Suhas Donthi

I mean so basically, I think what we told that time is that it's about 2 cents is the silver paste per watt so based on that you can probably calculate what the consumption levels are at.

I think this is something that we told.

Moderator · Conference Operator

Yeah.

Thank you.

Due to time constraint, we are just taking the last question for the day from Aman Jain.

Aman, please go ahead and unmute yourself.

Mr. Suhas Donthi

Yes, you're audible.

Yes, you are.

Please go.

Aman Jain

Yes. yeah, sir, I understand that we have talked about this quite a few times now about the silver cost, but I just wanted to ask one follow-up question.

I mean, in the last four five months, silver cost has more than doubled and you were saying that with technologically advancements, we have reduced silver consumption so much that it has almost negligible effect on our cost.

So does that mean we have brought down silver consumption by more than 50-60% in just you know in the last 3-4 months only.

Mr. Manjunatha D V

Yes sir.

Aman Jain

Is that the case?

Mr. Manjunatha D V

Your understanding is 100% perfect.

Aman Jain

Okay so it has been so advanced, and we are expecting another 40% reduction going forward from here.

Moderator · Conference Operator

Thank you.

That was the last question for the day.

I would now request Mr. Manjunatha to give his closing remarks.

Thank you and over to you sir.

Mr. Manjunatha DV

Yeah.

Thank you everyone for joining us today and for the thoughtful questions.

We value the time you spend with us each quarter and we appreciate the trust you place in Emmvee.

Your questions and feedback help us to stay focused and improve how we communicate our progress.

If you have any follow up after the call, please reach out in our investor relation team using the contact detail shared.

We will also continue to keep the market update through our disclosures.

Thank you again for your continued support.

We look forward to speaking with you again next quarter.

Moderator · Conference Operator

Thank you once again and for your time and participation.

On behalf of Emmvee Photovoltaic Power Limited, this concludes today's conference.

For any questions, please feel free to write to us on the email ids mentioned on the invite.

We appreciate your engagement.

And now you may disconnect your lines.

Disclaimer

"This transcript is an edited version of the conference call recording and has been prepared for ease of reading and clarity.

Certain immaterial corrections, formatting changes and corrections of obvious transcription or numerical errors may have been made, without changing the overall meaning.

Readers are advised to refer to the audio recording and the results filed with the stock exchanges for full details, and the company accepts no responsibility for any remaining errors or for any decisions taken based on this document.”

Questions and answers

Moderator · Conference Operator

Thank you.

We'll start with the Q&A.

The first question is from the line of Mr. Subramanyam Yadav.

Mr. Subramanyam, please unmute your line.

You're on screen.