NAVA — earnings call

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Prepared remarks

Moderator · Conference Operator

Ladies and gentlemen, good day and welcome to the NAVA Limited Q4 & FY25 Earnings Conference Call hosted by ICICI Securities 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 an operator by pressing “*” then “0” on your touch tone phone.

I now hand the conference over to Mr. Mohit Kumar from ICICI Securities.

Thank you and over to you, sir.

Mohit Kumar

Yes.

Thank you, Sruthi.

Good evening.

On behalf of ICICI Securities, I welcome you all to the Q4 FY25 Earnings Call of NAVA Limited.

Today, we have with us from the Management Mr. Ashwin Devineni – CEO, Mr. GRK Prasad – Executive Director, Mr. Nikhil Devineni – Executive Director, Mr. K.V.S.

Vithal – CFO and Mr. VSN Raju – Company Secretary.

We'll begin with the opening remarks from the Management, which will be followed by “Q&A.” Thank you and over to you, sir.

Ashwin Devineni

Thank you.

Good evening, everyone and thank you for joining NAVA Limited Earnings Call for the 4th Quarter and the Full Year-ended March 31st, 2025.

We appreciate your continued interest and support.

For FY25, NAVA group delivered multiple milestones.

Our consolidated revenue was INR 4,135 crores at a year-on-year growth of 4.6% and a PAT of Rs.1,434 crores.

Our revenue and profit for the year are the highest ever.

All our major segments, Metals, Mining and Energy have shown robust growth as compared to last year.

Ferroalloys business turned around and contributed to the improvement in the profit in FY25. We have also seen significant improvement in MEL's receivables position.

Post the close of the financial year MEL received US$ 55 million, which has helped it repay its shareholder loan in full to the sponsor.

With an objective to improve shareholder value, we completed two corporate actions during the last financial year - a stock split in Quarter 3 and a share buyback for Rs.360 crores in Quarter 4.

In addition to these, we continue to maintain our dividend distribution at a healthy rate.

Our new projects under Maamba Solar, Nava Avocado and Kawambwa Sugar are showing increasing progress.

Nava Ltd

Moderator · Conference Operator

Thank you.

The next question is from the line of Mr. Shrikrish Agarwal an individual Investor.

Srikrish Agarwal

Good Afternoon Gentlemen, my questions have been answered, please go ahead.

Moderator · Conference Operator

Thank you.

The next question is from the line of Nidhi Shah from ICICI Securities.

Nidhi Shah

Yes, thank you so much for taking my questions.

So firstly on the solar power plant at Maamba, I wanted to know what is the cost of that plant and at the same time, do we have a tie up for Q1 for that 150 MW or not?

Ashwin Devineni

Your first question was on the total cost of the solar.

So the project cost we envisage is US$90 million, US$63 million would come in the form of debt and US$27 would come in the form of equity.

What was your second question?

Nidhi Shah

So on the 150 MW power plant, I wanted to know if we have a tie for Q1 for that?

Nikhil Devineni

Yes, I think for the 150 MW, we have been looking at entering into short-term bilateral contract, of which we have a commitment until September.

Nidhi Shah

Alright.

And lastly, I wanted to know what is the update on the construction progress of the 300 MW expansion.

Ashwin Devineni

Yes, it’s progressing well and we are still sticking to the original schedule of commissioning in August 2026.

Nidhi Shah

Alright.

I will get back in the queue for further questions.

Thank you.

Moderator · Conference Operator

Thank you.

The next question is from the line of Viraj Mahadevia from MoneyGrow.

Please go ahead.

Viraj Mahadevia

Hello.

Hi.

Congratulations on the shareholder value-enhancing measures.

The 7.5 cents per kWh for the new plant is actually lower than the old plant.

Is that correct and if you can throw some light on that?

Ashwin Devineni

Yes.

The tariff for solar is actually 7.8 cents.

That's the tariff that we have negotiated.

That kind of escalates year-on-year.

Yes, it's less than, I mean the tariffs we are getting for the coal-fired power plant, which is normal.

Viraj Mahadevia

7.5 cents is for the Zambia Solar, is it?

Ashwin Devineni

Yes, 7.8 cents for the Zambia Solar.

Nava Ltd

Moderator · Conference Operator

Thank you.

The next question is from the line of Anand from CIL.

You may proceed.

Thank you.

The next question is a follow-up question by A.M.

Lodha from Sanmati Consultant.

You may proceed.

A.M. Lodha

Hello, Sir I have got two questions.

One is relating to your maintenance shutdown for MCL which happens to be every two years?

When it is next due sir?

Ashwin Devineni

We have two shutdowns annually.

So we take one half yearly which span across 15 days per unit and then we have a major shutdown which spans once every four years and that shutdown we are probably going to be taking during the early part of 2027.

A.M. Lodha

'27, Okay.

The second question is other income in standalone has jumped from Rs.79 crores to Rs.188 crores.

What component has increased by Rs.100 crores?

A jump of Rs.110 crores.

KVS Vithal

In the standalone other income constitutes the dividend from the subsidiaries.

So like in the last financial year, we have received dividend from two subsidiaries.

So in standalone it is shown as other income.

Those two dividends put together is Rs.110 crores.

A.M. Lodha

Okay, sir.

Thank you.

Moderator · Conference Operator

Thank you.

The next question is from the line of Radha from B&K Securities.

You may proceed.

Radha

Hello, sir.

Thank you for the opportunity.

I wanted to thank you for the buyback and high dividend payment.

My first question was until the commissioning of Phase-II of Zambia, which is expected to be in first half of FY27, is there any incremental earnings growth driver for the company as tax also is expected to increase to 15% because of the expiry of tax holiday hence wanted to know your thoughts on the earnings growth for the near-term?

KVS Vithal

No, just to clarify on the tax holiday, we also mentioned this previously in the call, the tax holiday will continue till end of Financial Year ‘26, post which we will get into the second slab of 50% exemption for the next three years.

Radha

So, till FY26 it will continue, then FY27 like you had previously mentioned for two years 75% exempt?

KVS Vithal

Yes, from FY27 onwards it will be 50% exempt for three years.

Radha

Okay, got it.

A bit more on the earnings growth driver for the near-term?

Nikhil Devineni

Yes.

I think on the standalone level in terms of ferroalloy division, we foresee a better scenario for FY26 than for FY25, mainly because we are seeing that the product diversification into ferrosilicon Nava Ltd

Moderator · Conference Operator

Thank you.

The next question is from the line of Shree Gopal Kankani from S.G.

Kankani & Associates.

Shree G Kankani

Good afternoon, sir.

My question is that in spite of energy revenue operations almost constant in the March quarter as compared to the December '24 quarter, the profit has come down from Rs.351 crores to Rs.296 crores in the March quarter.

What is the main reason sir?

KVS Vithal

So you're referring to the Maamba reduction in profitability?

Shree G Kankani

No. If you see the consolidated accounts, consolidated revenue from energy operations is almost constant in March '25 quarter Rs.834 crores as compared to Rs.833 crores in December '24 quarter.

While the energy revenue is almost same as compared to previous quarter, however, if you see the Nava Ltd

Moderator · Conference Operator

Thank you.

The next question is from the line of Faisal Hawa from HG Hawa.

You may proceed.

Faisal Hawa

There was an announcement that we are getting into lithium mining also in one of the African countries.

Is there any progress on that and would it make a material difference to the balance sheet and the profit & loss of the company in future?

Ashwin Devineni

We basically are exploring lithium concessions that we have been granted i.e., MEL has been granted, we have about 11,000 hectares that's been granted.

So exploration activities for lithium is currently underway.

So it's at a very early stage right now to finalize any future plan in terms of what our involvement would be.

Faisal Hawa

So which country is this?

Ashwin Devineni

Zambia, the subsidiary of Maamba.

Faisal Hawa

So is there a fair chance that there could be a good amount of lithium in that area?

Ashwin Devineni

I wish I could answer that.

If I could answer that, we wouldn't need to do any exploration activities.

So the whole point of exploring is to figure out what the quality of the lithium in the concession is and if it's commercially viable to mine.

Faisal Hawa

With the low cost of solar falling so dramatically, are any of these African governments also encouraging you to put up solar plants and successfully giving them the power?

Ashwin Devineni

Yes.

So, I mean, the current initiative we've taken which is the 100 MW solar plant, was encouraged by the government and hence we closed the power purchase agreement also at an attractive tariff.

So, there is encouragement from Zambia and other African countries for the companies to put up solar plants.

Faisal Hawa

And sir, if you could give some kind of a vision for the next two to three years, so where do we see our revenue and profitability for the next 3 to 4 years and particularly in light of the recent buyback that we did in absolutely adverse market conditions, which I would really congratulate the management, we were amongst only two or three companies which did buy back during that time, so how do you see the next two to three years panning out in terms of revenue and profitability?

Ashwin Devineni

Well, I think we currently have a very strong ongoing operational base, both standalone and internationally.

So, I think we would see all the current operating assets that we have performing well in the next two-three years.

Apart from that, I think you would start seeing some added revenue from the projects that are currently underway, which the solar we are looking at commissioning by July Nava Ltd

Moderator · Conference Operator

Thank you.

The next question is from the line of Anand from CIL.

You may proceed.

Thank you.

Due to time constraint, that was the last question.

I now hand the conference over to the management for closing comments.

Ashwin Devineni

As we conclude, I would like to reiterate that NAVA Limited remains focused on maintaining operational excellence, delivering value to our shareholders.

We are optimistic about our future growth prospects and will continue to strengthen our position in our key business sectors.

Thank you for your time today and we look forward to your continued support.

Moderator · Conference Operator

Thank you.

On behalf of ICICI Securities Limited, that concludes this conference.

Thank you for joining us and you may now disconnect your lines.

Nava Ltd

Questions and answers

"NAVA Limited

ANA RAJU · Research Analyst

MR. ASHWIN DEVINENI – CHIEF EXECUTIVE OFFICER.

MR. GRK PRASAD – EXECUTIVE DIRECTOR.

MR. NIKHIL DEVINENI – EXECUTIVE DIRECTOR.

MR. K.V.S.

VITHAL – CHIEF FINANCIAL OFFICER.

MR. VSN RAJU – COMPANY SECRETARY

Moderator · Conference Operator

MR. MOHIT KUMAR – ICICI SECURITIES LIMITED Nava Ltd

Thank you, sir.

We will now begin the question-and-answer session.

If you have a question, please press * and 1 on your touch tone telephone and wait for your turn to ask the question.

If you would like to withdraw your request, you may do so by pressing * and 2.

Participants are requested to limit the number of questions to 2 and rejoin the queue for further questions.

Ladies and Gentlemen, let us wait for few moments until the question queue assembles.

The first question is from the line of A.M.

Lodha from Sanmati Consultants.

A.M. Lodha

Good afternoon, gentlemen.

Congratulations on the good set of numbers.

I have got two questions, Sir.

Number one is relating to your tax provision.

Your tax provision in standalone is Rs.27.44 crores in Quarter 4 whereas consolidated it is only Rs.6.39 crores.

According to me, your tax exemption in MCL should have been expired in this December '24.

So in March quarter '25, MCL would have been required to pay 50% of the normally applicable tax.

That is a rate of 35% in MCL.

Please clarify this.

Second question is on writeback.

You have written back some Rs.

47.52 crores out of the earlier provision made for the credit loss.

So, I wanted to know how much amount is still pending to be written off when the amount will be received from the MEL for the arrears.

KVS Vithal

Yes.

So, from a perspective, we still have $105 million, which is pending to be collected and the corresponding ECL provision that is existing in the books is $16.8 million.

On the tax rate, Quarter 4 for the consolidated, the tax expense is Rs.21 crores as per the financial statement.

And the MEL tax exemption that you have said, that tax difference continues till the end of Financial Year ‘26.

And only after that we get into the next regime of 50% tax exemption for three years.

So we are still in tax exemption for every year even for the next financial year.

A.M. Lodha

100% tax exemption for next financial year?

KVS Vithal

Yes, that is right.

A.M. Lodha

It was five years from the date of commencement of the business.

GRK Prasad

From the date of commencement of taxable income, that is after adjusting the investment element.

KVS Vithal

We will have it up to the end of Financial Year ‘26.

A.M. Lodha

Okay, Sir.

Thank you very much.

I will rejoin the queue.

Nava Ltd

ANA RAJU · Research Analyst

Sir, congratulations on the wonderful set of numbers.

The first question is that do you have any tax concessions on the Phase-II of the project, sir?

Ashwin Devineni

At this point it is not there, but we would probably go for that kind of a tax relief once the plant is commissioned.

This actually will get kicked in, in about three to four years from the date of commissioning post the investment being absorbed by the company.

ANA RAJU · Research Analyst

Okay, Sir.

Also, like how many years of the PPA?

Ashwin Devineni

The PPA is for 20 years.

ANA RAJU · Research Analyst

And how many years is remaining, sir?

Ashwin Devineni

Phase-I PPA started in 2016 for 20 years.

So we have 12 years to go.

ANA RAJU · Research Analyst

Okay.

And like, what's the deadline for the solar plant that we have set internally?

Ashwin Devineni

Yes.

So we are looking at commissioning it possibly by July '26.

ANA RAJU · Research Analyst

Okay, sir, I will come back in queue for further questions.

Thank you.

Moderator · Conference Operator

Thank you.

The next question is from the line of Vijay P, an individual Investor.

Vijay P

Good afternoon.

I will begin with congratulating Mr. Ashwin Devineni on his designation as the Managing Director of the company and Mr. Nikhil Devineni to join the board as Executive Director.

My first question is for Mr. Ashwin Devineni.

The press release was silent on the 300 MW power plant expansion, but then people have asked the questions already and most of my queries are answered.

There is no mention about the Ivory Coast project of manganese mine and the ferroalloy plant and further concessions received in Zambia for critical minerals, etc., in iron ore.

Could you please elaborate on that?

Ashwin Devineni

I think I will let Nikhil answer the Ivory Coast question.

Could you repeat the other question please?

Nava Ltd

ANA RAJU · Research Analyst

Hello, sir.

Thank you for taking my question again.

There is a target that you have put like in one of the presentations I was reading that we are going to increase external sales of coal mine from 40,000 tons in 12 to 15 months.

So what kind of sales like are we targeting and the capacity of the mine, sir?

Will this mine be able to suffice the coal requirement for Phase-II of the power plant?

Ashwin Devineni

Yes.

So in terms of supplying coal for Phase-II, definitely, because we would not have started with the Phase-II project if we didn't have the coal and for the fuel security.

We have a very large concession area and we have ample coal for both Phase-I, Phase-II possibly even Phase-III and any amount of outside sale.

With regards to any specific target for external sales, we are essentially targeting about 35,000 tons on a monthly basis.

Today, we have other competing coal mines.

So, there are challenges that are involved, but as far as our external sales are concerned, we are doing fairly well.

But if you look at the target, it's about 35,000 to 40,000 per month.

ANA RAJU · Research Analyst

Okay.

You talked about converting your power plants to IPP.

So will that not reduce the alloy production because you're converting your power and you're selling it to the grid?

Nikhil Devineni

It won't because right now in Odisha we have two furnaces which require a maximum of about 30 MW.

So that will remain intact.

The additional 60 MW which is also under captive right now, is now being transferred to IPP.

So there won't be any change to the ferroalloy operation.

ANA RAJU · Research Analyst

Okay.

Thank you, sir.

Moderator · Conference Operator

Thank you.

The next question is from the line of Radha from B&K Securities.

You may proceed.

Radha

Hi, sir.

Thanks again.

So for the 100 MW of solar plant in Zambia, could you highlight whether the terms and conditions will be similar to the Phase-II of Zambia power plant and whether any tax benefits will be there, when will it be commissioned and what is the expected PLF in this plant?

Ashwin Devineni

Yes.

So I mean in terms of the commissioning of the plant or not, I think I have repeated myself multiple times during this call.

We are planning on at least the date is July 2026.

This is a solar plant and the other plants are coal plants.

So there are certain similarities and there are certain differences as the terms and conditions that we negotiate with the government.

Nava Ltd