Keytakeaways of the conference call

Current generation capacity was 220 MW with the wind capacity being 179.5 MW spread over 4 wind farms. The company has 5 biomass plants with an aggregate capacity of 40.5 MW.

Power generated in 2010-11 was 364.5 million units of which the generation from wind assets being 211 million units and that of Biomas units being 153.5 million units.

Improvement in blended tariff realization from Rs 4.64/KWh in Q3FY2011 to Rs. 4.78/KWh in Q4FY2011 in Wind and biomass business.

Operational revenues for Q4FY11 grew by 34% to Rs 42.3 crore and the EBIDTA expanded by 179% to Rs 13.7 crore (up from Rs4.9 crore in Q4FY10). PBT was at Rs 1.5 crore as against a loss of Rs 8.2 crore. PAT was Rs 1.7 crore in Q4FY11 compared to a loss of Rs 7.7 crore in Q4FY10.

While the revenue of Biomass for Q4FY11 was Rs 23.489 crore (up from 15.445 crore) and its EBITDA was Rs 0.223 crore (compared to a loss of Rs 5.09 crore) as EBITDA margin stand at 0.9%. On the other hand the revenue of Wind business for Q4FY11 was Rs 18.827 crore and its EBITDA margin was at 70.5% (up from 61.9%)and EBITDA was at Rs 13.47 crore ( up from 10.00 crore). While the PAT (after MI) of Biomass for the quarter was Rs 9.27 crore (against a loss of Rs 10.29 crore in Q4FY10), that of Wind business was a loss of Rs 7.61 crore (against a profit of Rs 2.63 crore) in corresponding previous quarter.

For the quarter, the loss at net level despite good show at EBITDA level by wind business is largely on account of one time interest cost of Rs 5 crroe towards operating wind assets. This is not recurring in nature.

Operating revenue for FY2010-11 was Rs 197.513 crore (up from Rs 56.32 crore) with ths operating revenue of Biomass being Rs 94.08 crore (Rs 40.07 crore)and that of Wind being Rs 103.44 crore(Rs 16.15 crore). The EBITDA was Rs 89.84 crore (compared to a loss of Rs 0.42 crore) with the EBITDA of Biomass and Wind being Rs 5.48 (compared to a loss of Rs 10.43 crore) and Rs 84.36 crore (up from Rs 10.0 crore) respectively. The PAT was Rs 10.78 crore compared to a loss of Rs 16.64 crore in the corresponding previous period.

Current Wind capacity is at 179.5 MW and the units generated in FY2010-11 was 211 million units at a annualised PLF of 14.26%. PLF from current assets should average at 18-19% in a normal year. Lower PLF for the 2010-11 is largely on account of poor wind availability which led to lower wind generation across india which has been aprox 15-20% lower than the long term average.

With this PLF performance the equity IRR expected would be in the range of 17-20%.

Capacity additions of 87.2MW to be ready in Q1 FY 2012 in Tamil Nadu. Further addition in capacity by 68.4 MW by Q3 FY 2012 in Tamil Nadu. Due to infrastructure and evacuation issues associated with TNEB, the company has not committed funds for projects beyond 155MW in Tamil Nadu

In order to meet expansion targets originally set, it has become necessary to look at other attractive sites outside Tamil Nadu. Further capacities to come up in Andhra Pradesh, Maharashtra, Karnataka, Gujarat, Rajasthan and Madhya Pradesh (this is subject to shareholder approval) by next wind season in 2012

Currently about 152.92 MW of wind generation capacity sells to group captive and 26.25 MS is sold to SEBs. But the sale model for new assets will be mix of Group Captive / Third party sale – eligible for REC. Maharashtra projects may be on PPA

Current Biomass capacity is 40.5 MW. Power exported in 2010-11 was 153.5 million units at an average realisation of Rs 5.22/ unit. Improvement in blended realisation mainly on account of higher realisation from third parties with peak rate being Rs. 6.68 per Unit in Q4 FY 11.

Fuel cost per unit of generation in Q4FY11 was at Rs. 3.07 per unit as compared to first 9 months in biomass plants of Rs. 3.36 per unit. This has resulted in overall Fuel Cost being Rs 3.29/unit for 2010-11. And O&M cost for 2010-11 was Rs 1.05/unit.

While the overall biomass generation capacity addition planned for FY12 is 65.5 MW the company is expected to add about 37.5 MW in Q1FY12 itself.

Performance in Q4 FY11 was positively impacted with Chippabarod plant resuming operations and coupled with improved utilisation of all other plants resulted in growth of about 50% in generation over Q3 FY11. Chippabarod plant was not operational in Q3 and early part of Q4 due to turbine problems. It resumed operations in February 2011

Biomass costs - On the decline since Oct '10, trend expected to continue due to broadbasing of fuel sources and fuel mix. Average fuel cost down to Rs. 1,581/ ton in Q4 FY11 as compared to Rs. 1,658/ ton in FY 11.

New project commissioning – The Narasinghpur, Pollachi and PSR Green projects totalling 37.5 MW by end Jun'11. The 20 MW DY Patil Cogen plant is expected to be commissioned by end Q2 FY12 and that of the 8MW Kishanganj plant is by end of Q2FY12. Delay in some of these projects is mainly due to issues associated with connectivity to the grid. Of the new assets, the Pollachi biomass plant to be on PPA to TNEB while others are to be on merchant sale.

TNERC has cleared REC eligibility for export of power under Group Captive model. Once modalities are finalised this will result in improved tariff realisation for Wind Power. Since the wheeling charges for group captive supply is at concessional rates, if REC benefits comes in the concessional rates will not be there. Hence the REC benefits should be net of the additional wheeling charges to the tune of Rs 0.50-0.75/ unit.

Since there is no clarity on REC eligibility for sale to Group Captive the company has delayed registration and now with clarification came in the company has filed up applications in TN and Rajasthan for REC.

Biomass tariff changes expected from State Electricity Regulatory Commissions in Tamilnadu and Rajasthan as current control period is expiring in March '11. Representations made to State ERCs as well as CERC and process of revision is expected to be completed in Q1 FY 2012. Industry expectation of revision – Rs 0.75 – Rs 1.00 per unit. Potential for tariff revision due to increased biomass costs.

New wind assets coming up for commissioning will have a substantial higher PLF of 29-34% compared to around 18-19% of existing old assets.

Wind assets in SL and Croatio is progressing well and will be commissioned in H1FY12.

Since PPA for Biomass plant in abeyance in TN the company is able to sell on merchant basis facilitating.

Current wind season started of on good note but it's too early to give a outlook as last year there was early start to the wind season and petered out early affecting PLF of wind assets.

Replacing of older wind assets with newer high efficient one may happen after 2-3 years and not right now.

The company is looking for 2 large wind assets and 5 assets of small in size. The negotians are yet to conclude.

Lack of demand for REC in REC trade in April is largely on account of the factor as the discoms and other purchases have time till end of fiscal to fulfill their RPO obligations.