Clean Max Enviro Energy Solutions Ltd (CLEANMAX) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to Clean Max Q2 FY '27 earnings conference call. 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 star then zero on your touchtone phone. Please note that this conference is being recorded. On the call we have today, Mr. Kuldeep Jain, Founder and Managing Director, and Mr. Nikunj Ghodawat, CFO. I now hand the conference over to Mr. Kuldeep Jain, Founder and Managing Director of Clean Max. Thank you, and over to you, sir.
Kuldeep Jain (Clean Max Enviro Energy Solutions Ltd): Thank you everyone for joining. We are delighted to host this conference call. What we will do is I will present the first section about the highlights for the last quarter as well as the business update. So, starting with the highlights for the quarter itself. So, overall, you know, we have now 6.3 GW of RE contracted power sales, out of which our the power sales which is operational is about 3.6 GW and another 2.6 GW is contracted and under execution. And in the first half of the year, we have commissioned around 600 MW of capacity on the RE power sales segment. In terms of financial highlights, for the first half of the year, as we see here, we had about Rs. 1,047 crore of EBITDA.
Kuldeep Jain (Clean Max Enviro Energy Solutions Ltd): as opposed to 670 crores in the corresponding time period last year, and, and a 553 crore EBITDA for, for the quarter itself versus 386 for the corresponding period last year. So, overall we had in the first half of the year, about a 56% EBITDA growth. And I was quite delighted, I was on a CNBC interview prior to this. I didn't realize, but it's substantially above the, the sort of analyst estimates is what they were also informing me. Then the weighted average cost of debt has continued to, to fall and is now stands at about 8.3%. And we're delighted to be credit rated as AA Stable in the last quarter by CRISIL. And that brings us on par with leading industry names, such as JSW Energy, as well as Adani Green, who are also rated at AA Stable. And our profit after tax has risen about sixfold of, of, admittedly, of a low base, of about 120 crores in the first half of the year from 19 crores in the corresponding period of last year. Moving on, as I mentioned, we added 600 MW of capacity. And it's about 80% of our capacity addition are in our four largest markets, which are the four largest industrial powerhouses, which is Gujarat, Karnataka, Maharashtra, and Tamil Nadu. And in this last six months, about 80% of our capacity were, were in those four geographies. And on an overall basis, also those four states account for roughly about two-thirds of our capacity in aggregate. So, you know, it's reasonably well spread out. And of course, within each state, the capacity addition may be spread across multiple sites. And every power purchase agreement itself will be about 30 MW or thereabouts. So, there will be a lot of customer diversification with it. Now, this is a standard table we always present, which and I'll explain how to read it. There are four buckets to it. First is renewable energy power sales capacity. So, the operational capacity here is about you know, what's 17-12 MW as of March '25, has risen, has risen to 3100 MW and is now about 3600 MW. So, in the last six months, we've added to this number. We've got a healthy contracted yet to be executed capacity. The way I look at it is, if we are adding at 1,500 MW a year, 2,600 MW or thereabouts of capacity represents roughly about 20, 21 months of next growth. Right. So, we've we've been successful in continuously ensuring that the pipeline translates into revenues by by ensuring that you know, the operational capacity is what is getting ramped up. The And then we have an RE services segment, which also has about 830 MW operational. Then we have evacuation received, which means that this is the raw material available for us for future growth. This is about 3,200 MW, was about 1,100 MW 18 months ago, so it's about a three time growth in the past 18 months. And once Just to to explain how to read this table, once we have a contracted PPA, the firm evacuation moves into the bucket of firm contracted capacity, up there. And then the last bucket is evacuation we've applied for, which is as of 30th September, stands at about 2,800 MW. And over time, as this matured, it becomes evacuation received. And as customer sign up against it, it becomes contracted under construction capacity. So, we've had a healthy growth across all these four buckets: both the revenue, the the contracted under execution, the evacuation received, and and evacuation applied for. And the sum total, which is the aggregate portfolio size has now risen to about 13,200 MW, as of 30th September 2026, which contrasts with 18 months ago, this was about 7.8 gigawatts. Right. So, it it reflects The increase reflects our confidence in in continuing growth in the company. A few financial highlights now for the quarter that just went by. So, if you look at revenue from operations, the first half of the
Kuldeep Jain (Clean Max Enviro Energy Solutions Ltd): roughly 67% growth. We have two business segments. One is RE power sales which is here that has also grown and RE services which quarter-on-quarter may not have risen too much, but if you look at a first half of the year basis, even the RE power sales has roughly doubled in aggregate revenue. So, handsome revenue growth in both our business segments. And then if you look at the EBITDA as well and you know if you look at the first half of the year EBITDA, RE power sales EBITDA segment for the first half, the bottom portion has risen from 620 crores RE power sales to about 986 crores. And the RE services has also shown a 20% increase from 52 crores EBITDA to about 61 crores of EBITDA. So you know EBITDA, strong growth in both segments and as a result in the first half of the year we have had a 56% overall growth in EBITDA. And profit after tax also up from a small base of 19 crores in the first half last year to about 120 crores, right? And you know the the So key unit economics, we always provide this guidance line, it's it's standard numbers. I'll I'll only draw your attention to one number, which is I am quite delighted that our capacity under execution the tariff is still around 4 rupees, which which for a capacity which is 50% solar and 50% wind is industry leading. With with no storage at or low amount of storage at 4 rupees tariff is industry leading in and this is because of our premium positioning within the C&I segment as opposed to if you were to look at this comparable number for a utility player for 50% wind, 50% solar in SECI contracts it would be closer to 3.1 rupees or thereabouts, whereas ours is closer to 4 rupees, right? So, that tariff premium translates into great unit economics for us. And then we have some more operational assumptions. I'll reiterate the guidance we gave at the start of the year, which is minimum 1,500 MW of new capacity addition during the current fiscal. And, you know, therefore, we we reiterate the two guidances we've given previously, which is at least 1,500 MW of operational capacity we will have. And next fiscal, FY '28, we will have at least a 3,000 crore rupees minimum reported EBITDA and on a 5 times sort of net debt to EBITDA basis that would get to a 15, 16,000 crore rupees net debt against this corresponding EBITDA number. So, that those are the numbers on this page. A bunch of business updates to provide to you. So, data and AI continues to be a strong theme for us. I'll begin with some numbers, which is it continues to be about 41, 42% of our overall volume, right? And we serve a number of key customers across the board. Two more comments. People have been asking me, maybe we can take it as part of the Q&A, but you know I do see from our vantage point a lot of the compute factories or AI data centers needing to move to India, because it's becoming tough to build in other parts of the world. US was tough already, I think the recent midterm elections have made it tougher. Europe is very tough to build these compute factories in quickly. Middle East has geopolitical issues. Given geopolitical issues these compute factories will not go to China. So, you know I think India will see a rise from its current modest 2.3% share of AI data center market or or compute factory market, I think they will see a rise and that will lead to a rise in contracted energy capacities in this country as well. So, that's my one comment on AI and data centers as a customer base for for us. A little more about our clients. So, you know the the overall numbers we have gone through already, I will not reiterate this. But the new, you know one thing we always look at is how much of the new PPAs we sign comes from the same existing clients. You know we we just call it a repeat business share in our growth and that continues to be very high for us. It's consistently between 60 to 70% of all of our new contracts coming from the same customers
Kuldeep Jain (Clean Max Enviro Energy Solutions Ltd): pretty handsome at about 75% for the last two financial years. In the first half of this year this has risen slightly to 85%. I I mean that's always a good thing. Of course, I I always tell my business development teams that, you know, you need to work harder on getting more new clients because you're just resting on your laurels if you are selling to the existing ones. But fantastic to to have this kind of a strong 600 plus base of corporate clients which caters to our growth. We we continue to have the low receivable days. They are amongst the best in the industry. You know, and our clientele remains very high caliber as demonstrated by the fact that 83% of them are credit-rated AA, AAA, and multinationals, and another 12% of them are rated A category. So, 95% A-rated or above, 83% AA, AAA, or multinationals. We have a very strong contracting discipline. So, we retain a 23-year weighted average PPA tenure. So, these are very long-term contracts. We manage to do them at a high tariff because the disaggregated nature, we are selling to over 600 customers. And, therefore, even the longer term the the tariffs tend to be essentially in the retail market or retail is the wrong word, but in the direct-to-consumer market tend to be higher than the wholesale market, which is what really a SECI kind of contracting reflects. And we are today in in building plants in 10 states in India. Seven states are operational. Another three states are contracted and under execution. We we spend annually more than 10,000 crore rupees of capital expenditure, and therefore operational excellence in how we build and run our plants is very vital part of our business. I'd like to cover that next. So, firstly, we we have increased just from our RE power sale capacity commissioned in the last 12 months, on a trailing 12-month basis, we are adding capacity at about 1,400 megawatt a year. So, when we say that we envision adding about 1,500 megawatt of capacity, you you know, it's it's something which we've already demonstrated in the trailing 12 months. We've we have to just believe that we can keep working at that pace. The second thing in a in any environment is that you have to be able to build the plants within your budgets because that's a big risk particularly in a capital-intensive business. As you have seen, this first half of this fiscal also, the plants we have commissioned have come in within budget at about 95% of the budgeted cost where and that is a achievement we are proud of. Over the last three fiscals also, we we come in within you know within 100% of our budget. The range has been 95% to 97%. And this is remember the war broke out in March. So, this is you know in an environment in the first half of this year when we commissioned the project, which is very you know much of rising commodity prices, rising cost of materials, rising cost of diesel, supply chain uncertainties because of the war. With all of that, we're still building projects within what the board has sanctioned for this, you know. Grid uptime I've got more details. It's been better on the CTU front, but I'll I'll explain more in a subsequent slide. And, you know, even STUs continue to have a 98.5 to 99% kind of an uptime rate. So, that's not an issue. If you look at our plant operating performance you know in the last 12 months which is a trailing 12 months to H1 '27 versus a trailing 12 months to H1 '26, you know the the wind power performance has been slightly better, and even the solar plant performance has been slightly better. And and the hybrid plant performance has also been slightly better. So, I think we have made a lot of efforts to to continuously build super high quality power plants and operate them well. It reflects in high quality of operating performance in all of our plants. The the Bikaner grid curtailment is is something which a lot of you asked about. So, we've provided more details. In the first quarter of this year, if you remember our last earnings call, we said it was the plant has just commissioned and the grid curtailment was 70%. It has fallen in the last quarter, the month of July, August and September to you know July and August was nearly 50%, then it fell
Kuldeep Jain (Clean Max Enviro Energy Solutions Ltd): 34% and as of October it has fallen to 26%. Basically the grid has worked hard on upgrading and commissioning some new sections and as a result the congestion which has reached very peak proportions has really reduced and we are delighted to see it at a low number of 26% in in October. From an EBITDA perspective, if you translate this, in the first half of the year the grid being the grid curtailment cost us about 5% of our EBITDA. In other words, if our EBITDA in H1 of this year grew at 56% without this curtailment, instead of 56% it could have grown at 61%. Right? But it's not a very big number and and is as the the issue is getting more in in control as you can see with these numbers. I'll now hand over to my able colleague, Nikunj, to take us through the financial results. Thank you.
Nikunj Ghodawat (Clean Max Enviro Energy Solutions Ltd): Thank you, Kuldeep. And in the financial result section, which is page number 16 the slide. I think on the first table is on the P&L number. Kuldeep has to some extent covered this. I'd just like to highlight a couple of things here as numbers have already been covered is that the growth the the the growth in the EBITDA is primarily driven by a strong operating performance of our assets, which has delivered on generation very well, both wind, solar and hybrid assets, and also some of the projects which we have commissioned past commission in H1 has also contributed to the growth in the revenue and EBITDA for our power generation segment. And particularly on the balance sheet front, there are three couple a few para see three few components which we track very carefully. It's a business where we are consistently adding capacity. So, how the gross block movement has been and the working work-in-progress, cap CWIP movement has been. So, there is a growth in both. They now stand at the gross block at 15, 182 crore as on 30th September, 2027 and cap CWIP is around 6,700 crore and this capital expenditure result correspondingly increased into the net debt, which is on 30th September, 2027 stand at 13,838 crore. As this capital expenditure is funded by the net debt and internal accruals in the equity. And that's why on the next page, what I'll try to cover is the profiling of the net debt and how the different component of there is page number 19. Just go to page this page. No no, the break up of Sorry, apologies. We are on page number 17, which is profiling of the net debt. If you see the bottom chart, it just breaks the net debt into three components, which is the debt against the project which has been operational for more than a year. The outstanding debt against those projects is 6,700 6,774 crore and these assets correspondingly generated in first half around 717 crore of EBITDA. So, we loosely annualized it, it's it's sort of less than 5x of net debt to EBITDA on the assets which are fully fully operationalized. Right? And that is also sort of the net debt to EBITDA number at a balance sheet level as a proxy, which we also monitor. That also remains within less than 5x. So, that's a very important component which we monitor. And outside of this, we have 5,100 crore of debt which is against under construction assets or the debt at a holding company. That pretty much correspond to the 6,700 crore of cap CWIP which we saw on the last page. So, the net debt buildup reflect the capex which we are incurring and the assets which are fully stabilized are self-servicing from the cash flows which is generating from the assets. So, that's the important point I wanted to make here. And this that's why result into resulted into a very important update for this quarter was upgrade in the credit rating for the CleanMax. We are now rated at a corporate level AA from CRISIL. And also in this finance in the last quarter, we did a first green bond of the company, which was also AA rated by the CRISIL, which was a 2,500 crore bond. The the big benefit of that bond was which we completed in the month of September was that it was a fixed-rate bond with a [inaudible]
Nikunj Ghodawat (Clean Max Enviro Energy Solutions Ltd): starting from 2-year to 10-year with a weighted average cost of around 8.6. And that's why if you see on the middle bar chart that our fixed component of the outstanding debt which is the rate locked-in, is 53.7% and the floating is 46%. It's a very important ratio in the current environment because we all know that there is some hardening of interest rate expected over the next few quarters. We already see some increase in the last quarter by the RBI. So, fixing of the rate significantly help us navigating that increase in the rate of the macro environment rate. And also, last but not the least, the the first half interest rate, which is the weighted average interest rate for the company has also been is has reduced to now 8.2 at the project level and at the overall corporate level at 8.3. So, so if you just think about Clean Max, in H1 we've been able to reduce the rate, get the corporate rating upgrade, and also been able to get half of the portfolio locked-in. So, in the second half and going forward, as the rate are expected to go up, even if it goes up, let's say by 50 bps in next 6 months, hopefully we our weighted average rate would just not cross what at the point at which it started the year. because of the various initiative taken in the first half. But yes, we are growing we are growing at the rate of 50% on our capital ex- expenditure and EBITDA both, we'll have to really create a fine balance, but the important message is that we've been able to have a very good mix of fixed and floating and upgrade in rating which will help us navigate this hardening of the interest rate macro environment. Now, the next is on the operating leverage of the business. As as we highlighted in past also, we continue to have the the the operating leverage on the energy RE power cell segment reflecting on our overall performance. The EBITDA from this segment is now 84% which was 83.5% in the March 2026 and with the constant gross margin the increase in EBITDA is is is just lower SG&A as a percentage of the overall revenue of of that segment. And that's the operating leverage which we expect to continue as we expand. And and that's that's overall is a high-level update we have on the financials, and I'm just conscious of the time and I say that we should use the last half an hour to have any questions from you all and if we can just pause here and get into the Q&A.
Moderator: Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Participants connected on audio may press on * and 1 on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press * and 2. Participants connected on webcast may click on the live question tab and use the raise hand option. You may also type in your questions on ask a question tab. We will wait for a moment while the question queue assembles. The first question is from the line of Puneet from HSBC. Please go ahead.
Puneet (HSBC): Yeah. Thank you so much and congratulations on great second quarter. My first question is on your CTU connectivity. Is there an update on what's the timeline now for Bikaner 2 to become fully functional and also anything you're hearing on Koppal part?
Kuldeep Jain (Clean Max Enviro Energy Solutions Ltd): So, on Koppal, there is no issue on the connectivity. Let me just be clear. They are ready to charge any day. In fact, we are quite certain that we will commission our plant in phases, but we will start from December itself and the grid there is ready and there's no transmission bottlenecks in Koppal. Now, on Bikaner 2, yes, as we saw the grid has done a lot of work which has improved the extent of the curtailment. We we don't really have an update and please appreciate it's completely outside our control in terms of when the grid will finish building a relevant substation and there are some lines going into UP, which are slightly delayed at their end and which is causing this delay in getting a final connectivity. So, it's tough to really forecast, honestly.
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