Azure Power Global Limited (AZRE) on Q4 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, good day, and welcome to the Azure Power Fiscal Fourth Quarter 2021 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. . Please note that this conference is being recorded. I now hand the conference over to Mr. Vikas Bansal from Azure Power. Thank you. And over to you, sir.
Vikas Bansal: Thank you, and good morning, everyone, and thank you for joining us. On Tuesday evening, the company issued a press release announcing results for the fourth fiscal quarter of 2021 ended March 31, 2021. A copy of the press release and the presentation are available on the Investors section of Azure Power's website at azurepower.com.
Ranjit Gupta: Thank you, Vikas, and a very good morning, everyone. I would like to start today's call offering condolences to everyone impacted by COVID. We faced the pandemic's ugliest phase in India during April and May 2021, when almost no family was left untouched in some way or the other by COVID. Good part is that we are now seeing daily infections recede and our vaccination drive has picked up pace with over 260 million doses administered till date. At Azure, we have stood by our employees and stakeholders in the fight against the pandemic and have been following all COVID protocols with vigor. During the second wave, we undertook a number of initiatives to supplement the medical infrastructure in and around the areas we operate. We donated 30-plus oxygen concentrators to healthcare facilities in the states of Rajasthan, UP, Karnataka and other states, supplied 30 BIPAP machines to a health care facility at Bikaner, supplied oximeters, PPE kits, masks and other essential medical items to a number of facilities as per their requirement. Within the company, to help our team members, we strengthened our preparedness to respond to medical emergencies faced by our employees or their family members by implementing a cohort-based support group, procurement of 15 oxygen cylinders distributed across our various sites and purchasing a number of oxygen concentrators for our own use placed at strategic locations. We continue to retain support of a qualified medical practitioner, for any medical advice to our employees and their family members. We have also implemented a company subsidized term insurance scheme to support the economic needs of our family in case of any unfortunate event. I am especially proud of the cohort-based group wherein we created a pyramid of contacts thereby reaching out to every team member every day to track their and their family’s health, providing help where needed. The way the team came together on several occasions to help a team member in his or her hour of need was exemplary and truly demonstrated the strength of Azure.
Murali Subramanian : Thank you, Ranjit. On Page 5, we provide an update on our projects under construction. Second wave of COVID at its peak severely impacted our construction activities, not only disrupting the supply chain but also impacting several of our sites. The high local demand for solar modules in the past several months or so in China, coupled with a rising yuan and rising raw material costs, has resulted in module suppliers trying to renegotiate their contracted price and delivery commitments despite signed supply contracts. The module prices for new orders are at levels that were last seen years ago. We had anticipated earlier that by fiscal year end, in our Rajasthan 600 megawatt project, we would operationalize 450 megawatt and the final 150 megawatt finished by May. However, as of today, we have finished 300 megawatt in FY2021 and 300 megawatts has been pushed by another quarter, due to the second COVID related -- COVID wave related challenges.
Pawan Kumar Agrawal: Thank you Murali. Turning on to Page 9, as of March 31, 2021, we were operating 1,990 megawatts on a PPA or AC basis, which is 20% higher than what we were operating a year before. Our portfolio of 6,955 megawatts remained stable from the previous quarter, excluding Rooftop portfolio. Since our last update, we have entered into definitive agreements to sell our Rooftop portfolio and have therefore excluded these assets from our portfolio. Our construction costs have continued to fall in FY ‘21 and were about 19% lower than the previous year. Turning on to Page 9 -- sorry Page 10, looking at the quarter, our revenues continue to increase as we construct more projects, some of which have been affected by the second wave of COVID and supply related challenges on modules front as noted by Murali. After adjusting for stock compensation expenses, our EBITDA has been $44.3 million, or 18% higher, against 16% increase in revenues, from the same quarter in the prior year. Turning to G&A, on Page 11, save for stock appreciation rights, or SARs, which added about $18 million to G&A for the year, our cash G&A were below our internal expectations. We remained very focused on reducing our costs as we had outlined earlier this year and are pleased to report that our G&A was 26% lower than the prior year. When looking out into FY ‘22, we expect that cash G&A will rise about 10% from FY ‘21 levels, primarily reflecting inflation and an increase in megawatts in operation. We are progressing well on refinancing of our about US$185 million long-term debt facilities outside bond pool as well as US$500 million Green Bond RG1 and we expect substantial savings in interest costs once these refinancing are completed. Turning to stock compensation expenses, as the share price rises, our stock compensation expenses will rise inflating G&A. To help with modeling, the impact of SAR expenses on our G&A is directly linked to the share price. For fourth quarter ‘21, we had a reversal in expense of around $7.7million, primarily reflecting reduction in share price from as of 31st March 2020 to as of March 31, 2021. Going forward, for every $1 change in stock price above and below our previous quarter’s close will have about an $800,000 impact, both positive and negative. We are particularly proud of our ability to improve our DSO despite the challenges this year. Our fourth quarter ‘21 DSO was 116 days, which is better than 122 days about a year ago. We continue to make progress in collecting our payments and believe there will be further improvement in the future with commissioning of projects with high credit worthy counter party this year. On Page 12, you can see that EBITDA from operating assets increased about 18% year-on-year and that cash flow to equity from operating assets rose about 55%. Net debt for operating assets was about $1.13 billion and EBITDA for the last 12 months was about $179 million resulting in a net debt to EBITDA ratio for operating assets of 6.3x, better than last year’s ratio of 6.6x. Finally, looking at Page 13 providing balance sheet information, we had about $152 million of cash and cash equivalents and our net debt stood at approximately $1.19 billion. As a reminder, for those that are calculating our debt ratios, the hedging assets of $75 million included in Other Assets on our balance sheet should be netted against our total debt as this is directly linked to the foreign exchange hedge we put in place related to our Green Bonds. Now, I pass on to Ranjit to provide some commentary on our guidance.
Ranjit Gupta : Thank you, Pawan. In February 2021, when we had reiterated our revised guidance for fiscal year ‘21, I had mentioned the caveats of timely commissioning, normal weather, and no curtailment. We are 1.5% lower on our Q4 revenue and 0.5% lower on our fiscal year ‘21 revenue compared to our projected number, primarily reflecting lower insolation due to weather conditions. Even though we have just started on the recovery path from the second wave, as of now, we reiterate our numbers for the current fiscal, but will keep the markets posted in our coming updates. For the first quarter fiscal ‘22, we expect revenue to be between INR 4,100 million and INR 4,300 million and the PLF to be between 23% to 24%. With this, we will be happy to take questions.
Operator: . First question is from the line of Philip Shen from ROTH Capital Partners.
Philip Shen: The first one is on the SECI 4 gigawatts. I know you gave some color in your prepared remarks and in your release. But I was wondering if you might have a better sense for when the first tranche might get placed. What's the timing of when the agreement could be shown there?
Ranjit Gupta: Thanks, Phil, for the question. So like you mentioned, right, there is some progress over the last 2, 3 weeks. In fact, a couple of hearings that were scheduled in the regulatory commissions actually happened over the last couple of weeks, and we actually hear that those hearings went well. So we are hopeful that -- we are in the middle of June. So we are hopeful that within the next 4 weeks, we should get something signed off the first tranche. If not the whole thing, at least it will -- signings will begin within the next 4 weeks is what we are told by SECI.
Philip Shen: Great, Ranjit. Thanks. And have they by chance been able to share with you preliminarily how much lower the tariffs could come down by or could be? Do you think it's -- do you think you'll be 25% below where you thought? I mean I think you expect the tariffs to come a bit lower, but how much lower do you think they could be?
Ranjit Gupta: So Phil, like we have said in the past that the tariff has to make sense for us. Otherwise, we will not sign. This is an option which is available to us, and we can hold on to the option for more time. There is no hurry really for us to go out and sign because like we have mentioned, and we have spoken in the past that tariffs that have been discovered in the last 3 or 4 months or 6 months have been super competitive. And we don't believe that we would have liked to participate in the market at those tariffs. And our difference has actually been shown right because the markets have moved in the wrong direction as far as those tariffs are concerned. So -- and we had the option at some point to look at the tariffs that were discovered and signed power prices agreements close to those tariffs. And we had declined at that point saying that those tariffs are not appropriate in our view. And we would rather wait for the correct tariffs. So at the moment, what has been -- what is being discussed is maybe a 10%, 15% kind of a reduction from our fixed tariffs. But the final numbers will be known only when we get the regulatory approvals and sign the power sale agreements with their distribution company. But rest assured that we have declined in the past to sign when the tariffs did not make sense, and we will continue to do that, still the tariffs makes sense for us.
Philip Shen: Great. Thank you for that color, Ranjit. And then on the call earlier, you mentioned the potential to get into wind and storage. I was wondering if you might be able to share a little more on the timing of when something could be announced and what the structure of that opportunity might look like?
Ranjit Gupta: Phil, that’s a very important question. And that’s -- thanks for asking because wind and wind hybrid, currently, what is happening is that there are standalones, very small storage tenders, which are more exploratory in nature than commercial in nature. So we have looked at some of them. We have not yet taken part in any of those auctions because they're very small and exploratory like I said. However, as far as wind and solar wind hybrid projects are concerned, they are well established. Wind has been around in India for more than 25 years. So therefore, it's a well-established market. And Murali and I have the experience of building more than 1 gigawatt of wind in our previous life. So therefore, we are very, very comfortable with the wind auctions and wind projects and wind construction and wind operations. So we have taken part in an auction for wind and an auction for solar wind hybrid in the last 6 months. And there are a couple of auctions coming up over the next -- we understand in the next 4 to 6 weeks. So we will take part in those auctions. And if again, if we find the right tariff, we will certainly like to win one of those auctions or win both those auctions and build out the first wind or wind solar hybrid projects for Azure.
Philip Shen: Great. One last question, if I may. As it relates to, I think, trackers, you mentioned that you used your -- used trackers recently to offset the panel price increases. Looking ahead, do you expect trackers to be -- first of all, which tracker did you use? And then also, do you expect the share of trackers in your projects to increase meaningfully? And if so, could it be something like 50% of your installations? Or do you think it stays at a meaningful small percentage?
Murali Subramanian : Ranjit, do you want me to take that?
Ranjit Gupta: Yes please.
Murali Subramanian : Right. So every project has to be evaluated at its merit, right? So currently, given the panel prices, there is merit in considering tracker. So we are doing that for one of our projects, as mentioned. Depending on the tariffs, depending on the location, depending on several other inputs, each project will be evaluated to determine whether a tracker based system makes sense or the traditional fix does make sense. And on that basis, we will decide. So it would be hard for us to sort of peg a percentage for the future. In terms of which tracker, I think we had this conversation in the past as well, where we are looking at a range of companies. So we are looking at 3 different companies, and each of them is getting some portion of the contract going ahead. And these are the big names, which are there, one of them is American and one of them is Chinese, one of them is Indian.
Operator: . The next question is from the line of Maheep Mandloi from Credit Suisse.
Maheep Mandloi: Ranjit, maybe 1 clarification on the FY 2022 guidance of INR 17.9 billion to INR 18.9 billion of revenues. Could you clarify whether that includes Rooftop or not? Because I think in the April press release, you had reduced it by around INR 700 million. Just want some clarification on that.
Ranjit Gupta: So in the current numbers, we have included the -- so you're talking about the 17,900 and 18,900 that we have mentioned, right?
Maheep Mandloi: Yes, that's right, yes. 17,200 and 18, 200 in the April press release when you announced the sale of the Rooftop portfolio.
Ranjit Gupta: Pawan, would you be able to take this?
Pawan Kumar Agrawal: Sure, sir. In the next year guidance, Maheep, that excludes Rooftop revenues, if this is what you -- if I understood your question correctly. Yes, excludes Rooftop revenues.
Maheep Mandloi: So 700 million increased revenues versus the guidance from April press release. I just want to clarify that. That's a result of just more projects coming online earlier than expected or something else on that?
Pawan Kumar Agrawal: Yes. So if you also see, Maheep, that we have qualified on our 6-K that these projects because of second wave of COVID are getting slightly delayed, and of course, MNRE is also considering extension. So as we stand today, we are not in a position to kind of ascertain with a reasonable certainty what exactly would be the position of the project. So that is the reason we have a very -- we have qualified in our 6-K that we'll be assessing how the commissioning happens. And possibly maybe in the next quarter, this process will be able to tell what would be -- if you need to modify this annual guidance.
Maheep Mandloi: And I'll follow up in detail on later on with you on that. And maybe just another question from my side is just the -- just looking at the CapEx for a new solar project in this quarter, it seems pretty low compared to what we had in the last quarter and last year, at least 10% lower by my math. How do you expect that to trend for the rest of the projects under construction just given model prices have increased off late? Do you expect any risk to it, any cancellations from the model suppliers, anything like that impacting the CapEx in the near term?
Ranjit Gupta: So very good question. So we have negotiated module supply agreements and signed supply contracts with several manufacturers and suppliers. Some of them are being discussed and negotiated because there has been a rise in input costs, and we understand that. And this is work in progress. In some cases, we have sort of agreed to a marginal increase. In some cases, the increase is a little more than margin. So those are still under discussion. Having said all of this, if we were to build a new project today -- I'm not talking about the projects which are already under construction, which we have spoken of in this release, but any new bid that I go for, if I for a new bid takes today's panel prices, then the project cost would go up by about 10%. However, that's not something that would impact us directly for the projects under construction because we have contracts signed at lower panel prices, and there is a little bit of discussion around those very specific numbers.
Maheep Mandloi: Right. That makes sense. And then maybe just like one high-level question here, and maybe Ranjit, this is for you. So we're seeing a couple of assets exchange hands recently in the Indian market. And I think even today, international developer within Indian operation was taken private. So I guess to that -- keeping that in mind, like, are you seeing any interest in, say, privatization or any -- just from other entities, just given the valuation in the equity markets doesn't seem to reflect the opportunity ahead of you, especially in my opinion, doesn't even include the 4 gigawatts of projects, which as said the PPAs could be negotiated in the next month or so?
Ranjit Gupta: Maheep, this is a very difficult question to answer. At the moment, there is no talk that we have heard between shareholders about taking the company private. And we have seen the share price in the last few months reflect what was perhaps closer to the true value of the company. And at the moment, there has been a pullback in the wider clean energy market and sustainable stocks. So I think this is perhaps a temporary -- I believe, a temporary phenomenon. And we will see the share price reflect the true value sooner than later. I am more confident of that today than I was about a year back. Today, if you see our liquidity, right, I mean we are trading -- when we joined the company, we were trading 10,000 shares a day. Today, we are trading over 300,000 shares a day. Yesterday, we traded over 0.5 million shares. So with that kind of liquidity, there does come a little bit of volatility. But the trend, I believe, is going to be positive. And public markets in the U.S. are a brilliant place in my opinion. And we hope to stay public.
Operator: . The next question is from the line of Puneet from HSBC.
Puneet Gulati: My first question is with respect to the overall cost. In your presentation, you talk about your cost on a DC basis, cost falling to $0.39 plus in FY '21 from $0.49 in FY '20. Where do you think will these costs go for FY '22?
Murali Subramanian: Again, when you say these costs, you're talking about Azure specific projects, right?
Puneet Gulati: Yes.
Murali Subramanian: It would trend up perhaps by a few percent, not much. But again, these are early days because these projects are under construction. And this is a constant negotiation and discussion with our suppliers. So I can't predict what might happen 4 weeks or 8 weeks from now. That would be speculative. But given where we are, we -- because we've already signed a lot of our contracts, there are some renegotiation happening. On that basis, we could probably estimate a few percent increase. But again, I don't know what will happen 8 months down or 12 months down.
Puneet Gulati: Okay. If I were to resume the current module prices then where it should be strengthened?
Murali Subramanian: If you were to look at the current module prices and you go for a new project with a lot of other input costs have also increased. So if you look at all of that, one would reckon about a 10% increase, as I mentioned.
Puneet Gulati: .
Murali Subramanian: Yes, as I just said 10%. But again, the important number here, cost per megawatt is 1 metric. Perhaps the more relevant metric would be cost per million units, right? Because if you are introducing trackers, if you're using other newer technology to improve yield, then the amount of energy generated per dollar of investment is probably more relevant as opposed to amount of megawatts installed. So that may come into consideration once you deploy better and newer technologies.
Puneet Gulati: Understood. So in the 10% you're including the cost of trackers as well and better modules as well?
Murali Subramanian: No. So that is -- it's very difficult. There are so many moving parts in our project cost. So depending on the choice of tracker, depending on the choice of modules, the choice of technology of the module itself. So all of them will impact the cost. So the endeavor is to get the lowest cost of energy as opposed to the lowest CapEx per megawatt. What I have indicated in terms of 10% is like-for-like, all else being equal, no change in technology, no change in anything, purely on account of cost increase on like-for-like items. However, if you go for better technology, you may pay more, but you might get better yields, right? So that's a constant evaluation we do.
Puneet Gulati: Understood. My second question is how much of the CapEx was capitalized in the current year?
Pawan Kumar Agrawal: Yes. So if you look at our balance sheet slide, the PP&E has gone up from INR 95,993 million to INR 108,847 million. So that delta is something that has been capitalized if you compare March '20 versus March '21.
Puneet Gulati: Yes. So -- and if I look at your CapEx, it is roughly INR 18 billion, but what is being commissioned is probably half that number.
Pawan Kumar Agrawal: Right, right. Because commissioning, typically, we have to incur a lot of costs which remains in CWIP, and then we commission. So even if it is in CWIP, it is capitalized, right? So that is the way we reported.
Puneet Gulati: So INR 13.5 billion ballpark number is what you would have capitalized this year, adjusting for all deficits?
Pawan Kumar Agrawal: Sorry, 13.5?
Puneet Gulati: INR 13.5 billion would be the cost capitalized for megawatts, is that the right comparison?
Pawan Kumar Agrawal: So maybe, we'll have to check the breakup exactly how much of the total CapEx is capitalized and how much is in CWIP. That number is not ready with me. But definitely, this is a total increase in gross, but part of which is commission project and part of which is still under construction. And therefore, they're not comparable vis-a-vis commissioning.
Puneet Gulati: Okay. So I can take that later with you. My last question, Ranjit, is for you. So you have still 4 gigawatts under negotiation in terms of tariffs. So on the current module prices, do you think 2.93 is a number which you will be comfortable with? Or do you think you could still take something lower or you need to take a higher tariff?
Ranjit Gupta: Certainly, Puneet, the current prices that exist, all indications -- if you talk to the polysilicon suppliers, we talk to the wafer suppliers, we talk to the sales supplier, we talk to the module suppliers, indications are that this is very temporary. And indications are that this is easing out or starting to ease out already and that the module manufacturers are seeing inventory buildup. And so, therefore, we don't believe that this is a continuing trend, let's say, for example, if the price today is x, like Murali mentioned, around 10% higher, that tomorrow, it will be 15% or 20% higher. That is not the expectation. We expect that normal service is going to resume in the next few weeks, and we will see a steady moderation in the price of modules as we go towards the end of the year or beginning of next year. So if we sign like I'm saying that in 4 weeks or 6 weeks’ time, we are -- if we see a lucky enough to get some of our Power Purchase Agreements signed, those Power Purchase Agreements will need to be delivered by contract 2 years from now. This means that we are going to be buying modules for those contracts only 6 quarters hence. So there is plenty of time. We do not expect that the module prices will rise in this period from the current prices to higher numbers. We do believe that they will moderate. We don't believe that in this quick time in the next 4 to 6 quarters, we believe that it is perhaps not possible to see numbers that happened just post-COVID, right, when suddenly the prices dropped from pre-COVID levels. But I would not be surprised if we are able to see pricing, which is pre-COVID levels sooner than later as in over the next 3, 4 quarters, we should be able to come back to pre-COVID levels at least is our expectation. But of course, it's a crystal ball to some extent, but this is what the market seems to be suggesting. This is what the market seems to be telling us.
Puneet Gulati: My last question, just if I may, on your sale of Rooftop subsidiary, do you see any bottlenecks to that sale because there seems to be some sort of comment that says that Radiance -- you need to reimburse Radiance if the asset transfer does not go on. Any major hurdle that you're looking at, which is a potentially resultant?
Ranjit Gupta: So, Puneet, the Radiance team is super excited about this portfolio. They've got a great deal. We've got a great deal. This is a transaction where buyer and seller are both happy. So they are already engaged with us. They have a very good operating team. And we are very confident that they will make a success of this portfolio, perhaps even better than what we have done. And they seem to be very motivated and committed. So we don't believe that there will be any issues. There are always issues in getting some of the PPAs approved, some take a bit longer, some are a bit faster. But -- and you know how unlike, this is 150-odd megawatt portfolio. If it was a ground-mount portfolio, it would be one Power Purchase Agreement. In case of Rooftop, it spans a Power Purchase Agreement, right? And therefore, it does take time to get all the approvals and all the sign-offs. So that's why we have said that it will take till September. When we mentioned about the contract terms that you have specifically referred to, those are contract terms because, obviously, there will have to be some contract protection for both sides in a situation when things goes out. And therefore, we have been in -- and they’ve been transparent in what their contract conditions are. But there is obviously no clear because both the buyer and the seller are motivated to make this transaction a success.
Puneet Gulati: Yes. But you're still yet to get paid for it, right?
Ranjit Gupta: Yes, of course. I mean when the transaction closes then we get paid.
Operator: The next question is from the line of Elvira Scotto from RBC Capital Markets.
Elvira Scotto: Hi, everyone. I just wanted some clarification on the fiscal year 2022 guidance. So in terms of that guidance, what is embedded in the guidance relative to your projects under construction? So what is the timeline for completion for each project that's embedded in your full fiscal year guidance?
Ranjit Gupta: Hi, Elvira. So yes, if you look at our presentation, the earnings presentation, if you go to Slide 5, which was, I think on Slide 5, which is the projects under construction update, we have mentioned how the 950-odd megawatts are likely to be commissioned, which is the second half of the Rajasthan 6 project, a Rajasthan 8 project, a Rajasthan 9 and the Assam projects. So this 950-odd megawatts that will get added to our capacity in this time. So if plain vanilla, we do only this, we don't do any other -- we don't do anything else, then we should be seeing us at our guided numbers by the end of this fiscal. So this is what -- in our case, in our belief, this is say the worst-case scenario for us.
Elvira Scotto: Okay. The reason I'm asking is, I believe you've pushed out 300 megawatts on Rajasthan 6 by one quarter. So I'm just trying to understand how you can still maintain the same fiscal year guidance when you've actually pushed out the timeline on 300 megawatts?
Ranjit Gupta: So the reason, Elvira, is that it was supposed to be done by May of 2021. That means we should have completed the second 300 megawatts by now. So that is not going to happen. Obviously, it has not happened. We are in June already. So we expect that it will get done in the next quarter. But the next quarter is still part of this fiscal year. So whatever push has happened on these projects, there have been a slight push on each of the projects that is there compared to last time on account of the fact that we practically did very little work over the month of April and May and partly in June. So therefore, the fact that we could not do much work in these 2, 2.5 months as India was going to the second pandemic wave. So because of that, everything has been pushed back a little bit. But we still expect that all of these projects will get done in this fiscal year. And that's the reason why the target is the same. The reason there has been a change between our guidance from February to now is that we've just corrected the guidance for the sale of the Rooftop projects. Earlier, we had included the Rooftop projects. Now we have taken those Rooftop projects out. Otherwise, as far as the ground-mount portfolio is concerned, there is no change as far as the fiscal is concerned.
Elvira Scotto: Okay. And then just to -- sorry to keep asking on this. But just to clarify. So the fiscal year guidance, is that the amount that you expect in this year or is it a run rate amount exiting fiscal year '22?
Ranjit Gupta: This is the installed capacity as on 31st of March 2022.
Elvira Scotto: Okay. That's helpful. And then just in terms of -- on the hybrid projects and the wind projects, how are you thinking about returns on those projects relative to returns on solar-only projects?
Ranjit Gupta: So the market is fairly mature on both the solar wind and wind hybrid -- solar wind hybrid side. So we expect similar returns on whether we do solar or wind or wind hybrid. The technology is fairly well known. The players are very well known, the risks are very well known. So therefore, we don't expect there to be a differential in the return. What -- how it helps us really is in 2-ways. It helps us because it increases our addressable market because of the fact that earlier we were taking part only in solar auctions and now we'll take part in wind and wind hybrid, wind solar hybrid auctions also. So it increases our ability to win projects. And the second thing it does help us in is because this is where the technology is headed. We are looking at higher penetration of renewable energy in the grid. And as we have seen across the world, when that happens, the grid managers have difficulty. And slowly, it's moving towards a dispatchable renewable energy. And when you do dispatchable renewable energy, that can typically happen only with some sort of storage, whether it's battery storage or mechanical storage or some storage, whatever the storage facility might be. And for storage facility to work, you need to typically manage the storage in the morning peak hours and in the evening peak hours. So the evening peak hours typically gets filled, the storage gets filled by solar and the morning is filled by wind, because typically in India the solar energy gets dispatched during the day, whereas wind is largely in the night. So that we can actually use the same sort of storage system and use it once in the evening and once in the morning. So therefore, wind is a very important ingredient for the dispatchable power to be successful in India, and we need to be in that space.
Operator: As there are no further questions, I will now like to hand the conference over to the management for closing comments.
Ranjit Gupta: Thank you, everyone. Thanks for participating in our conference call. And we look forward to seeing you again. We are always available, Vikas Bansal is available any time for more questions, more comments and for any one-to-one discussions that you might want to have with us for clarity and anything that you might want clarity on. So I look forward to interacting with you more and have a great week ahead. Thank you.
Operator: Ladies and gentlemen, on behalf of us Azure Power, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.
