GMR Infrastructure Limited Q4 FY15 Investor / Analyst Conference Call Transcript Monday, 01 June 2015 at 2:00 p.m.

Transcription

1 GMR Infrastructure Limited Q4 FY15 Investor / Analyst Conference Call Transcript Monday, 01 June 2015 at 2:00 p.m. Ladies and gentlemen, good day and welcome to the GMR Infrastructure Limited Q4 FY 2015 Earnings Conference Call. As a reminder, all participants' lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing * then 0 on your touchtone phone. Please note that this conference is being recorded. We have with us today. Mr. Madhu Terdal Group CFO and CFO's of GMR's business verticals. Before we begin, I would like to state that some of the statements made in today's discussions maybe forward-looking in nature and may involve risk and uncertainties. Also recording or transcribing of this call without prior permission of the management is strictly prohibited. At this time, I would like to hand the conference over to Mr. Madhu Terdal - GFO at GMR Infrastructure Limited. Thank you and over to you sir. Thank you, Karuna. Ladies and gentlemen good afternoon and welcome to this quarterly call. I am happy to connect across to all of you through this call after a gap of couple of quarters. As you aware, we were not able to go on the analyst call because of our rights issue which was in progress at that time. Before coming to that let me also tell you, who are all on the call currently along with me, my colleagues Mr. Sidharath Kapur - CFO of Airports, Mr. GRK Babu - CFO of Delhi Airport, Mr. Mohan Rao - CFO of Hyderabad Airport, Mr. Sreemannarayana - CFO of Transportation, Mr. Govindarajulu - Corporate CFO, Mr. Krishnan Kumar - CFO our Coal business in Jakarta, Mr. Madhusudan Bagepalli - CFO of Energy Corporate, Mr. V. S. Lakshminarayana and Mr. Rajesh Madan from Cebu Airport, Mr. Ashis Basu - President Corporate Functions Energy, Mr. Amit Jain - Head of IR who is managing our Investor Relations, Jitendra Jain - CFO of Corporate Finance, Sanjay Gulati - Corporate Indirect Taxation. With these names let me begin with the subject. First of all, let me thank you profusely for the all the support you have given in making our Rights Issue successful. Continuing our efforts in raising equity to cut down out corporate debt as well as improve our profitability. In addition to the 1,500 crores of QIP money the GMR Group was successful in raising another 1,402 crores from the Rights Issue. This was completed in the month of April. Out of the rights proceeds we have already utilized 770 crores till date for debt servicing and another 632 crores is being planned out to what is reduction debt in the coming few months. Importantly the rights issue have helped us in improving our network and it has helped us in reducing the corporate debt by as much as 1,100 crores. This will also help us minimize interest out go on the corporate loans to the extent of 160 crores per year. It will be good to emphasize and underline the fact that despite not so encouraging numbers of this quarter and the year ending 2015, I am happy to say GMR Group s Energy business which has been the real problem in terms of turning out better numbers has started turning the corner. We have started consolidating our business and if this trend that is likely to be seen and if this trend persist in the light of the macro things that are happening in the economy I feel that the Page 1 of 14

2 current year we must end in a far-far better positive territory then what we have seen in March I would like to come to the Energy business which is real area I would like to tell you how this positive things have started happening and they will continue to happen in the coming few months. EMCO has been a very successful unit and now all the FSA and PPA is in place. We clocked a turnover 1,200 crores with an average PLF of 69% during the year. The EBITDA which was negative 34 crores last year we ended up the year with a positive EBITDA of 248 crores. More importantly, the good things from the litigation side have started falling in place. APTEL decision in our favor regarding transmission charges in EMCO has been positively proved in our favor. We have received favorable order of 72 crore (+60 cr per year recurring) related to POC charges from MSEDC. From the business side we also secured a 70 megawatt open access to Telangana for supply of power at Rs As far as Kamalanga is concerned there also good results were seen. We achieved a turnover of 1,144 crores and as against a negative 40 crores EBITDA last year we recorded a positive EBITDA of 75 crores. On an annual basis 53% of the PLF we achieved and the last quarter we achieved a PLF of 72%. Full load generation of 1,050 megawatt was achieved and evacuation has been progressively enhanced to the full capacity of 1,050 megawatt. Importantly, Bihar Power supply was commenced under the PPA with effect from 1st of September of 2014 and we also achieved a short-term PPA to Punjab for the month of monsoon at Rs So you will be able to see that both in EMCO and Kamalanga significant business progress has been achieved. As far as Chhattisgarh is concerned in the recently held coal auctions, GMR Chhattisgarh emerged successful winning one operational coal block that is Talabira and also one underdevelopment block Ganeshpur. And the full load trial of GMR Chhattisgarh was also achieved last month. If any questions more on the mining definitely my colleagues will be able to help in the coming few minutes. So with the above thing you will see that out of totally 1,650 megawatt is fully operational and it is in the positive EBITDA territory. Chhattisgarh in all probability will start the operations of at least one unit in the next few week and with this at least six months GMR Chhattisgarh also will be showing the positive cash flows for the current year. Same good things are happening on the gas side as well. Now, we have already got in the latest gas bidding policy that has been announced. The Government of India had come out with a policy of arranging the bid for the gas and as you know already VPGL as well as GREL I unit have emerged successful bidder and have been allotted RLNG for operations equivalent up to 25% PLF. The operation period of the current bidding is from June to September of 2015 and the next round of bidding for the remaining seven month will be expected in September Based on the clarity of gas policy for stranded projects and consequential to allocation of 25% equivalent gas the commissioning activities at GMR Rajahmundry have been already commenced. The contractors are in place they have already stared remobilizing the entire workforce and we are expecting to start the unit as early as possible. Importantlythe financing that is required to operationalize the gas power plant is already in place and the money is expected to be released anytime. In respect of GMR Rajahmundry even the funding of interest we have tied up completely 457 crores of debt was given by the consortium lenders and another 167 crore s has been given to operatioanalize the GMR Rajahmundry power plant. There was not a much good news on GMR Power Corporation but surprising to say efforts are on to determine the future course of the GMR Power Corporation. Page 2 of 14

3 On the legal matters, I am very happy to say that in terms of VPGL, Supreme Court has ordered an interim relief by directing AP transco for payment of 50% of the amount so that is 9 crores. In terms of the loss recovery petition it has been now taken up for hearing now we are expected to receive almost about 447 crore. Another good thing that came up our way is in terms of resolution in GMR Energy Limited a resolution of section 11 matter which we have been fighting of the last five years to six years. We have now been given a positive decree from Supreme Court. They have already directed the Karnataka Discom, pending the final resolution, to pay an amount of Rs. 67 crores for which formalities are being completed. In terms of Hydro the progress is quite well in terms of the Hydro projects Bajoli Holi as well as Alaknanda and the development plans in terms of Nepal projects are on the anvil. As far as Airports are concerned the Delhi International Airport continued its journey of better results. EBITDA increased 12% from last year 1,250 crores to 1,400 crores on back of continued improvement on the gross revenue and the traffic number. Notably even the EBITDA margin improved from 62% to 63%. DIAL concluded a landmark transaction of successfully raising an international bond of USD million. It was seven year senior secured bond offering and apart from giving small interest reduction it will also save Delhi International Airport as much of 270 crores by way of liquidity. And in terms of traffic numbers, we crossed the magic number of 40 million. Also DIAL became the number one cargo operator in India with its tonnage having improved by 15%. And in terms of business side, Tata and SIA Airlines (Vistara) has mande International Airport of Delhi as their operational hub. Fly Dubai, Pegasus, Nepal Airlines Trans Aero they all commence their international operations from Delhi. Hyderabad Airport was not so lucky consequent to the discontinuation of the UDF the aero revenue came down from 725 crores last year to 417 crores. But importantly non-aero revenue grows as much as 12%. Of course having said we are hopeful of resolution of AERA order in tariff as well as UDF is concerned shortly and GMR is very confident of a positive outcome shortly. As far as Maldives is concerned the progress is lightly slowed down, we were expecting the final resolution to happen by May or June. We hope that is in the next three months the final arbitration award is likely to be given and as usual we continue to be hopeful of getting a very positive outcome in the arbitration award. In terms of the urban infra, which was quite dormant for some time we have seen very significant progress in that already the master plan for Phase I development in Kakinada has been completed. Internal roads and plots are being developed. Already a Chinese toy manufacturing company has started its first phase of operations and they have started the work on their ground and about 400 people are being trained and it is expected to give employment to more than two thousand to three thousand during the next three year to four year. GMR Kakinada SEZ also entered into an agreement for setting up a BPO for the rural village folks with Tata Business Support Services and more significantly in the recent visit of the Prime Minister. Kakinada SEZ and GMR were fortunate enough to sign an MoU with Guizhou International Investment Corporation one of the largest investment companies from China under which GIIC is expected to invest up to $500 million in developing the infrastructure and various facilities of the industrial park. Modalities to operationalize this MoU are in full swing we hope in the coming quarters we will be able to give much information on these things. So gentlemen, another important development in organization realignment- GMR is continuously revisiting its strategy and as now its major projects in South are all complete and a lot of projects in the North are coming up GMR took a conscious decision of moving its Corporate Headquarters from Bangalore to Delhi. It reflects our renewed emphasis in Delhi and the North in terms of our Energy project North projects plus also the emerging growth opportunities in the various sectors which a lot of ground work is being initiated. Page 3 of 14

4 With effect from 1st of June 2015, the Corporate Headquarters had already been shifted to Delhi and all the senior decision makers have started operating out of Delhi. So gentlemen as we come to the end of 2015 and start of 2016 on an optimistic note, we will continue with our strategy of improving the balance sheet of the company. This will be basically in three area number one improving the operation results in energy, particularly in EMCO, Kamalanga and Chhattisgarh that will be on the first top priority. The second priority is in terms of the refinancing all our energy projects. You might have noticed that we have already completed our refinancing of EMCO whereby we got about 1% interest reduction and it will be say worth 35 crores per annum and also we got another 330 crore additional funding in EMCO. Kamalanga the refinancing under 5:25 is already in progress. The lead bank s board that is IDFC has already approved this scheme and the various boards are being approached. We propose to complete this 5:25 refinancing in Kamalanga in the next 45 days and as soon we achieve the COD in Chhattisgarh, the refinancing of Chhattisgarh under 5:25 also will begin. So if we can complete this refinancing and also consequently interest reduction we feel the energy sector should be turning positive. In addition to the refinancing, I would also like to remind all of you that the divestment also has not gone out of our mind GMR will continue to progress on the divestment and as I talk to you a lot of effort is being heralded in this area also. So with this three-pronged strategy of (a) operationalizing our all operations particularly Energy projects (b) refinancing and 5:25 pushing the moratorium and reducing our corporate debt and (c) also focusing on the divestments to wherever it is possible we are very confident of turning this year we are much more positive and very healthy year for all of us. So with this remarks ladies and gentlemen I would like to hand it over to the operator and we will be very happy to receive any questions from you. Thank you, again. GRK Babu: GRK Babu: Thank you very much, sir. Sir, we open the floor for Q&A? Yes, please. Sure. Thank you very much. Ladies and gentlemen, we will now begin the question-andanswer session. Anyone who wishes to ask a question may press * and 1 on their touchtone telephone. If you wish to remove yourself from the question queue you may press * and 2. Participants are also use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Thank you. We have first question is from the line of Vibhor Singhal from Phillip Capital India Private Limited. Please go ahead. Few questions from my side. Firstly, what is the status on the tariff revision process for the Delhi Airport? So if my understanding is correct I think Aera has written a consultation paper in which they recommended 78% reduction in tariff basically dependent on the decision of the Appellate Tribunal. So, what is the status and when we can expect some development on that? Rajesh? Yeah, this is Babu here. I think the Appellate Tribunal has not yet been formulated by the government so even though the consultation paper has been out the regulator has already confirmed saying that the current tariff will continue till the issues in Appellate Tribunal are finalized. We are not foreseeing anything will happen before September. Okay, so nothing is probably possible before September? That is what our guess. Page 4 of 14

5 GRK Babu: Management: Sreemannarayana: Sreemannarayana: Sreemannarayana: And after that? Post September do you expect that AERAAT may t come up with their decision and then Aera might be able to implement the tariff in this financial year or probably it might spill over to FY-17 also? Difficult to say because how much time AERAAT will take to complete the proceedingss and giving their verdict thereafter only which Aera can implement it. Fair enough, sir. Sir second question again on the airport part, so as I read the presentation we took control of the Philippines Airport in November so were the number financial from Philippines Airport included and this quarter results? Govind, you can explain. Can we pass on? We are just waiting for that somebody else will step in and answer this question in two minutes. Sure, sir. Not a problem. So shall I move to my next question if possible? Yeah, please. So what is the the status on DFCC project that we have won from the EPC part so what is exact timeline that we are looking at and what is the kind of contribution to the top-line and EBITDA level that we can expect from that project? Yeah, Sri. DFCC project. Hello, DFCC project we have commenced and it will take about four years to complete the project. Okay. We started construction on that is it? Sir the project is in a very-very incipient stage whatever minimum guarantees were required for the project we have organized those guarantees and we do not expect any major equity commitment there and most of the thing will be coming from guarantees as well as the working capital and those arrangements are being done but actual construction will take some time. So do we foresee any revenue contribution from the project in FY-16? FY-16 a nominal contribution of about some 200 crores. Okay, to the top-line? Yeah. Regarding the Cebu query, Mr. Govindarajulu will reply. Yeah, we are doing the consolidation with one quarter lag that means the November- December quarter is included in the financials of March. The turnover is 100 million and net loss of 42 million is included. Net loss of 42 million? Rs. 42 million. 4.2 crores. Okay. And the revenue was 100 million that again is in rupees? Page 5 of 14

6 Yeah, rupees sir. So any specific reason that we are making losses there right now? This is because of the amortization of upfront fees what we have paid. On the other hand, revenues for only two months have been considered in this quarter. Otherwise it will be more or less neutral on regular basis. Okay. Now basically we have taken off the operations now and we would also be constructing the I mean expanding the current terminal to a higher capacity. So basically when do you expect this entire how much time do you expect this construction activity to take place? Rajesh, can you provide? Rajesh Madan: Sir this is Rajesh Madan this side. The construction is expected to start in current month by 15 June we are expecting to start the construction. The construction time schedule is 36 months. 36 months, fair enough, sir. Sir just lastly if I can have a couple of bookkeeping of questions so what would be the total consol debt on the balance sheet? And the standalone debt, I mean standalone including the holding company debt? Consol net debt as of March is 39,471 crore. And the gross debt would be? 46,860 crore. Okay. And sir out of which how much would be the standalone holding company debt, I mean non-spv debt. 4,100 is GIL debt. Okay. And does this include the debt at the airport HoldCo level and the energy HoldCo level all those debts? All put together it will be 7,400 crores. Including the GIL 4,100 crores, right? Yes, please. Okay, so 7,400 crores is the all HoldCo debt. And sir lastly, if I see the presentation in that it is mentioned that the cash and cash equivalents at FY-15 is around 7,390 crores. But if I look at the release sent to the exchanges, the cash is basically 3,900 crores. So the remaining 4,000 crores approximately where would that money would be parked and what is the nature of those 4,000 crores that you got? Sir my suggestion is let us come back from the second question if you do not mind? Sure, sir please. We have noted this question. Can you repeat your name please? Sir my name is Vibhor Singhal, Phillip Capital. Page 6 of 14

7 Vibhor Singhal from Phillip Capital. Okay, we will come back to you on that as time permits and will give clarification separately so can you move on to the second question please? Sure then I will come back in queue I have more questions, I will let other ask the question. Thank you. It is reminder to all the participants, anyone who wishes to ask a question may press * and 1 at this time. Next question is from the line of Ashish Shah from IDFC Securities. Please go ahead. Sir can you touch upon the broad economics of the two coal blocks which we have got in the auctions what would be sort of mining cost that we would expect on a landed cost of coal at the plant from these captive blocks? Ashis Basu, can you take this? Yes, sure. This is Ashis Basu. We have taken over first year Talabira coal block which has reserves to sustain for three years. If I may give you the landed coal cost would be very similar it is not shared lower the coal cost which we would have got from linkage coal this is all in cost including premium and royalty. The landed coal cost could result in a variable charge or a energy charge around Rs Pure mining cost would be around Rs. 450 or slightly less Rs How about the Ganeshpur block sir? Ganeshpur actually is one of the best block in terms of the mine in the sense the quality of coal is more than 4,100 kilo calorie per kg where as the life of mine strip ratio is around but the facts ten years or eight years, nine years it is less than one. The Ganeshpur mine is located at a distance of 700 kilometers from Chhattisgarh project. There is scope to put up a washery, wash the coal improve the heat value so that we are carrying less ash and save on railway cost and the washery rejects away very high market value. Ganeshpur pure mining cost CAPEX OPEX included and if we take the benefit of washery would be in the range of Rs Okay. And the landed cost at the Chhattisgarh plant? This I am giving you a sense today as on date landed cost would result in a variable charge or energy charge of around Rs Okay, this is probably competitive as on today. As on today yes, indeed. And sir when do you think this block can actually commence production? Talabira we are hopeful to start the machines moving by 20th June this month most of the approvals are getting in place in the next ten-twelve days you should be able to get the balance approval the organization is in place equipments are there equipment are there so we should start getting the mine operational by third week of June. Ganeshpur is largely a function of land acquisition I think we can start mining activities on the ground around two and half years from now. Of course it could take less than five six months before coal could come out. Right, sir. Sir also touching upon the off take part now so obviously you would need a from off take to produce coal from these mines so what was the off take that is currently there. It plans very well actually Chhattisgarh which needs fuel on these mines so this is just a division of Chhattisgarh power so Chhattisgarh unit has been synchronized it should get Page 7 of 14

8 commissioned by end of June early July so off take the timeline perfectly blends with Chhattisgarh schedule. The coal which we start getting out from third week of June would meet Chhattisgarh s commissioning requirement and thereafter operations of unit one and by the time Talabira bades out, this Ganeshpur coal block will become operational and start supplying coal in line with the existing policy. We have also applied for tapering linkage by the time Ganeshpur mine becomes operational we have applied for tapering linkage to be given. So sir how much we will be supplying to Chhattisgarh initially and if any tariff has been decided has they given in-principal tariff? This mine will be a cost center for Chhattisgarh so coals will be supplied at cost. Tariff of course is a function of the PPA Chhattisgarh is in the process of tying up so these mines will be cost centers for Chhattisgarh supplying it at cost. Right, but that cost would not include the premium that we have quoted so it will be ex of It would be a cost of Chhattisgarh but will not to reflect in energy charge when we enter into a long-term PPA. Right. So all conditions to the PPA have been met with as in terms of signing of all the documents as well as is the transmission corridor available? Transmission corridor Chhattisgarh availability to East is absolute fine availability to North with some restriction is there so is in West. Transmission corridor to the South is not there at this point of time and it could a couple of years I understand for the transmission line to be decongested. Tariff we already have a cost plus tariff PPA with the state of Chhattisgarh for a part of off take and the balance are in process of being tied-up. Okay, right. So again secondly, coming on the gas part of the business now so if you could indicate some sort of economics how this whole RLNG base production is going to work out to? We won this auction at a PPA tariff of Rs that was the cap on PPA tariff and PSDF subsidy from GOI of Rs We have find a PPA we are signing a PPA today or tomorrow for Vemagiri with Andhra. For Vemagiri power plant our gross inflow would be Rs. 6.14, 4.70 from the Andhra Pradesh government that would be the tariff we bill them and Rs will come from Government of India. This could meet obviously our fuel cost requirement all our variable O&M and fixed cost and leave decent some of money for interest servicing to the existing lenders. GREL also we won one unit 25% PLF equivalent gas. That power is also being procured by AP. It has agreed to procure that power for which PPA should be signed again in the next two three days. The PSDF support is the same. So again here Rs of which AP will give 4.70 and 1.44 will the support? For GREL intake maybe slightly less Rs because we did not have existing PPA but Rs would be there, this may be around 4.50 Sir could you give me the spread that you will earn out of both of these plants net of all the OPEX? Can I come back on it? Or I will give you range Sir I am basically trying to understand how much interest we will cover out of the cash flows from running this operation sir at both the plants? I think for a four month period it would be around 25 crores. Page 8 of 14

9 H.R. Gala: H.R. Gala: H.R. Gala: Around 40% of the interest coverage will be cover. 40% of the interest will be covered at both the plants? Yeah. As you would know this scheme which the government has come out is two years scheme. Four months are categorized as monsoon months for which they have bid out. The rest eight months are non-monsoon months which will come up for bidding once this period of June to September is getting over. We will move on to the next question please so that we can come back again. Thank you. Next question is from the line of H.R. Gala from Panav Advisors. Please go ahead. Sir it is very encouraging to learn that after several years of issues I think now we are seeing the end of the tunnel. At what level do you think we will be able to be reporting positive numbers in FY-16 given all the positives and the things that you are enumerating? It is very difficult to answer a very direct question. If you can just give an indication. No, I mean what I can only say every effort is being made from the group to ensure that we turn out positive results this year. That is the best I can tell you because it will be a combination of divestment, it will be a combination of refinancing and also the operationalization. And also as we have been telling GMR has to receive totally around 10,000 crores in terms of receivables. If you take out 5,000 crores which is our claim on the Maldives Government, in the energy business itself we have to receive close to around 5,000 crores on that and you have already seen some of the results have already started in that. In airports, there is even if you take out airports separately in energy and high ways alone we have to receive totally 2,700 crores so now that positive results has now just recently happened in EMCO we received a 50 crores DGFT claim, 150 crores we received last year and another 593 crores has to be received from DGFT so I only say that we are hopeful now that the things as they say good days are coming we hope we all share that optimism. For example, say basic important thing is change in law and the coal pass through alone will be giving us more than 450 crores of rupees. So I cannot put on finger on pulse and say yes, it is going to happen next month but looking at the trend we feel in the next few months all this should happen. In Vemagiri for example past loss plus the MAT claim of 24 crores so this itself will give me 592 crores and in transmission we have to receive as much as 127 crores of which in the last month we received 14 crores so you can see that the trend of recovery has started and we are hopeful that a lot of these recoveries will be made during the course of the current year. Sorry, I did not get your name. Yeah, my name is H.R. Gala. I am from Panav Advisors. Just last question form my side sir as far as these divestments are concerned it will be some surplus assets that we will be divesting or some of the operational assets under BOT et cetera that we are planning. There is no exception for this of course except this rate we will be quite choosy on what we decide because at the end of the day any distressed sale will not be doing any good to the investors nor for the group so we are keeping our tentacles completely open and engaging with variety of people it will be unfair for me to point out this asset or that asset possibly when we have significant progress to record and we will be definitely we will able to come and share but I can tell you that a very large team is working in all these areas of divestment. Thank you. Next question is from the line of Shankar K from Edelweiss. Please go ahead. Page 9 of 14

10 Madhusudan Bagepalli: Madhusudan Bagepalli: Just on the Chhattisgarh PPA currently you still have that MoU with the Chhattisgarh government and it is largely on regulatory tariff right? Yeah, actually that PPA is actually spread into two parts and only 5% is to be supplied at the variable cost and balance is as per the CERC tariff. We received communication as you are aware from the government that we are at a power surplus state now and we are still in negotiation with the state government for actually implementing PPA and as Ashish mentioned earlier in that due to these coal mines I think Chhattisgarh project will be one of the lowest cost producer of power, so I do not see any reason why the government will not take this power. Okay. Now basically apart from 35% you do not have any PPA, right? No, we have certain short-term PPAs that is why I mentioned when I was mentioning actually these are very short-term PPAs of one year and we are working towards the medium and long-term PPAs. So what is the quantum of the total capacity that you have now in terms of PPAs including this 35%? Madhusudan Bagepalli: Short-term I am not able to recall the number it should be in the range of about 300 megawatt. Shankar just waiting for the CFO to join I will get back this specific question I have noted it. Okay. Slightly on a bigger thing like you know that the government has given you the coal mine for the power plant and assuming that you will some kind of PPA yes, we are in a peculiar situation where the states are not calling for the PPA and you have minus practically ready the way your team indicated that you can start production probably a month. Now what is a window period that you have or what is that you need to do with the coal that you mine in the interim period because you do not have a PPA? No, of course I will Ashish are you? Yeah, if I may add there Go ahead. The coal mine agreement which we have signed allows us to sell 15% of the capacity as merchant. It also allows us to sell interchangeably against long-term PPA and medium PPAs I think team is working on the power trading team is working on tying up medium term PPA so anything above one year is termed as medium term so those are the PPAs which are low in the radar but those are PPAs which we are running for. As we understand UP is coming out with long-term PPA with 3,000 plus megawatt and while the terms are being changed Andhra and Telangana are also there out in PPA race but UP is coming with 3,500 but immediate term your question what will we do, 15% merchant power more than one year PPAs are being stitched together currently. Yes, but say let us assume by the time we will sign the PPA the medium term PPA and all it takes four to five months but your plant is ready your mind is ready to start production by July and you have stipulated target to achieve every year so what do you between July to Say October or whatever will you mine or you will not mine? Yeah, I will explain one unit is 685 megawatt this would take few decimal points around 2.6 million to 2.7 million tonne of coal that is the production of Talabira mine roughly. So whatever comes out of Talabira can feed 685 megawatt one unit and with the existing PPA of 35% of the total capacity that itself is 485 megawatt which we have plus this medium term Page 10 of 14

11 PPA is being stitched. We believe there would not be as I am giving to understand substantial gap. Sidharath Kapur: Sidharath Kapur: Sidharath Kapur: Okay. But I thought the Talabira you are planning to submit a revised mining plan so that you can exhaust the entire reserves in three years. So the output obviously the annual output will be greater. Yeah, Talabira is currently 3 million tonne the declared reserve is at 3 million tonne roughly three years as of now unless we increase the reserve some cost per extension of mining lease areas we bring some external coal so Talabira will nicely fit into one unit as I have mentioned we have applied for tapering linkage and we would be pursuing it. Government has decided to give tapering linkage to all those who have won mines in this auction that is the supply which will bridge for the second unit till Ganeshpur will come mostly. Okay, I will take follow-up question offline on that. But Madhu a couple of things on the broad balance sheet side. If you look at the numbers that has given on slide six on net debt and gross debt and all. Optically it seems to be continues to be elevated levels that we are raising 3,000 odd crores of equity money is that something like a time lag because some of the rights issue or some of those things are still not factored in those numbers? No, actually see this increased is happened basically on account of draw down of loans. See Chhattisgarh we are continuously rushing towards completion of the project we drew as much as 1,200 crores we drew. We try to cover all the losses in EMCO and Kamalanga by drawing additional funds because we have got around 300 crores extra there so which would have in otherwise has been to brought in so those all loses and all are being taken care off. We also drew about 650 crores in Cebu Airports. So all this put together, apparently the debt seems to have gone up but I want to assure you that we raised 3,000 crores and majority of this has gone to reduce the debt so whatever result that you are seeing not only we have contained the debt but whatever the drawal has been only to complete the projects and take over the new projects like Cebu. Okay. Lastly any update on DIAL real estate monetization and the Hyderabad Airport order? Babu? Yeah. Let me mention about the real estate this is Sidharath Kapur here. As we had mentioned earlier it is work in progress and approvals have already been taken for about 35 acre. We are in the process of preparing a full plan because what we want to do we want to go to the market with a complete master plan for real estate and that is underway right now. So it will take a bit more to move to the next stage of monetization will hit the market but let me tell you it is work in progress and it should be out in the market in the next few months. Okay. So should we expect in the first-half of this fiscal of second-half? Well since we are already in June right now I would say maybe in the early part of the secondhalf. Okay. And HIAL order? HIAL there is nothing which is currently expected from the regulator but we are expecting order from the Government of India about Hybrid till and that is an expectation about it and we are hoping that should come out maybe in the next few days and we have some positive outcome on that. As far as the tariff order is concerned now if the government comes out with the order on hybrid till then of course we will have to go back to the regulator and rework the entire tariff but beyond that at this stage, there isn t much expected from the regulator per say. Thank you. Next question is from the line of Vinay Agarwal from Edelweiss. Please go ahead. Page 11 of 14

12 Vinay Agarwal: Yash Arora: Management: Yash Arora: Yash Arora: Vinay Agarwal: Yash Arora: Vinay Agarwal: Yash Arora: Vinay Agarwal: Jagjeet Dadiala: Vinay Agarwal: Jagjeet Dadiala: I wanted to ask on Kamalanga and EMCO plants. How much of the PLF will be forecasted for next year? And secondly, are these plants profitable? Yes, one second. Yash is there in the call? Hello? Yash, are you there? Yes, I am there. Yeah, can you please take the call please? Can you take the question? Yeah, at Kamalanga we plan to operate at 85% PLF during this financial year and we will be EBITDA positive going forward and today also we are EBITDA positive going forward also we will be EBITDA positive. Sir at PAT level I wanted to know will it be profitable after servicing the interest no? PAT level because our CERC petition we are awaiting the order of CERC once that we receive we will be PAT positive but for interim period the cash loss will be substantially reduced going forward with the increase in the PLF. And in terms of PLF tie-ups since we are expecting 85% utilization entire PLF being tied up and there is no transmission issue right now? There is no transmission lines issues as of now and which got sorted out in the March itself. As far as tie-up is concerned I think we have the PPA to the extent of 85% of the capacity and that 15% we are doing a short-term PPAs and we are hopeful there will not be any challenge on that. Like once we are done it for 300 megawatt for Punjab likewise we have done some more also and in the process we will keep on doing it. And what about EMCO are we making cash profit there? This is Jagjeet from EMCO. I would just like to update that as of now our two PPAs are fully operational MSEDCL and DNH. We are awaiting the operationalization of Tamil Nadu which was supposed to have started by now. We have applied for that open access but there is West to South corridor constraint. We are hopeful that we will be very close to that cash profit once Tamil Nadu PPA becomes operational. we are estimating that it was suppose to start sometime in June but maybe one month or two months here or there might delay the process but if Tamil Nadu starts on swing full plus we should be okay but we will be operating at 85% if Tamil Nadu happens basically. So without this Tamil Nadu sir what capacity we will be Without that Tamil Nadu being there we are going for bilateral in fact just for your information we have tied up with Telangana for supplying 70 megawatt for two months going sometime in the peak hours which is in the during night hours so we are looking out for some other PPAs till the time this Tamil Nadu actually starts so we are operating at a PLF overall PLF in the range of 68% to 70% but once Tamil Nadu happens so we are very hopeful that everything would be on stream and we will be able to be close to PAT or cash profit. Thank you. It is a reminder to all the participants, anyone who wishes to ask a question may press * and 1 on their touchtone telephone. Next question is from the line of Vibhor Singhal from Phillip Capital. Please go ahead. Page 12 of 14

13 Vishal Sinha: Sir just wanted to ask about FY-15 what is our estimated CAPEX that we will be doing in FY-16 in all the projects like Chhattisgarh, Bajoli Holi, Alaknanda and Philippines Airport together? And what would the debt that we would drawing against that investment? Sir we will come back to you on the exact number but I can say that other than the declared project things in Chhattisgarh we do not have any requirement in EMCO and Kamalanga. Bajoli Holi is already funded and whatever drawals it will continue it will there as demanded by the project developments. There will be no any new CAPEX per say accept now that we have got the coal mines in Chhattisgarh that has some amount of limited investments will be there but it will not be more than 40 crores to 50 crores other than that I am not seeing any kind of particular CAPEX but in any case we will compile and communicate the exact number. So how much is remaining on Chhattisgarh? Chhattisgarh what? How much of CAPEX is remaining on Chhattisgarh if I can have that number? Chhattisgarh I think we may have to invest another thousand crores or so and already it all fully funded as you are aware it is now work in progress. So thousand crores will be the equity investments from our side? No, total CAPEX. There are still some equity requirements but we are working in arrangements where the project will be completed without any kind of immediate equity contribution from GMR. Thank you. Participants if you like to ask a question please press * and 1. Next question is from the line of Ashish Shah from IDFC Securities. Please go ahead. Sir in the power business we have seen that in the presentation we see the other expenses has gone up very sharply. Any particular reason for that because fuel cost are more or less stable but the other expenses have gone up pretty sharply. Which slide you are there, sir? One second I will tell you that slide number sir. Can we park that question looking into the number so just to come back to you if you do not mind. Your good name sir? Ashish from IDFC sir. Okay, just note down. We will come back to him. Sir another question on the road projects so two of your projects Hyderabad Airport, Vijayawada, Hungund Hospet would have seen a toll increase on 1st of April what is the extend of increase you have got? Sri. What is the extent of increase in Hungund Hospet, Hyderabad and Vijayawada? Hungund it is 6.4% and Ambala Chandigarh it is 5.98% it is already there in the presentation 23 number page. Okay. That is for 1st of April, 2015 I was talking in the starting this year. Page 13 of 14

14 Sreemannarayana: Madhusudan Bagepalli: No, this year it is now going to be neutral WPI linked. Okay, fair enough. Sir I was referring to slide 20 so whenever you can if you can just get back it will great sir. Yeah, Madhusudan please can you explain? Yeah, what happened in the last year projects Kamalanga and EMCO were not operational somewhat those expenses were being capitalized last year especially in Kamalanga. Now all expense have started coming and hitting the P&L that is the broad level reason for this. Thank you as there are no further questions from the participants, I would now like to hand the floor back to Mr. Madhu for his closing comments. Over to you, sir. So ladies and gentlemen thank you very much for your active participation and I also thank all my colleagues and my CFOs for their contribution. I can only remind all the listeners that this energy portfolio which has been a real problem for us slowly we are putting all the efforts to make it completely profitable and which is the kind of three pronged strategy of in terms of refinancing, operationalization, as well as divestment, we are very-very confident of turning around and already you have seen the signs of turnaround very quickly. The EBITDA has gone up almost by about eight times. So I only hope that this number only will keep growing in the coming month. So with those remarks, I once again thank you ladies and gentlemen and we look forward to active participation as well as guidance in the coming days. And some of you who have asked this question I am sure particularly on coal and gas some may have to have more questions. Feel free to reach out to Mr. Amit Jain in our IR and anybody else also would like to have any other clarifications we will be very happy to provide all the details. With those thank you very much once again. And I hand over it back to the operator. Thank you very much, sir. Ladies and gentlemen on behalf of GMR Infrastructure Limited that concludes this conference call. Thank you for joining us. And you may now disconnect your lines. Page 14 of 14