Azure Power Q1 Results. 7% QoQ Growth, Back Into Profits

Azure Power, one of the leading solar power developers from India, and listed on the New York Stock Exchange (NYSE), has announced its Q1 results.

The Firm had the following key highlights to showcase:

• Megawatts (“MW”) Operating* were 2,052 MWs, as of June 30, 2021, an increase of 23% over June 30, 2020. Operating, Contracted & Awarded MWs* were 6,955 MWs, as of June 30, 2021. Contracted & Awarded megawatts include 4,000 MWs for which we have received Letters of Award (“LOA”) but the Power Purchase Agreements (“PPAs”) have not yet been signed.
• Operating revenues for the quarter ended June 30, 2021 were INR 4,440 million (US$ 59.7 million), an increase of 13% over the quarter ended June 30, 2020.
• Net profit for the quarter ended June 30, 2021 was INR 697 million (US$ 9.6 million). The increase in net profit was mainly due to an increase in operating revenue by INR 500 million (US$ 6.7 million),
• Adjusted EBITDA for the quarter ended June 30, 2021 was INR 3,668 million (US$ 49.3 million), an increase of 11% over the quarter ended June 30, 2020.
• Non-GAAP Cash Flow to Equity (“CFe”) from Operating Assets for the quarter ended June 30, 2021 was INR 1,844 million (US$ 24.8 million), an increase of 12% over the quarter ended June 30, 2020.

Thus, while the results based on corresponding quarter look satisfactory, it’s the quarter on quarter change that looks interesting. Growth has been anaemic for now, at just 7% of additional capacity added, to take total capacity in operation to 2052 MW.

A worrying indicator is the increase in cost per MW, where the firm has flagged a 33% increase to $0.52 million, as compared to $0.39 million in Q4 of 2020-21.

Average collection period or DSO (daily sales outstanding) for billings is at 75 days now. Andhra Pradesh, at 646 days, and Karnataka at 261 days, are the standout problem states when it comes to collections for the firm.

The firm has given a guidance of 2750-2955 MW of operating assets by the end of March 2022. It has also indicated progress on 4000 MW of projects awarded by SECI, which have been stuck pending signing of PSA’s by SECI.

With Q2 and Q3 historically the lower quarters when it comes to plant load factors, the firm will hope to see movement on many issues to end the year in line with its guidance for a revenue of Rs 1790 cr (17,900 million) to 1890 cr for the full year.