Azure Power Global Limited (AZRE) Q3 2022 Earnings Call Transcript

Azure Power Global Limited (AZRE)
Q3 2022 Earnings Call
Feb 28, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, good day, and welcome to Azure Power's third quarter fiscal 2022 earnings conference call. [Operator instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vikas Bansal, head of investor relations at Azure Power.

Thank you, and over to you, Mr. Bansal.

Vikas Bansal -- Head of Investor Relations

Thank you. Good morning, everyone, and thank you for joining us today. On Friday evening, the company issued a press release announcing results for the third quarter of fiscal 2022 ended December 31st, 2021. A copy of the press release and the presentation are available on the Investors section of Azure Power's website at azurepower.com.

With me today are Ranjit Gupta, CEO; Murali Subramanian, COO; and Pawan Kumar Agrawal, CFO. Ranjit will start the call by going through key highlights and business updates. Murali will then follow with an update on our projects under construction and an industry update. Pawan will then provide an update on the quarter, and then we will wrap up the call with Ranjit providing Quarter 4 financial year 2022 guidance and the initial financial year '23 guidance.

After this, we will open up the call for questions. Please note, our safe harbor statements are contained within our press release, presentation materials, and available on our website. These statements are important and integral to all our remarks. There are risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements.

So we encourage you to review the press release we furnished in our Form 6-K and presentation on our website for a more complete description. Also contained in our press release, presentation materials, and annual report are certain non-GAAP measures that we reconcile to the most comparable GAAP measures, and these conclusions are also available on our website in the press release, presentation materials, and annual report. It is now my pleasure to hand it over to Ranjit.

Ranjit Gupta -- Chief Executive Officer

Thank you, Vikas. Very good morning, everyone. It's almost two years since COVID first broke out globally. Since then, the world has started to move on, and we all have learned ways to coexist in this new normal.

The fact that India came out of the third wave recently in less than a month and without much care underlines this progress and the importance of vaccination and COVID appropriate behavioral changes. ESG has always been at the core of our business success. We recently released our third sustainability report for the period 2020, 2021 in which we have highlighted a number of significant steps taken toward improving our ESG standards. We significantly reduced net water consumption across our plants from 122 liters per megawatt hours in 2017, '18 to 49 liters per megawatt hour in 2021, and this has further improved to 30 liters per megawatt hours in the current year.This has been possible with active deployment of robotic and dry cleaning technologies at our plants.

We continue to aim for net water neutrality in our operations by 2023. We have maintained our carbon-neutral status since 2019 and expect to further create significant positive impact as we look to migrate to 100% electric vehicles by 2030 under our electric vehicle policy. The biggest news for us since the last call has been signing of 2,333 megawatts of PPA taking the total PPA power purchase agreement signed to 2933, 2,933 megawatts of the 4,000-megawatt SECI manufacturing capacity. This 2.9-gigawatt capacity assures sustained base growth for Azure over the next four fiscal years and the attractive tariffs provide a long runway of profitable value accretive growth for our shareholders.

We continue to participate in auctions beyond the four-gigawatt capacity and have received 470 megawatts of LOA. These include one plain vanilla wind project and two wind solar hybrid projects. We are developing 1,000 megawatts of wind sites across the best wind regions in India to structure projects we have won and prepare for projects we intend to win. As we begin to implement these projects starting next fiscal, we reached out to our shareholders around end of this quarter to raise $250 million via our first rights offering, which was completed post-quarter end.

Our capital team has been unstoppable this year. In addition to our first solar green bond refinancing in August, with the lowest coupon dollar green bond till date by any renewable company in India. We have refinanced one gigawatt of our operating projects, sharing more than 200 bps in interest cost. These are long tenor refinancing with interest rates fixed for at least three years on average.

This 200 basis point reduction in interest for these one-gigawatt project is expected to release approximately $10 million of EBITDA toward free cash flow annually. We continue to see steady improvements on key operational parameters we report. We had 37% more megawatts operating in Quarter 2, Quarter 3 this year than we did at the same time last year. There has been a 27% year-on-year increase in EBITDA from our operating assets and a 58% increase in cash flow to equity from operating assets during the quarter.

From an industry perspective, the renewable energy sector in India continues to be a high priority for the government. India recently announced green hydrogen and green ammonia policy, which will help boost development of renewable energy capacity. Hydrogen and ammonia are envisaged to be filled with the future, which will help mitigate India's fossil fuel dependency. Industry is also expecting a green hydrogen purchase obligation, which may push green hydrogen production.

The budget allocated an additional $2.6 billion toward production-linked incentive program to boost domestic solar manufacturing as we move toward reducing dependency on imports in the solar value chain. After notifying rules for overhauling of transmission system planning and easier access through general network access, the government has recently approved second phase of the Green Energy Corridor Program, which will aim to add over 10,000 circuit kilometers at a cost of $1.6 billion to support evacuation of 20 gigawatts of RE capacity from seven states. The budget also envisages sovereign green bonds to be launched for funding green infrastructure development. These proactive measures underline the importance with which sector is growing in the country and focus of policymakers in ensuring that it delivers the promise of growth and objectives for India's goal of self-reliance and energy by 2047, i.e., 100th year of Indian independence.

This also presents a reassuring scenario for global investors who are keenly tracking the increasing investments in this sector. As I mentioned last time, we have been strengthening our capabilities in clean energy domain in India and are in the initial phase of deep engagements with value chain players in the green hydrogen space. Further, to address and capitalize on a growing sense of urgency in corporate consumers to walk the decarbonization pathway, Azure has structured a new business unit to drive this energy transition on the dedicated and capable leadership. The energy transition business is focused on delivering innovative solutions for power and heat for large energy consumers including steel, cement, metals, glass, and other companies to accelerate their sustainability goals and targets.

These solutions include round-the-clock RTC Power, peak and dispatchable power based on storage, green steam, green hydrogen, etc. I want to update about a change in our Board as we announced earlier in the day to day. Ms. Christine McNamara joins the board effective tomorrow as an independent non-executive director.

She will take over the chair of the audit committee. An integral part of the board for six years, Mr. Arno Harris indicated his desire to pursue other commitments. We express our gratitude to Arno for his guidance at the board and for the management over these years.

I wish him all the best, and I personally look forward to stay in touch with him. We welcome Christine to the board. Our extensive experience speaks volumes of our leadership strength, and we look forward to working with her. I joined Azure almost three years back when we took up the task of consolidating and realigning our strategy toward business growth.

I'm very excited to see that we have crossed that bridge and positioning Azure strongly and firmly with a super value accretive pipeline for not months but years to come and add significant potential growth with our strides in energy storage, green hydrogen, and energy transition space. We continue to look for suggestions from our investors and stakeholders on how we can further improve our disclosures and make it easier for you to understand and value our business. With that, I would like to turn it over to Murali.

Murali Subramanian -- Chief Operating Officer

Thank you, Ranjit. This is probably the shortest time between our two reporting. But as you heard, Ranjit, we have significant updates from this -- from our business. Against all odds and navigating through a brief third wave of COVID in India subsequent to the quarter end, our engineering, procurement, and construction teams have worked tirelessly to bring us to the finish line on our construction projects.

We commissioned 273 megawatts since we last reported, and requisite material for balanced megawatts are already at site or in transit. This places us well to be in the range of the megawatt guidance for this fiscal. Our largest project, 7,600-megawatt Rajasthan 6 is now fully commissioned, and we expect it to deliver superior performance to our portfolio from the next fiscal onwards. The second 300-megawatt Rajasthan 8 is also in line to be fully commissioned shortly.

And even though Rajasthan 9 was impacted due to supply related challenges, we will persevere. While this is about under-construction projects, we are very excited about our four-gigawatt projects where we now have signed PPAs for almost three gigawatts, and we look forward to bringing these up to shovel-ready stage very quickly. We have provided a scheduled time line for these projects on Page 5. We are at an advanced stage of development work.

And depending upon timing of material procurement, we would look to bring forward some of these time lines. As Ranjit pointed out, these projects give us ample space to work our way through on implementation and ensure superior returns compared to current market. We have provided some highlights of our ESG updates on Page 6 and 7. Our focus on reducing our water consumption has really paid off and conserving this scarce natural resource.

Our net consumption has further reduced to 30 liters per megawatt hour in the current year and we are well placed to be net water neutral by 2023. We have completed the majority of our CSR-related projects we undertook this year related to COVID support, education, and health, positively impacting over 2,000 beneficiaries. We are extremely proud of where we play in ensuring a better world for our communities, which are so important for our business. Similarly, safety is one aspect that is paramount to us.

The awards that we won for our safety culture as I reported last time, demonstrate our efforts in this area. We continue to be rated highly on ESG with AA rating by MSCI and low risk categorization by Sustainalytics. I would like to keep it short this time and let Pawan discuss the quarterly results. But as I said earlier, we are very excited about our next phase of growth at Azure.

We have traveled in our journey so far with a lot of hard work and learning accumulated by our teams. We continue to aggressively pursue digitalization and automation at our plants and construction sites. With large-scale construction projects now operationalized, the next few years of growth firmly in hand with one of the largest and most value-accretive pipelines in the industry. And with the addition of new businesses in the form of energy transition, storage, and green hydrogen, we truly think Azure is a top and compelling investment study.

Handing it over to Pawan.

Pawan Kumar Agrawal -- Chief Financial Officer

Thank you, Murali. I'm happy to report that we have exceeded upper end of our revenue guidance for this quarter as well, with revenues of $60.2 million or $58.8 million, excluding Rooftop, as against the guidance range of $55.3 million to $58 million. As of December 31, 2021, we were operating 2,523 megawatts on a PPA or AC basis, which is 37% higher than what we were operating a year before. Our portfolio was at 7,425 megawatts at the end of the quarter, which includes signed PPAs for 2,933 megawatts and another 1,537 megawatts for which PPAs are awaited.

We have updated our run rate metrics with 5,888-megawatt contracted capacity now in the portfolio, that is 2,955 megawatts that will be in operations and 2,933-megawatt PPAs recently signed. For these contracted capacities, we expect the run rate revenue to be $581.2 million with gross margins in the range of $530 million to $560 million and cash flow to equity of around $125 million to $200 million. On our Rooftop sale update, we have closed the transfer of 64 megawatts assets across seven SPVs subsequent to quarter end and are in the process of completing transfer of balance 89-megawatt capacity, which is awaiting requisite approvals, and we expect to close by end of March 2022. This sale will enable freeing up of substantial management bandwidth in addition to recycling capital and discipline for future growth.

While these Rooftop capacities are excluded from discussion of our portfolio megawatt numbers, we continue to consolidate Rooftop financials until the transfer process is completed. On Page 12. After adjusting first half compensation expense reversal, our EBITDA has been $50 million or 29% increase against 27% increase in the revenues from the same quarter in the prior year. Turning to G&A on Page 13.

Our G&A increased by 10%, in line with our expectations we communicated earlier. We have made substantial progress on refinancing operating projects this year. Prime example is our largest project, the Rajasthan 6, a 600-megawatt SECI project, which we fully refinanced in just over a month of commissioning at the lowest interest rate for any project in our portfolio at 7.2% per annum, which will be fixed for the next 42 months. Our overall average interest rate continues to see substantial decline this year, from 9.2% at the last fiscal closing to 8.8% at this quarter end.

The average further improved to 8.5% considering the refinancings already completed subsequent to the quarter end. These are substantial savings on the largest cost item in our P&L. Indicatively, 100 basis point reduction in our interest rate call on about $1.5 billion debt would release approximately $50 million annually in the system. This refinancing at lower coupon and fixed rates reflects strong credit profile of Azure Group.

We now have about a gigawatt of our operating projects outside the bond portfolio, having at least 200 basis points less interest costs than before, and this will not change for three years on an average. This is a significant actualization that we bring amid market concerns on interest cost. Our days sales outstanding, DSO, remains consistent and has held up very well, even in the last two years of turmoil, thereby demonstrating the inherent strength of Azure's strategy and portfolio. Our DSO as of December 31, 2021, were 113 days compared to 116 days as of March 31, 2021.

These are industry-leading DSO numbers, which we believe will further improve substantially with the commissioning of our SECI projects and with favorable orders received in Karnataka from the regulatory GESCOM and SESCOM matters, and from the Honorable High Court in the HESCOM matter. We are also hopeful of a favorable judgment very soon in Andhra Pradesh, where hearings have now been concluded and order is reserved. On Page 14, you can see that our EBITDA from operating assets increased by about 27% year on year. And that cash flow to equity from operating assets rose about 58%, owing to incremental operating capacity that we added compared to the prior year.

Net debt for operating assets were about $1.24 billion and EBITDA for the last 12 months were about $205 million, resulting in a net debt-EBITDA ratio for operating assets of 6.1 times as of December 31, 2021. This important metric continues to see substantial improvement as megawatts we add stabilize and fully contribute to the EBITDA. Finally, looking at Page 16, providing balance sheet information. We had about you as $150 million of cash and cash equivalents, and our net debt stood at approximately $1.48 billion.

We are very excited about the growth path ahead of us with strongest pipeline, strongest counterparty, and strongest credit to work with. We are thankful to our investors and shareholders for continuing to support this journey and helping us successfully raise $250 million of equity under the rights offering. We are always looking out for valuable and critical advice, suggestions, and dialogues from our stakeholders. Now I'll pass on to Ranjit to provide some commentary on the guidance.

Ranjit Gupta -- Chief Executive Officer

Thanks, Pawan. We are happy to report that we have been able to achieve higher revenue compared to our guidance for this quarter while being in the range on our PLF guidance. As noted, despite supply related challenges in our SECI 300-megawatt Rajasthan 9 project, we still expect to close this fiscal at higher end of our megawatt range provided earlier, i.e., 2,750 to 2,955 megawatts. We have, therefore, narrowed our range at 2,855 to 2,955 megawatts for fiscal year ending March 31, 2022.

For fourth quarter fiscal '22, we expect revenue to be between INR 5.21 billion and INR 5.2 billion or $68 million to $70 million at the exchange rate as of December 31, 2021, and the PLF to be between 22.5% and 23.5%. For our initial guidance for the next fiscal, as of now, we do not expect that we will commission incremental megawatts in AC term by the end of March 31, 2023, while we expect revenues to be between INR 22 billion and INR 23 billion or $295.7 million to $309.2 million at the exchange rate as of December 31, 2021. On our long-term outlook at Page 18, with 2.93 gigawatts firmly in place with signed PPAs, we have updated our contracted portfolio for run-rate gross margin and CFE, cash flow to equity. With this, we will be happy to take questions.

Questions & Answers:

Operator

[Operator instructions] The first question is from the line of Justin Clare from ROTH Capital Partners, LLC. Please go ahead.

Justin Clare -- ROTH Capital Partners -- Analyst

Hi, everyone. Thanks for taking our questions here. First off, I was wondering if you could talk about where you are in the process of signing the remaining PPAs for the four gigawatts of projects that you have with SECI. So for example, have PSAs has been signed yet for any of the remaining megawatts? And what's your expectation here on timing?

Ranjit Gupta -- Chief Executive Officer

Thanks for the question, Justin. So there is a small 50-megawatt power purchase agreement that we expect to sign this week or the week after. And apart from that, SECI has made some progress on the next -- around 1,000 megawatts that we need to sign. So getting within the next quarter, we will be able to sign the remaining.

There were some other capacities, Justin, which were yet to be signed up. And I believe SECI's focusing on those first because our capacity -- there is about 300-odd megawatts which is left to be signed up for November 23 commissioning, whereas about 700 megawatts is left for commissioning in four fiscals now. So there is plenty of time for that to happen. So the focus at the moment for SECI is to try and get the 300 megawatts odd, which are needed to get to one gigawatt for the November 23 commissioning.

Justin Clare -- ROTH Capital Partners -- Analyst

OK. Got it. That's helpful. And then for the four gigawatts of projects with SECI, you provided the time line with the schedule.

So you have 600 megawatts scheduled for November of 2023, with a gigawatt in each subsequent year. What is the potential to bring these projects on earlier than that schedule? Could you potentially bring these on up to six months ahead of time? Or what's the opportunity there?

Ranjit Gupta -- Chief Executive Officer

So, Justin, I'm looking until the projects that -- I mean the auctions that are taking place currently. As long as those auctions continue at the pace that they are continuing at, and we continue to win like we have won over the last six months, we will not like to bring up the commissioning simply because of the fact that we have tariffs that are locked in. And as you know, typically, capex keeps on moderating over the years. So with locked-in power purchase agreements and locked-in tariffs, we would like to bring these projects up on schedule.

That is our current plan. However, as far as the development path is concerned, the development is going on full flow. As we have mentioned in the past, our activity is already in place, and we have started the process of trying to find the land and acquire the land even for projects that are going to commission in '24 and '25, and '26. So we will have the basics in place.

But the actual commissioning, we will take a call closer to the time, depending upon what we have in hand for construction and how we see the change in the cost of modules.

Justin Clare -- ROTH Capital Partners -- Analyst

Got it. OK. Yeah, that makes a lot of sense. So then considering that, how active do you expect to be in participating in new auctions over the next year or so? How many megawatts could you potentially look to secure? And essentially, what is your capacity to maybe slot additional projects in, either before or in between the other projects that you already have PPAs for here?

Ranjit Gupta -- Chief Executive Officer

That's a very important question, Justin. And all along, right, in the last two years and two and a half years, we have been very conservative in our outlook. And we have always said that we have the capability of doing between 800 to 1,200 megawatts a year. And it was on the back of the fact that we had this large portfolio to commission.

And we were still struggling through that part because of COVID and everything else. Over this fiscal, we have gone and commissioned almost everything that was pending on our books. And that has given tremendous confidence to the team and to all of us in the company that we can go out and do these megawatts, and we can do them well. We can do them on time, and we can do them on budget on such a large scale.

So we believe that year on year, our capability will increase from the 1,000 megawatts that we are able to do in the current fiscal. It will continue to increase. And we will challenge ourselves because it is not only -- as you saw in our presentation, it's not only putting megawatts through our core business, but also we'd be looking to put megawatts behind green hydrogen, megawatts behind energy transition. We will take part in storage bids.

There are some storage bids coming up. So it will be a combination of work that we will do, and we will deploy our resources and our dollars to where we think we can get the best deployment of capital.

Justin Clare -- ROTH Capital Partners -- Analyst

OK. Great. Appreciate it, I'll pass it on.

Operator

Thank you. [Operator instructions] The next question is from the line of Maheep from Credit Suisse. Please go ahead.

Maheep Mandloi -- Credit Suisse -- Analyst

Hey. Good evening over there, and thanks for taking the question here. So Ranjit, thanks for the clarification on some of the completion and how much we can expect earlier as well. But maybe on that, you alluded a little bit on module supplies.

Maybe if you could just talk more about the module supply and how is that shaping up in the next year? And specifically, with the BCD and the ALMM coming into effect, does that change your assumptions around availability of pricing for modules?

Ranjit Gupta -- Chief Executive Officer

So thanks for the question, Maheep. And it's a very, very, very important question, and the industry has been lapping with this question for the last six to nine months. I must say that what has happened over the last two or three months has given us a lot of comfort and confidence, actually, on this situation, right? Because the PLI scheme -- the first round of PLI scheme was awarded a couple of months back. I think it was in December if I remember correctly.

And that was almost one-third or one-fourth of what had actually been tendered in the PLI tender. In the budget, now the government has allocated more money. So there is over 50 gigawatts of PLI capacity, which has been sanctioned by the government. And that gives us a lot of comfort that these -- and most of the players that have signed for PLI are large corporate houses or already experienced manufacturers.

So also, if you see that some of the companies that are in that list are actually going to set up ingot and wafer facilities also. And as you know, even though you might win a 2,000 or 3,000 or 4,000 megawatts per annum solar module manufacturing capacity -- and that is a possibility to set up that kind of capacity. However, when you set up an ingot and wafer facility, these facilities need to be a lot larger to be cost effective, to be cost competitive. So, therefore, even though on the face of it, it looks like we're going to get as far as the ingot and wafer facilities are concerned, only 15,000 to 20,000 megawatts per year, but it's likely going to be larger because the plants themselves are going to be larger.

And we also know, on the ground, that many companies have already started putting up their solar module manufacturing facilities. So just like what we had envisaged when we spoke in last quarter and last to last quarter, we do believe that the period from first of April to perhaps September or October or even December this year would be challenging. There will be some bottlenecks, perhaps, as these plants come up and get stabilized. But sooner than later, I believe that the situation will start to ease out and next year should be much, much better in terms of availability.

So we are lucky in that way, that all our capacity that we are currently in -- that we currently have under construction is already spoken for. We have already got -- the last model should have shipped today, the last few megawatts. So we have everything in -- in country by the middle of March. And then the next round of modules, we'll be buying either later in the year or beginning of next year.

Besides the fact that, as part of our model manufacturing investment, which is required as part of the SECI manufacturing tender, we have options on the line that is being built by our partner. So we are actually in a very comfortable position because we have a committed line coming up for us. And besides that, we don't need any capacity until the next year.

Maheep Mandloi -- Credit Suisse -- Analyst

Got it. And so I would presume ALMM would be dictating the prices. So should we still kind of presume that $0.60 per watt of -- assumption for the first SECI gigawatt -- the first tranche of the SECI four-gigawatt projects, is that still a fair assumption? Or do you expect that to change with the new policies coming in?

Ranjit Gupta -- Chief Executive Officer

Maheep, I would let Murali answer this question. Though I have a view on this, but Murali is probably closer to this.

Murali Subramanian -- Chief Operating Officer

I think the first tranche of this capacity is due only in November of '24, right, sorry, November of '23. And module procurement, if they drop prices, we will pick them up early. But if they don't, we have a lot of time. So I -- despite ALMM and the other concerns, I think we should be able to, if we wait it out, we'll get modules at a price which is comfortable.

As Ranjit mentioned, a lot of capacity is coming in, in terms of the upstream part of the value chain. And when that kicks in, the price will have to drop. There is also a technology curve that's pushing along by pushing costs down. So overall, we will wait and watch and see.

We are not in any rush to procure modules right now for this four gigawatt.

Maheep Mandloi -- Credit Suisse -- Analyst

Right. OK. And just the last one from me. This is just a small one.

In terms of the PLF for the year, how should we think about that? Should we expect like a similar uplift we saw in FY '21 to FY '22 going into FY '23? Or should we kind of just see more in line with '22? Thanks.

Murali Subramanian -- Chief Operating Officer

I guess, I can't remember on top of my mind -- top of mind what was the uplift from the last year to this year. But in general, more and more of our capacity is coming in Rajasthan, so that will push up PLF. In general, our newer projects are being overloaded to 140% to 150%. And so on a portfolio basis, once you factor in the legacy projects, the PLF will go up.

So yes, there will be a gradual sort of creep up of PLF, at least for the next couple of years.

Ranjit Gupta -- Chief Executive Officer

Maheep, just to -- on this PLF thing, right, we have already actualized PLF for the first three quarters and given a narrow band for Quarter 4. So perhaps Vikas can be in touch with you to give you an exact number.

Maheep Mandloi -- Credit Suisse -- Analyst

Absolutely. Yes, I will follow.

Operator

Thanks. [Operator instructions] The next question is from the line of Puneet from HSBC. Please go ahead.

Puneet Gulati -- HSBC -- Analyst

Thank you so much for the opportunity you give me, guys. My first question is, if I look at your portfolio revenue run rate that you've given out in this, especially, and compare it to what you gave out in the last quarter, you've added about 2,323 megawatts more in terms of PPA side, and that seems to suggest there is a 33% PLF that you're expecting from this. Can you give some light on what really is driving this 33% PLF versus the 28% which was expected earlier?

Murali Subramanian -- Chief Operating Officer

OK. So the exact number of 33%, again, not top of mind, but let me explain the principle. So we are moving into an era of bifacial modules. From the mono PERC, which we have installed in the current 1.2 to 1.3-gigawatt that we have.

Bifacial has an incremental yield, as you know. We are going to be going with the tracker-based systems. So that gives a yield uptick anywhere between 10% and 15%, depending on which -- what is the latitude of installation. So currently, since we're focusing largely on Rajasthan, we would expect to yield uptick purely from cracker in the range of 40%, another 4%, 5% from bifacial.

Bifacial can actually give you even higher results. So even we've seen results which are even better than that. So overall --

Puneet Gulati -- HSBC -- Analyst

So what was the basis for 4% to 5% result?

Murali Subramanian -- Chief Operating Officer

It can be better than that as well. It depends on something known as an albedo factor. It depends on the quality of the reflectivity of the soil, right? So if you have greater reflectivity, you get greater yield upticks. So a combination of bifacial and tracker, it's likely to push our yields up by almost 20%, right? So -- but then the overloading may not be as high as 40% or 45%.

It may be a slightly lower overall, maybe in the range of 35% to 38%. So a combination of all of these will bring your PLF to a greater number.

Puneet Gulati -- HSBC -- Analyst

OK. And if I were to think of -- in Rajasthan, the base PLF on AC basis, what should that number be?

Murali Subramanian -- Chief Operating Officer

On fixed-tilt mono PERC?

Puneet Gulati -- HSBC -- Analyst

Yes. Just the number there.

Murali Subramanian -- Chief Operating Officer

Yes, fixed-tilt mono PERC. So currently, our SECI 600 fixed-tilt mono PERC is yielding about 1.8 million units per megawatt. So let me just tell you what that number means.

Puneet Gulati -- HSBC -- Analyst

So about 18%?

Murali Subramanian -- Chief Operating Officer

20%, 20.5%, say 20%, on average, right? It's 20.5%, actually, at the moment. It's -- yeah. So with this, then you -- on top of this, you back in an overloading, you back in bifacial, you back in a tracker, and this will start to go up, the numbers that you just asked.

Puneet Gulati -- HSBC -- Analyst

OK. That's helpful. My second question is you said that you'll put -- pretty much install nothing in FY '23. But why is there still a capex guidance of $600 million to $700 million for that together?

Murali Subramanian -- Chief Operating Officer

We have -- maybe it's --

Ranjit Gupta -- Chief Executive Officer

In the case --

Murali Subramanian -- Chief Operating Officer

Sorry. Go ahead, Ranjit.

Ranjit Gupta -- Chief Executive Officer

So we have examined, of course, because we will be working on the first 1,000 megawatts of our SECI 4,000-megawatt tender. And we have this 470 megawatts that we have won, which will need to be delivered in the first or the second quarter of the next fiscal. So a lot of work will actually be done in this quarter, right? So in this fiscal. So we will be constructing almost 1,500 megawatts to be commissioned in FY '24.

So because of the fact that, that capacity is going to come up in that year, so a lot of the capex initially will be spent in FY '23.

Puneet Gulati -- HSBC -- Analyst

That's 1,500 megawatts in FY '24?

Ranjit Gupta -- Chief Executive Officer

Yeah. That's right. 470 megawatts that we spoke about, which has about -- half of it is wind and the 600 megawatts that we have already signed, 50 megawatts that we are signing in this week or next week, and another 350 megawatts, which we expect SECI to sign over the next quarter or so. So we will have 1,470, and we will, obviously, you see what we need to do or if we win anything specific on this -- on the storage side or on which transition side or whatever it is.

So we do expect to be busy. That's not commissioning something in this fiscal, but next year, we have a lot to commission.

Puneet Gulati -- HSBC -- Analyst

But would you typically pay for modules after you commission it? Or is an LC base paying for? Do you still need to spend $600 million in FY '23? Or it's just allocation of that money?

Murali Subramanian -- Chief Operating Officer

It's the allocation of that money. Once you open an LC, we say that it is allocated. So also, we will be acquiring land. And like we said, we are developing those 1,000 megawatts of wind.

So we are going to be busy. We are investing for the future. And we will keep the -- keep the wheels turning over the next year or two.

Puneet Gulati -- HSBC -- Analyst

Thanks. So from a debt perspective, we should not be adding $600 million in FY '23, we should see that in the '24 room, right?

Murali Subramanian -- Chief Operating Officer

A large part of it will be added in '24, of course, for the 1,500 megawatts because that also includes wind. So wind is slightly higher capex than solar. So we will be adding a large part of the debt only the year after. Yes, you're absolutely right.

Puneet Gulati -- HSBC -- Analyst

And Q4 of this year, all the projects are on price. There should not be any spillover to FY '23, right?

Ranjit Gupta -- Chief Executive Officer

So maybe, given a guidance, Puneet, to 2,855 to 2,955, so we are hopeful that Rajasthan 9, which is the one which is on a critical path, that we'll be able to commission that in this fiscal. If there is any spillover, it will be a small quantity or it could potentially be a small quantity of Rajasthan 9 into the first half of April or into April. But other than that, we are fairly confident that we will be able to meet this guidance.

Puneet Gulati -- HSBC -- Analyst

Understood. That's very, very helpful. Last question, if I may. Any updates on Karnataka? You talked about getting resolved, but the receivables were denied.

What's the process to find into the High Court matter?

Ranjit Gupta -- Chief Executive Officer

So there has been a very, very positive development on all three distribution companies in the case of Karnataka for us. Just to break it up, there are three distribution companies that are in question here. Two of them, which are GESCOM and SESCOM, where we have positive orders from APTEL. GESCOM has gone to Supreme Court, so we'll have the first hearing, and we are working on that process.

SESCOM, we have asked them to adhere to the APTEL order -- to heed APTEL order and pay us. Both these distribution companies on their regular payments are up to date. So there is no DSO attributable to GESCOM and SESCOM on a regular payment. The DSO attributable to them is because of the court case.

They are paying a slightly lower revenue, and we have, under court case, so they have to pay us a differential revenue, right? So that's the court case situation in case of GESCOM and SESCOM. They have good paymasters. They pay every month, just that they're paying us less, and that's where the court case is. On HESCOM then, they're delayed in payment, right? Because they haven't paid us.

And against HESCOM, we had gone to High Court. And High Court is strong in our favor. That's almost, if I remember correctly, $10 million, $12 million of payments. And we are cautiously optimistic that some or most of this money we'll be able to recover in this fiscal.

So the order is there. We have asked them to pay us. We are working with them to schedule payments. So we are hopeful.

Operator

[Operator instructions] As there are no further questions, on behalf of Azure Power, we conclude this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

Ranjit Gupta -- Chief Executive Officer

Thank you very much. Thank you, everyone.

Duration: 53 minutes

Call participants:

Vikas Bansal -- Head of Investor Relations

Ranjit Gupta -- Chief Executive Officer

Murali Subramanian -- Chief Operating Officer

Pawan Kumar Agrawal -- Chief Financial Officer

Justin Clare -- ROTH Capital Partners -- Analyst

Maheep Mandloi -- Credit Suisse -- Analyst

Puneet Gulati -- HSBC -- Analyst

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