管理層發言
Thank you for standing by. And welcome to the ReNew 3Q 2025 Earnings Report. All participants are in listen-only mode. There will be a presentation followed by a question-and-answer session. I would now like to hand the conference over to Mr. Anunay Shahi. Please go ahead.
Thank you. Good morning, everyone. And thank you for joining us. We put out a press release announcing our results for fiscal 2025 third quarter ended December 31, 2025 last night and a copy of the press release and the earnings presentation is available on the Investor Relations section on ReNew's website at www.renew.com. With me today are Sumant Sinha, our Founder, Chairman and CEO; Kailash Vaswani, our CFO; and Vaishali Nigam Sinha, Co-Founder and Chairperson of Sustainability. After the prepared remarks, which we expect will take about half an hour, we will open the call for questions. Please note our Safe Harbor statements are contained within our press release, presentation materials and materials 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 furnish in our Form 6-K and the presentation on our website for a more complete description. Also contained in our press release, presentation materials, and the annual report are certain non-IFRS measures that we reconcile to the most comparable IFRS measures and these reconciliations are also available on our website, in the press release, presentation materials and our annual report. It's now my pleasure to hand it over to Sumant.
Yes. Thank you, Anunay. Good morning, everybody, and/or good evening or good afternoon. Glad to have you all on our earnings call for the third quarter of fiscal 2025. Before we get into our business and the updates for the quarter and the nine months, let me give a short overview of the macro environment related to our industry in the past three months. In India, the GDP growth rate which had declined to 5.4% in Q2 fiscal 2025 is expected to again pick up from Q3. Inflation is also benign with RBI cutting rates by 25 basis points earlier this month after a fairly long period of time with further cuts anticipated during the year. We anticipate that Indian domestic banks should pass on these benefits to borrowers like us, thereby reducing borrowing costs for infrastructure companies and making projects more attractive. Power demand has also increased from December 2024 and the recent union budget also had a strong focus on boosting consumption, which is encouraging.
The renewable energy environment looks promising with more than 50 gigawatts of renewable energy capacity already auctioned during the year. Therefore, while the US equity markets for renewable energy companies remain challenging, the underlying fundamentals governing renewable energy in India continue to remain quite robust. Let me now turn to updates about ReNew. ReNew has now entered the 15th year of its operations and we proudly celebrated our anniversary recently. From our modest beginnings in 2011, we have expanded our footprint to almost 11 gigawatts of commissioned capacity. I extend my heartfelt appreciation to all of our shareholders, employees, customers, lenders, and advisors, whose unwavering support has been instrumental in our journey since day one. Now let me turn to highlights from our business on Page 6 of the presentation. Over the years, we have maintained our leadership in project execution and commissioning greenfield projects.
I am pleased to report that we have achieved one of the highest year-to-date megawatt commissionings with approximately 1.3 gigawatts and an additional 150 megawatt hours of batteries commissioned so far this fiscal year and a total of 2.6 gigawatts delivered since December 2023. With this, our operational portfolio now stands at 10.8 gigawatts with a 26% increase year-on-year. Our total committed portfolio now stands at 17.4 gigawatts, representing an impressive 27% growth year-on-year and an additional 1.1 gigawatts since the last earnings call. We have secured 3.9 gigawatts of renewable energy capacity and 600 megawatt hours of BESS through auctions so far this fiscal year, bringing our total pipeline to approximately 24 gigawatts plus 2 gigawatt hours of batteries, representing one of the largest renewable energy portfolios in India. A notable trend this year has been the strategic shift towards more complex projects with the majority of our auction wins this fiscal originating from such projects.
While we are not aggressively seeking additional capacity in the near term, we continue to adopt a disciplined approach targeting auctions that offer attractive return profiles. With the decline in battery prices, the market has seen an increasing number of battery plus solar solutions auctions. We are excited to announce that we won our first solar plus battery energy storage system tender this year. We remain confident in meeting our targeted megawatt installations by the end of the year. This includes about 600 megawatts, which is subject to timely regulatory approvals and build out of transmission infrastructure. Our manufacturing facility continues to expand towards its full potential and is now producing about 10 megawatts per day of modules. Additionally, we have been able to secure an aggregate order book of about 2 gigawatts to date, doubling it in a quarter. These modules and cells are expected to be delivered over the course of the next fiscal.
Our manufacturing facilities have produced by this time in aggregate about 3.6 gigawatts of modules and about 300 megawatts of cells to date. Continuing our path towards world-class ESG practices, ReNew was also recognized as India's highest-rated pure play renewable energy company by S&P. Let me now hand it to Kailash for finance and other highlights.
Thanks, Sumant. Turning to Page 7. We are committed to bringing in efficiency in our operations and reducing costs while we continue to deliver profitable growth. This quarter we saw a 500 basis points improvement in margins, primarily driven by our cost optimization initiatives and lower provisioning than the previous comparable quarter. Our DSOs, which is debtors to sales outstanding, saw a 22-day reduction from Q2 of this year, solidifying our balance sheet and improving our cash flows. Wind PLFs trended lower this year compared to last year due to which we have reduced the FY25 EBITDA guidance range to INR74 million to INR78 million, and the cash flow to equity guidance to INR11 billion to INR13 billion. When providing guidance for the current fiscal year, we assume weather similar to FY24 while actually we have experienced lower wind PLFs almost every quarter and the fourth quarter is also below the same quarter in the prior year so far.
Lastly, the new shareholders have received a non-binding offer by a consortium comprising of CPP Investments, Masdar, ADIA, and Sumant Sinha. This special committee comprising independent directors and advised by Rothschild and Linklaters have been in discussion with the consortium regarding the offer. While we understand that our stakeholders are eager to know what's going on, however, you will appreciate that currently we cannot comment on the timing or status of the process and we will report to the market as soon as there is a development at our end. We will not be able to comment further on the offer at this stage. Let me turn it back to Sumant.
Yes. Thanks, Kailash. Turning to Page 9. I'm happy to report that we have been able to increase our operating megawatts by about 26% year-on-year and our total operating portfolio now stands at 10.8 gigawatts. During the last 12 months, we have been able to commission over 2.6 gigawatts and have commissioned about 1.3 gigawatts so far in this fiscal year. In addition, our total contracted portfolio has also grown by about 27% to 17.4 gigawatts. During the year, we signed PPS for approximately 3.8 gigawatts of RE capacity and our committed capacity is now 17.4 gigawatts along with 800 megawatt hours of BESS. While the auction market provides ample opportunity to grow, we continue to be disciplined in our approach to bidding. We are selective and conservative in our bidding and so far this year have managed to secure 3.9 gigawatts of RE in the current fiscal year along with another 600 megawatt hours of BESS.
We do see that batteries will play a significant role in providing grid balancing in the future and provide flexibility to grow with more certainty on returns. We have won our first solar plus BESS bid in the current fiscal and will continue to focus on these bids as well. Our capital recycling program also continues as earlier as we signed an agreement to sell a 300 megawatt SECI solar asset with the transaction expected to close by March 2025 with valuations in line with our past capital recycling transactions. Turning to Page 10. Execution remains our core strength and time and again we have demonstrated our ability to build large-scale projects efficiently and within budgeted costs. On the solar construction front, we have already commissioned 1,120 megawatts this year with an additional 175 megawatts in the final stages of regulatory approvals. Moreover, 400 megawatts of solar projects are fully erected and will move towards COD approvals.
The peak power project has also been commissioned under the PPA and we have also commissioned almost 800 megawatts of our RTC project. In the wind segment, we have commissioned 140 megawatts year to date with another 500 megawatts of turbines already installed and ready for grid connection. While most of the work has been completed at our end, large pile connectivity and administrative hassles could have a minor impact on the commissioning timelines. Our manufacturing business is turning out to be a significant competitive advantage for us. On one hand, we get access to uninterrupted supply of high-efficiency modules. On the other hand, external sales enable generating cash for the company and help de-risk the business. The business generated an EBITDA of approximately INR560 million in Q3 of fiscal '25. Our manufacturing facilities have produced an aggregate of 3.6 gigawatts of modules to date and is approaching an average daily production rate of nearly 10 megawatts every day.
As we ramp up production, our sales team has played a crucial role in securing contracts for surplus capacity. To date, we have secured an external order book of two gigawatts, which includes 1.1 gigawatts of sales plus modules, a volume we aim to deliver over the next fiscal year. Lastly, our sales facility started commercial production in the current year, in the current quarter, and has already produced over 300 megawatts of cells. We have achieved an industry-leading efficiency of 23.2% for our cells underlining our commitment to quality and high standards. I will now hand it back to Kailash to go through the finance section.
Thanks, Sumant. Turning to Page 12, our operational portfolio has seen a 26% year-over-year increase in megawatts, underscoring the strength of our EPC execution capabilities. Our cost optimization efforts are showing results and EBITDA margins have expanded significantly from 75% to 80% in the current quarter and improved by 240 basis points for the nine-month period ended December. Adjusted EBITDA rose by 11% year-on-year, primarily impacted by weaker than expected wind performance. We also continue to see improvement in DSOs. Our DSOs now stand at 72 days, our lowest ever and a 22-day reduction over the previous quarter. If you look at the year-on-year EBITDA work, while newly commissioned projects contributed an additional INR2.8 billion in revenue but lower than expected wind resource led to a revenue reduction relative to guidance of INR1.6 billion for the quarter. Furthermore, asset sales during the period resulted in a competitive revenue reduction of approximately INR900 million, partially offset by the INR1.1 billion savings in the quarter that we achieved through our cost optimization initiatives, such as internalization of O&M that was earlier outsourced to wind OEMs, SG&A reduction, and a reduction in discretionary spends along with the lower one-off impact.
Let me now turn to Page 13. All of India has been impacted by poorer wind resource in fiscal 2025 compared to last year, details of which are there on Page 23. While we based our initial guidance on weather being similar to fiscal '24, however, wind PLFs have been below fiscal '24 levels and solar PLFs have also been slightly lower. While our cost optimization initiatives have helped mitigate this impact onward, we still have to make a revision to our FY 2025 EBITDA guidance due to the INR4.7 billion impact on account of weather. In Q3 FY25, portfolio level wind PLF stood at 13.5%, a decline from 17% over the previous year. During the first nine-month period, absolute wind PLFs have fallen by almost 240 basis points. Although wind performance has been lower than anticipated, our cost optimization initiatives have helped mitigate part of the impact due to savings of INR2 billion in the first nine months of the current fiscal year.
Turning to Page 14. In spite of the lower than expected EBITDA performances, we continue to be committed towards being disciplined in our leverage. Our operating project leverage ratio continues to be below 6x using trailing 12-month EBITDA rather than the run rate figures, which under normal weather conditions should improve slightly. Let me now hand it over to Vaishali for comments on ESG.
Thank you, Kailash. Turning to Page 16 and reviewing advancements in ReNew's ESG initiatives and targets now. 2024 has been a stark reminder of our climate reality. With global temperature surpassing the 1.5 degrees centigrade threshold, the importance of sustainability has never been more evident. At ReNew, we remain unwavering in our commitment to this call. Over the last quarter, we have made significant strides in the following areas. ESG ratings, ReNew's performance in the highly regarded S&P Global corporate sustainability assessment has been a major highlight for us in this quarter. We became the highest rated pure play renewable energy company in India by achieving our highest ever score of 73 out of 100. Additionally, we made history as the first company from India's electric utility sector to be included in the prestigious S&P Global CSA Yearbook. Green certifications, ReNew's Jaipur manufacturing plant achieved the highly acclaimed LEED Gold certification, further reinforcing our commitment to a green and sustainable set of operations.
Leadership Awards, in the past quarter, ReNew has received nationwide recognition from leading publications and organizations. We were named Company of the Year by FirstView for our business excellence, innovation and renewable energy leadership. Our solar, wind, and hybrid plants secured the CII Performance Excellence Awards while Financial Express honored us as the winners in the clean energy champion category at the Green Sarathi Awards. Now turning to Slide 17 to review the progress made across our ESG targets. ReNew remains committed to achieving its SBTi validated net zero target, the development of our decarbonization road map for manufacturing is underway. And we are advancing a first to reduce Scope 3 emissions through the ongoing assessment of a sustainable supply chain, which includes detailed supplier ESG assessments, target setting, and advanced monitoring. Social responsibility is integral to our business, driving community stewardship, volunteerism, and equitable development.
This commitment propels us towards our goal of impacting 2.5 million lives by 2030, with the programs already reaching over 1.4 million lives impacted. In quarter 3, we made considerable progress in this regard. We distributed 163,000 blankets to those who needed them the most. Solar electrification of 46 schools is underway and 55 digital labs have been established across the country. As part of our Soar Pan work program, we are upskilling women and a total of 595 women have been trained to date with 150 completing this training in quarter three. As part of our company-wide sustainability targets, we remain on track to achieve both our short and long-term rating goals. These ratings underscore the impact of our first integrated report and we look forward to building on this momentum and reporting our progress with the release of our second integrated report in 2025. I will now ask Kailash to cover guidance.
Thank you, Vaishali. Coming to our guidance, we are reaffirming our megawatt guidance for the year, which includes 600 megawatts, the commissioning of which is dependent on timely regulatory approval and timely build-out of the transmission infrastructure. While we have a good handle on execution, we are impacted by weather and its seasonality. We are lowering the range of our full year 2025 expectation on adjusted EBITDA and cash flow to equity guidance. On the other hand, we are happy to update the run rate guidance for our target portfolio of 17.4 gigawatts, which is up 1.1 gigawatts since the last quarter. With that, we'll be happy to take questions.
分析師問答
Your first question comes from Justin Clare with ROTH Capital Partners.
So first off, I wanted to start just on the wind PLF. Q3, the PLF was lower than it has been historically here. I was wondering, is this just the result of lower wind speeds in India broadly, was there any other issue or any factors in terms of the performance of your specific projects? And then wondering if you could just talk about how you see wind PLFs trend into Q4 and whether or not we're seeing a return to kind of historical averages?
Look, the PLF reduction was entirely on account of wind. Wind speeds in Q3 were significantly lower. And so you should assume that the entire delta in PLF is on account of wind speed differentials from the long-term averages, that is really what was the decline in revenue along with that. So far, wind speeds in Q4, it's always obviously early to comment on it, are getting closer back to normal. So I would say they're not entirely back to normal, but they are certainly not as quite as bad as they were in Q3. So that's where we are right now.
I wanted to ask about the rates, as you mentioned they could be lower than in India. What are your projections for where rates might settle for your project finance? Additionally, how much of your debt do you expect could benefit from these lower rates in the near term? If you could provide any potential impact in quantifiable terms, that would be helpful.
So Justin, as far as the rate reduction is concerned, we're yet to see the transmission of that from the lenders into their lending rates. But wherever we have rates which are linked to short-term benchmarks like three-month treasury bills, there, we have started seeing the benefit of that because the short-term rate has started reducing but that would be a small component of our portfolio. I think overall, the variable rate part of the portfolio, you will see some reduction happen, which is around 30%, 35% of our portfolio that would be borrowing from domestic institutions where some part of this benefit we will see. But when the transition happens, how much will happen, that will be known as more time goes by. Right now, we've not seen any bank significantly cut their marginal cost lending rates which is the MCLRs. And hence, we have not benefited on a large part of our portfolio. But on a small part, which could be still less than 10%, which was linked to any short-term rates, we started seeing that benefit. But that is in any case, that was more of a leading indicator. Those rates, in any case, gone down and hence, we got that benefit earlier before the rate cut also happened.
And Kailash, the long-term outlook?
So long-term outlook, again, with inflation coming in big and government focus being on encouraging more growth, also encouraging more consumption, I think there would be continued reduction in rates, which is likely to happen. The only caveat there is obviously the currency where, to some extent, given that the rupee had depreciated quite sharply against the dollar, that could be one which would be playing on the government's mind in terms of how much to reduce and how fast to reduce because, obviously, then that will result in flight of capital.
And then just one more, curious on the battery plus solar solutions here. I was wondering if you could talk about the anticipated product returns and how those compare to plain vanilla solar projects or more complicated around-the-clock projects? Just how attractive do you see the returns there?
A lot depends on the assumptions regarding battery pricing at the time of bidding. As we all know, battery prices have significantly decreased. Therefore, the batteries in our portfolio are looking appealing because our initial pricing assumptions were quite conservative. Due to the price reductions, we expect attractive returns from these investments. Plain vanilla solar likely offers lower returns compared to the other options, while solar with storage and FDR rebates are likely to provide the highest returns. The difference in internal rate of return among these options is approximately 2% to 3%, with solar plus battery energy storage systems being in between. However, by the time we execute the projects, it’s possible that battery prices will have fallen to a point where those projects perform very well as well.
Your next question comes from Maheep Mandloi with Mizuho.
First, regarding your solar manufacturing, you mentioned on the last call that you were operating at a 10 megawatt per week run rate. Can you remind us what the current run rate is for the cell and module, and how do you view the backlog in terms of expected revenue recognition on a quarterly basis moving forward?
So look, I think I'll talk about the production and I'll ask Kailash to answer on the revenue part. On the production part, we are sort of between 10 and 11 megawatts right now per day of modules, that's the rate that we are producing at right now. So if you want to annualize that assuming 350 workdays then you get a sense of where the megawatts is from an overall standpoint. The eventual goal is to get that to over 12, 13 megawatts a day. So we are sort of moving in that direction quite well, given that some part of our module capacity was commissioned fairly recently. On the cell side, we are producing between 3.5 to 4 megawatts every day right now and that is something that again, it's getting close to what the expected production rate was or needs to be on a steady-state basis. And the more important thing almost there is that the efficiency levels on sales is actually among the highest in the country right now. So our team has been able to really stabilize the plant at a fairly high operating efficiency level. So that's positive. On the revenue side, Kailash, would you like to take that?
So again, Maheep, just to clarify. Most of the revenues from captive sales happen to the renewable energy arm of ReNew, that is all capitalized into the balance sheet because, obviously, it's within the group's own consolidation and it gets knocked off. So for third parties, what we have reported in our numbers for the first time this time. So for the first nine-month period, which was largely, most of the sales happened in the quarter, we had INR3.4 billion of revenues and around INR600 million of EBITDA for the current period. And going forward, obviously, as and when third-party sales happens, similar amounts would then be reported for the third-party portion only.
I wanted to follow up on the module side. We've noticed many companies in China and possibly some in the US claiming ownership of TOPCon patents along with various lawsuits, though not in India or other regions. Is this a concern for you, and are you seeing any implications for the Indian market?
I was mentioning that most companies exporting to the US were involved in these actions, but since we have no exposure to the US market in terms of exports, we did not observe any impact and do not expect to experience any.
And just one last one. On the 300 megawatt sales runs, and I'm not sure if you talked about it. But could you just talk about the multiples you are expecting on those or if they're in line or better than what we saw in the past sales you have?
So it's commented obviously in the presentation that I gave. But basically, it's in line with our past recycling initiatives.
Your next question is from Nikhil Nigania with Bernstein.
My first question is on the broader renewable space. While the government is pushing on their plans, maybe some headwinds, land availability for wind, transmission access, which seems to be alluded to in the presentation as well and in PPA signing. So if you could share some color on these aspects. Is ReNew facing similar challenges on how does this company see it on these aspects?
I believe the mention of transmission issues is quite minor. We have a project where a bid is taking a month longer to connect than initially expected. This raises some uncertainty about whether it will be completed before the March 31st commissioning deadline, though we will be ready on our end. If it isn't done by that date, it will be completed about 10 days later, which isn’t a significant concern for our overall revenue generation. The more pressing issues are related to land availability, general connectivity, and PPA signing, which I will address now. Regarding transmission, we currently have all the connectivity for our 24 gigawatts of pipeline in place, and we aren't facing any connectivity issues. In fact, we have surplus connectivity, which you noted in a previous report. This positions us well to leverage that availability for future auctions. Additionally, based on the commissioning dates for connectivity, we can effectively manage the execution of this capacity over the next few years.
While there may be a few months of delay in certain cases, generally the delays remain minimal. With proper planning of project execution to align with substations, we can largely ensure timely delivery. Connectivity challenges are primarily associated with companies that didn't secure it in advance, whereas we have proactively addressed this issue. Land availability, on the other hand, poses a significant challenge for wind projects, which has historically been the case. As a result, much of our recent commissioning growth has occurred in the solar sector rather than wind. We do not anticipate the wind industry exceeding 5 gigawatts per year in the next few years, with our share determined by our commissioning plans. Land issues have been exacerbated over the past six to nine months, particularly in Maharashtra, where local challenges and Ministry of Defense concerns related to upcoming elections have affected our commissioning timelines.
Typically, wind projects require more time to commission than solar projects. In terms of PPA signings, there has been decent progress this year despite a backlog from bids over the last two years. From around 120 to 130 gigawatts of bids made recently, only 30 to 35 gigawatts of PPAs remain unsigned, indicating a solid headroom in signed PPAs that suggests potential capacity additions in the near future. I believe the remaining PPAs will also eventually get signed. Currently, the government is contemplating slowing the pace of new bids to allow for the finalization of outstanding contracts, which seems reasonable given the rapid bidding pace. This could provide us with some room to reassess execution pipelines. Overall, I am optimistic that most of the PPAs will be signed.
My second question is about the solar cell business. The manufacturing plant was commissioned at an opportune time. However, when we look at some competitors, we notice they mention domestic sales prices are around 14 to 15 cents, which leads us to expect a greater impact from this. Do you anticipate that in the upcoming quarters, the manufacturing business could contribute significantly to profitability?
For sure, I think sale prices in the market right now are fairly attractive. And we are not selling any cells to ourselves, we are selling modules to ourselves right now and we are selling cells into the market upside to the external market, simply because most of our projects don't require domestic cells at this point. So all of our cells will be going into the external market. And so to that extent, we will actually gain from the pricing that is in the market right now and that will, of course, start getting reflected in our P&L as we go forward.
And one last question...
We are pricing at a level that reflects the current market conditions. Therefore, you can assume that we are aligned with the market trends.
Your next question is from Puneet Gulati with HSBC.
My first question is regarding the current situation. Are you incorporating that into your 17.4 gigawatt guidance estimate?
So Puneet, basically the expectation is that, that's obviously a long-term guidance. So we don't make long-term changes into that. It is largely what we've tried to do is that assume a long-term forecast, which have been corrected based on for the last two years but not reflected of every year-on-year performance, for example. And that way, we have tried to estimate the long-term guidance. Our expectation continues to remain that wind does move in cycles and this has been an extended cycle, which hopefully will reverse and we should see the dividends on that also.
And secondly, you also have a lot of unsigned LOEs and why due to the fact that get signed, there is also a guidance note floating around with say that unsigned LOEs beyond 12 months can be allowed to lapse. Can you comment on what is your view on that?
I believe there are many discussions ongoing within the government. There is also a perspective that suggests canceling any Power Purchase Agreements could significantly damage the government's reputation. Additionally, it raises the question of what will become of the associated connectivity and how it will be allocated. This makes the situation quite complex. It’s also important to note that the Letters of Authorization or bids we are discussing were established before the recent changes in energy regulations. Therefore, any future bids will need to account for domestic sales, resulting in higher costs. As a result, it's likely that Discoms relying on those earlier bids will find them more appealing and may choose to move forward with those rather than risk cancellation.
And thirdly, could you also comment on the process of the technical difficulty? I understand you may not provide extensive details, but what are the next stages we should anticipate regarding the buyback?
So Puneet, it's not exactly a buyback. It's an offer by a group of shareholders to buy out the investors, the public investors and with the intention of taking the company private. So again, as we said in our earlier remarks that we have got this offer, which is being evaluated by the special committee, advised by independent directors. And once there is any movement then we will be announcing it.
So will the independent board get involved here or is there some…
So the special committee formed, which comprises of only independent directors.
And lastly, if you can talk a bit about capacity addition plans for FY26 and specifically for projects which you can commission before June of 2025?
Before June of 2025, there is a lag of 600 megawatts, which, if it delays, would be commissioned in April of FY26, specifically in April 2025. Additionally, we will provide our long-term guidance during our results announcement in June, following our March results, which will be released in early June.
I think we have one question from Aniket Mittal of SBI Mutual Fund. Aniket, you want to go ahead.
The next question will come from Aniket Mittal of SBI Mutual Fund.
So while levels have come down and the drop in our average...
I couldn't catch that question at all, Anunay, if I don't know whether you guys did, but if you can repeat it, that would be great.
...levels have been higher compared to some of the other peers. So it's relative, is it a function of the region where we are present where we've seen a bigger decline?
Yes, they're probably closer to P90, although we haven't done the exact math. I don't know what the guidance is or what the estimate is that you got from the other companies, so I really can't make a comparative statement. I would just tell you that the wind in the month of October and November was drastically lower than it has been in prior years. And that could be perhaps because the monsoon got extended and we had fairly warm sort of periods of time at that time. And that's why the usual reversal of wind that takes place from the Southwest to the Northeast that took a lot longer to happen than expected than it normally does. December was closer to average, still not fully at average and January has been kind of similar to December and February, of course, is happening right now. So hard to comment. The only other thing I would say is that at least in North India, there's been a very warm winter. And we need temperature differentials between land and sea to increase for the Northwest winds to flow. And that is something that we have not seen as much this winter. And so that, I think, also has caused this lack of wind this period of time.
The other question was just as I look at your pipeline, right, increasingly it's becoming more FDR and hybrid heavy. And in the presentation, you've sort of talked about the fact that the capacity that you're trying to put up is subject to change, which probably implies that you're looking at battery versus storage over here. Could you just give us some broad follow-up in terms of how do we look at the capacity additions for the incremental hybrid project, what sort of contributions are you thinking about in terms of wind, solar, hybrid? So for example, having a relook at wind over there. So just some color over there would be fairly helpful.
The configuration depends on the bid requirements and the ability to buy a certain amount from the market, along with the pricing of wind, solar, and storage. All of these factors influence the configuration. When we placed some of these bids, the pricing was at a certain level, and we developed a configuration based on that pricing and the bid specifications. Over time, some of these price levels have changed. For instance, solar prices have dropped significantly over the last couple of years, so bids submitted two years ago would now require a different configuration due to the reduced price of solar. Similarly, battery costs have also fallen dramatically in the past year. As a result, our previous requirement for more wind may now be optimized to achieve higher returns with a greater proportion of solar and storage and less wind. This situation is dynamic with each bid, and when we sign the power purchase agreements, we finalize the configuration. At that time, we adjust our models to determine the optimal configurations based on the current costs. Because of the decreasing costs of solar and storage, we are shifting towards those technologies in our bids and reducing the emphasis on wind.
The other question was on the impact, I think Kailash mentioned in the remarks that one of the reasons for declining wind has been the internalization that we've been doing. If you could provide some color on that, how much of the O&M is now being done internally, what's the scope over there going forward and how do we look at the O&M expense?
To answer your question, we handle all the operations and maintenance for solar projects internally. For wind projects, particularly those involving legacy assets, we have long-term operations and maintenance contracts with the original equipment manufacturers. Many of these contracts are difficult to exit, so when we can't get out of them, we focus on reducing and renegotiating the pricing to achieve some savings. For projects where the free operations and maintenance period has ended and there are no long-term agreements in place, we have started managing the operations and maintenance internally. While I can provide exact numbers later, this is the general approach we are taking. This year, we have observed a significant benefit due to both the reduction in operations and maintenance costs and the reserves we had built for equalization in the past. Since we have seen a decline in operations and maintenance costs, we were able to write back some of those reserves, which are no longer necessary. This contributed positively to our results in the current nine-month period.
Just one last question. In terms of the external module sales unit this quarter, what's the quantity or other volume?
What was the question?
So Aniket, it was a little north of 200 megawatts of external sales that we booked for in Q2.
There are no further questions at this time. That does conclude our conference for today. Thank you for participating. You may now disconnect.