Azure Power returns to profitability despite limited project commissioning

The IPP’s operational solar portfolio was 2,052MW at the end of June. Image: Azure Power.

Azure Power is on track to increase its operating solar capacity by at least a third this fiscal year following a first quarter that saw the independent power producer (IPP) return to profitability.

As of 30 June, the end of its Q1, the India-based company’s operational PV portfolio stood at 2,052MW, up 23% on the same period last year. This is expected to rise to 2,750 – 2,955MW by the end of March 2022.

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After posting a net loss in the previous three quarters, Azure recorded Q1 net profit of INR 697 million (US$9.6 million) and increased its revenue 13% year-on-year to INR 4,440 million (US$59.7 million) thanks to revenue generated from solar projects commissioned since Q2 2020/21.

During the first quarter, Azure sold its 153MW rooftop solar portfolio to Radiance Renewables, a subsidiary of Indian climate fund the Green Growth Energy Fund, as part of efforts to invest in projects providing higher returns.

Impacts from the coronavirus pandemic meant Azure commissioned just 62MWac / 64MWdc in Q1, an increase on the same quarter last year when it commissioned 1MWac / 3MWdc. “We did not commission any significant capacities during both periods primarily due to COVID-19 disruptions,” the company said.

There was no change in the IPP’s operating, contracted and awarded solar capacity, which stood at 6,955MW at the end of Q1. That figure includes 4GW for which the company has received letters of award but power purchase agreements have yet to be signed.

At the end of the quarter, Azure said its project cost per MWac of operating solar stood at INR 39.3 million and would have been around INR 2.1 million lower without the impact of India’s safeguarding duty, which was levied on imports of solar equipment and expired last month.

For its Q2, Azure expects to post revenues of INR 3,600 million – 3,800 million, an increase on the INR 3,504 million it recorded in the same quarter last year.

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