Key Highlights

Total volumes traded in Mar 18 quarter stood at 11.8 Billion Units (BU), up by 16% YoY. Total volumes for 12 months ended Mar 18 stood at 57.02 BU up by 18% YoY.

Short term volumes which accounted for 58% of total volumes in Mar 18 quarter, stood at 5.8 BU up by 16% YoY. Uncertainties hover around short term volumes. Expects volatility in short term to remain unless overall trading confidence improves. Medium term volume stood at 0.6 BU and was down by 24% YoY. The contract with Bangladesh got completed in FY 17. Thus, lower volumes from this contract affected the overall volumes in this segment. Also volumes were lower from Bhutan due to surplus power in that market. Long term volumes stood at 36% in Mar 18 quarter and grew by around 24%.

For FY 18, short term volumes which accounted for 54% of total volumes and were up by 19% YoY. Medium term volume which stood at 5% was down by 19% YoY. Long term volumes stood at 40% and grew by around 21%.

Margins per unit (without rebate and surcharge) for FY 18 stood at 0.043 as compared to 0.049 for FY 17. However, management is confident of this margin being bottom and expects margins to improve from here.

During Mar 18 quarter, around 375 MW of long term capacity got operational. On 12 May 18, another 200 MW of long term capacity (Teesta Urja) got operational.

The company had signed around 1050 MW of renewable power in FY 18.

Government is in constant effort to pull and create the demand side market which is struggling. While supply side market continues to remain, demand side activity has started and power trading should improve from here on as per the management.

There was no surcharge income from Tamil Nadu in FY 18 as compared to surcharge income of Rs 35 crore in FY 17.

Out of Rs 3270 crore receivable of PTC India, around Rs 429 crore is pertaining to more than a year. Though, it has to be seen in conjunction with payment holding to suppliers (this is due to some tariff dispute).

PTC Energy (PEL) - This company has seen decent turnaround from last year. This company has 350MW of renewable portfolio and made a EBITDA of Rs 280 crore last year. For FY 19, expects Rs350 crore EBITDA and PBT of Rs 80-90 crore (vs Rs 26 crore in FY18 and loss of Rs 3 crore in FY17). All wind asset projects are related to Feed in Tariff (FIT) regime, where after initial resistance last year, most states have agreed to offtake power at signed PPA, hence company expect decent performance in FY19.

The company will think of capital infusion in PTC India Financial Services (PTCFS) and decision will be taken in Q1 FY 19.

PTCFS has provided around 80% of all its stressed assets and another 10-15% if at all may be required. Otherwise, all the provisions are behind and now write back only will happen post Q1 FY 19.

After FY 12, there are no issues in the books of PTCFS. The backlog of thermal power projects is what is hurting the company. PTCFS has taken provisions aggressively than other banks.

Expects situation to improve substantially from H2 FY 19 onwards.

Overall, volumes in PTC will see a consistent and gradual recovery as more and more long term gets commissioned. Uncertainty on short term is getting reducing which will help short term volumes to grow going forward.