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The company held its analyst meet on 8 Aug 18 2018 and was addressed by Mr. Deepak Amitabh MD
Key Highlights
The company has adopted Ind AS 115 and revenues were reported net of power purchase cost. So while revenues and OPM will be different, there is no impact at the OP levels.
Total volumes traded in June 18 quarter stood at 16.8 Billion Units (BU), up by 18% YoY. Change in the business mix in June 18 quarter towards short term volumes. The shift is temporary and will go back to long term in coming quarters.
Short term volumes which accounted for 59% of total volumes in June 18 quarter, stood at 9.9 BU up by 56% YoY. Medium term volume stood at 0.5 BU and was up by 4% YoY. Long term volumes stood at 6.3 BU up by 39% in June 18 quarter and account for around 38% of total trade.
OPM was lower due to high short term trade volumes. Which should see improvements going forward as long term volume share improves.
Long term trade gives around 6 paisa of margins, short term around 2 paisa and medium term margins hover around 2.5 paisa. So overall at mix level, expects margins of around 4 paisa.
The company has started consultancy services which apart from traditional consultancy includes services related to SEZ maintenance, related to Open access to T&D, energy efficiency etc. Net order book stands at Rs 50 crore in this segment.
Debtors Rs 4400 crore and creditors Rs 2700 crore as on June 18. High debtors were largely from J&K and Bihar SEBs. However around Rs 800 crore was received in July 18.
Net borrowing as on June 18 stands at around Rs 45 crore.
400 MW of long term power was operationalised in June 18 quarter. The effect of these contracts shall be visible in the coming quarters. The capacity is expected to contribute around 1.5 BUs to the total trading volume.
1050 MW of wind long term PPA should get commercialized in FY 19 and full impact will be from FY 20. Around 3 B units of additional long term volume should come from them.
250 MW of Medium term contract from Bangladesh which was extended to 31st July got further extended by 3 more months. 500 MW of medium-term contract between Bangladesh and India is yet not approved but should get approved by year end.
In view of the uncertainty on the commercialization of Athena Energy project wherein the company has invested around Rs 150 crore and so far written off around Rs 131 crore till Mar 18, the company took another prudent hit of Rs 9.29 crore in June 18 quarter. Thus total reduction in the value of investment now till date stands at Rs 140.7 crore.
There were around 2500 MW of bidding of stressed power projects that was organised in June 18 quarter of which 1900 MW has received bids. The company is in talks for signing up of PPAs for these contracts.
The board has taken a strategic decision that it will not contribute any further equity to PFS and PTC Energy. Also no more strategic investments in near term.
The ratio of long term will remain around 45-50% going forward.
Expects to grow volume in strong double digits in FY 19.
Other income for June 18 quarter comprises of treasury income Rs 60 lakh, Rs 2.3 crore forex gain and financial lease income of Rs 28.7 crore. For June 17 quarter, other income includes treasury gain of Rs 8 crore, forex gain Rs 17 lakh and finance lease income of Rs 31.94 crore
The company has gone for more borrowing in June 18 quarter which was a temporary thing.
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