Key takeaways of the call

Volume traded increased by 15% yoy to 19365 million units [Short-term down 3% to 9584 MUs; medium trade up 322% to 2230 MUs and Long term up 19% to 7547 MUs].

The growth in volume has been driven by operationalisation of 950 MW of the thermal assets under medium term from April 2019. Additional 120 MW of long term wind power was operationalised during Q1FY20.

Given the company has operationalised 150 MW during last part of Q4FY19, that together with 950 MW in Q1FY20, the company has operationalized about 1100 MW of stressed thermal assets.

Similarly out of 1000 MW Wind long term PPA under SECI I tender, the company has so far operationalized 800 MW including the 120 MW in Q1FY20.

Consultancy order book currently stand at Rs 140 crore with order intake in Q1FY20 being Rs 20 crore.

Having operationalised 1100 MW out of 1900 MW of stressed thermal capacity there is another 800 MW which is various stages of completion. Similarly there is another 250 MW of wind capacity in various stage of completion pending for operationalisation. The company is nodal agency for Bhutan and the company is expected to bag one project (of 700 MW) which is expected to get commissioned in Q2FY20. So the volume will continue to increase going forward.

Margin for bilateral trade was 2.4 paisa/unit; exchange trade it was 1.3 paisa/unit; medium trade it was 4.2 paisa/unit; cross border trade it was 4 paisa/unit and for long term trade it was 6.2 paisa/unit. Overall it was 3.8 paisa/unit and it was marginally higher compared to 3.6 paisa/unit in previous quarter.

Q1FY19 had a forex income impact of Rs 7 crore on account of Bangladesh transaction. But in Q1FY20 that contract was a straight jacket one with a trading margin of 5 paisa. So no forex impact in Q1FY20.

Under electricity Act the tariff determination has to be as per Section 62 and section 63 there is no other way to do that. If the AP tariff determination was in tune with the Act then Courts will uphold it.

Monsoon months are the period with least demand for electricity. Next bulk/big requirement will come from September onwards. The period from September onwards only is the one the exchange price will peak. Expect some good response during that peak time.

Debtors as end of Q1FY20 stood at Rs 6577 crore and Creditors was RS 4350 crore. The net working capital day was down by 2 days to 27 days in comparison to Q4FY20.

Net borrowing as end of Q1FY20 was Rs 461 crore from Banks. Working capital at the start was Rs 218 crore. About Rs 364 crore has gone for funding debtors. The company has invested in equity for setting up Exchange with BSE & ICICI. Cash on hand as end of Q1FY20 was Rs 277 crore.

LC mechanism will have a positive rub on the power sector.

PFS made a provision of Rs 62 crore in Q1FY20 and that come in to the consol financials of PTC.

Operational income (total of revenue from electricity sales, gross surcharge income and rest of other operating income less cost of electricity purchase and surcharge expense) of PTC increased by 13% to Rs 125.83 crore from Rs 111.61 crore in the corresponding previous period. The EBITDA was up by 8% to Rs 105.44 crore from Rs 97.46 crore in the corresponding previous period. The PBT was up by 2% to Rs 96.22 crore and the PAT was up by 2% to Rs 62.77 crore. Thus if the impact of forex income of Rs 7 crore is excluded in Q1FY19 figures then increase in operating profit would be higher than 8%.

Total income of PTC Energy has increased to Rs 88 crore from 80 crore in previous quarter. Generation was up by 11%. EBIDTA for the quarter was Rs 83.97 crore. The total profit was up at Rs 15.15 crore from Rs 9.9 crore.