Key highlights

Currently, Renewable account for about 36% of total loan book, but with the clear focus on renewable be it wind, solar or hydro power, the renewable energy will soon take the maximum loan book of the company.

As per the management, by 2020, the current government is planning to increase the solar power from about 3000 MW to about 1 lakh MW by 2020. Similarly for Wind, it has plans to increase the wind capacity from about 30000 MW to about 50000 MW by 2020. All these would require an investment of about Rs 6.5 lakh crore and with debt equity of 70:30; it would mean a lending opportunity of about Rs 4 lakh crore for PFS.

Of the total loan book of about Rs 5500 crore, restructured assets constitute about 2% of the book. This is majorly the Konaseema gas based power project which is stuck up due to unavailability of gas. Management is optimistic about things to improve in next couple of months.

The company did an investment provision of about Rs 31 crore of an equity invested project called RS Wind Energy Power plant. The total investment stands at Rs 60 crore and half of it is already commercially operational. Management has made it clear that the provision is a voluntary provision given the delay in off take of the project and there is no statutory requirement of the same.

The company did raise some CP borrowings during H1 and was able to reduce the cost of borrowing by about 100 bps. No long term debts being taken.

Management expects to maintain Yields at current level of around 13.75%.

Total sanction in H1 FY 2014 stood at Rs 1209 crore. Delays due to elections were the major concern of lower sanction. The company sanctioned about Rs 1400 crore of loans in Oct and till date. Thus overall, management expects to reach sanction of about Rs 4600 crore by March 2014.

The company has no plans to raise funds.

Other income component would gradually increase as the share of processing fees, management fees and structured fees etc would increase as the loan book pie increases.

Overall, management continues to be optimistic going forward with a clear thrust on renewable energy.