Accumulate PTC India; target of Rs 51: PLilladher

“PTC India (PTC) reported sales of Rs13.3bn which was 24.3% lower YoY. This was mainly on account of a 3.3% dip in realisations (adjusted to rebate) YoY at Rs2.9 per unit. Adjusted trading margins stood at 3.8 paisa/unit only which was lower by 16.5% YoY. Lower trading margins were also on account of ‘banking’ of 800MUs which is on 2 paisa/unit. As the funds are locked up in the SEBs, the company had to take loans to bridge the funding gap and thus, there is an interest cost of Rs103m in Q3FY12. Rebate/surcharge component in sales for the quarter stood at Rs109m and thus, adjusted PAT comes to Rs19m (95% YoY de-growth). The company has not booked interest accrued on FMPs in Q3FY12 which has also affected the PAT.”

“Trading volumes showed a de-growth of 21.5% YoY to 4.5bn units; however, was lower than our expectation of 6bn units. Trading volumes have seen a slower growth on account of stoppage of supply of power to Tamil Nadu Electricity Board and Uttar Pradesh Electricity Board. PTC has outstanding dues, totalling to Rs15bn from Uttar Pradesh and Tamil Nadu. Surcharge receivable also stands at Rs900m from these two states. As on Q3FY12, the total PPAs signed by the company are 15370 MW (includes cross border trade). The cumulative MoUs stands at 11158 MW. The cumulative PSAs signed stand at 5400MW. The company is expecting dues from UP post elections, and continues to supply to some parcels of that state.”

“We have, downgraded our numbers taking the present situation into consideration. PTC still trades at P/BVx 0.6x FY13E, but policy paralysis will continue to affect the earning potential. We maintain ‘Accumulate’ on the stock,” says Prabhudas Lilladher research report.  

Public holding more than 90% in Indian cos

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