Nov 09, 2012, 05.18 PM | Source: CNBC-TV18
PTC India expects outstanding dues of Rs 372 crore from the Tamil Nadu State Electricity Board to get liquidated by FY13-end, chairman and managing director Deepak Amitabh said.
The power trading solutions provider today reported a 25% jump in profit after tax at Rs 44.57 crore for three months ended September. The company had a profit after tax of Rs 35.57 crore in the year-ago period. Total income from operations climbed to Rs Rs 2,792.96 crore in the latest September quarter from Rs 2,389.05 crore in the same period a year ago, the firm said in a statement.
In three months ended September 2012, PTC India said the volume of energy sold was the highest ever for any quarter. Also, the Uttar Pradesh regulatory commission hike power tariffs by 17%. PTC expects cash flow from UP government to start by the year-end.
As many as 9,428 million units of electricity were sold in the second quarter of current financial year as against 8,655 million units sold in the year-ago period.
The total PPAs (Power Purchase Agreements) signed by the company as on September 30, 2012 are 14,402 MW (includes cross border trade).
"The company also beneficiated from lower cost of generation this quarter," the CMD told CNBC-TV18 in an interview.
Below is an edited transcript of Deepak Amitabh's interview on CNBC-TV18.
Q: I heard you detail the Tamil Nadu SEB’s as well as the UP SEB’s situation at this point in time. Can you give us a sense in terms of the receivables from UP at this point? What was the trend for this quarter and what is the guidance for FY13 for the remaining part of the fiscal?
A: For the Tamil Nadu as you have rightly said that we at one point of time were more than Rs 800 crore outstanding at a peak time and now it has considerably reduced to Rs 370 crore. This is because Tamil Nadu came much earlier with the increase in tariff and their conditions have been improving steadily. We believe that by March 31, 2013 Tamil Nadu should be liquidated completely.
Now regarding UP, today our balance sheet is exposed by Rs 470 crore and only Rs 10 crore has been paid by them but just a couple of days back, the UP regulatory commission has increased the tariff by average 17-18 percent, which is a modest increase but nevertheless a good beginning. Now because the working cycle of the tariff is becoming effective from November 1, so first time billing will be done to the customer after November 30 and the cash flow to UP will start by end of December.
So we believe that from January onwards, they should begin making payments both for the current purchases which they will be doing and taking care of all the areas. They will have to fix up some installment which cannot be discussed just now because that tariff order has just come. Our senior officers are visiting UP after Diwali and will then be able to give a good guidance on UP’s liquidation. But Tamil Nadu we believe should get liquidated during this year.
Q: Last time you gave a guidance of generating 800 million units in the second half of the fiscal from your Simhapuri plant. Can you tell us how much have you sold this quarter and will you stand by that guidance?
A: In the Simhapuri, there are two units. One got commissioned in May 2012 with 150 megawatt (MW) and second got commissioned in July. So both these units have been operating since July 2012 and PTC is tolling 200 MW out of this 300 MW.
We have done 300 million units during this quarter and we believe that the plant has been operating at a good ratio. The profitability has also been quite robust from the tolling business.
The other tolling business is another Meenakshi, where too by the end of this year two plants should get fully commissioned. But, we will get the benefit from 150 MW of tolling from Meenakshi from the next financial year.
Q: Coming back to the working capital and receivable situation at this point, how much relief have you seen on that front because we do understand your working capital cycle has come down for this quarter? Could you detail what was like in this quarter? What sort of relief do you expect for the second half of the fiscal?
A: Normally of we are able to maintain 3-5 days working capital gap between the receivables and payables it is considered to be very healthy. Last year by the end of this quarter our working capital cycle, if we reduce the UP and Tamil Nadu had increased upto more than 7 days which has considerably decreased to less than 3 days during the end of this quarter.
So, if we are able to recover full amount of Tamil Nadu during this year and next year UP should also get completely wiped out. We will be very happy and our cash position which was always between Rs 700-1000 crore at any given point of time will be restored back.
You have seen a reduction in the treasury income this year primarily because of this lock-in of the money. But just to give an assurance from the Indian power sector, in Indian power sector once you receive all the money back then the surcharge is recovered. So, surcharge only when the complete principle gets repaid. Then we will start getting collection of the surcharge amount after the principle is recovered.
Q: Can you give us an average realization that PTC India will do from all your tolling projects for the rest of this fiscal? Any ballpark figure that we can work with?
A: The cost of generation is a varying factor because that depends on the imported coal prices which have seen a decline. Stability in last two to three months and the foreign exchange also has been comparatively stable. So, if these things are stable then we should be able to maintain the margin which we have been maintaining, because we have sold the electricity on the sales side. It has been locked-in at a price to Andhra Pradesh government.
Sandeep Wagle of powermywealth.com is of the view
Gaurang Shah of Geojit BNP Paribas is of the view
Ashwani Gujral of ashwanigujral.com is of the view
Aditya Agarwal of Way2Wealth Securities is of the
Sandeep Wagle of powermywealth.com suggests buying
ICICI Direct recommended hold rating on PTC India