See 15% rise in operating income; discoms not a worry: SJVN

New projects will help in improving capacity and increase income for SJVN, the company’s Chairman & Managing Director (CMD) RN Misra said. In an interview with CNBC-TV18, Misra said the company plans to increase capacity by 300 megawatt (MW) by FY17 and aims to become a 10,000 MW company by FY22. SJVN is working on two projects – a 500 MW and a 600 MW – in Bhutan. Besides this, the company has a project in Nepal, one in India and shutdown project in Uttarakhand area, which will be revived soon, Misra said.  The company plans to foray into solar projects by FY17.Misra expects 10-15 percent improvement in operating income in the current year. In FY17, operating income will further grow by 10 percent, he said. The company is not planning to raise funds in the future for its variosu projects, he said. The company has exposure close to Rs 1,132 crore to discoms in Himachal Pradesh, New Delhi, Uttar Pradesh and Jammu.Below is the verbatim transcript of RN Misra’s interview with Latha Venkatesh & Sonia Shenoy.Latha: The stock markets are extremely cheerful about your stock. Is there any expansion that has come on stream or any further expansion that you have announced?A: As far as we are concerned number one – our financial position has been quite good. During last year we have the record profit and consistently our operational projects are performing in an excellent manner. The generation has been quite good and the plant availability factor has also been quite right. As far as the expansion plan is concerned we have diversified into the thermal, solar, wind and we are already in the hydro sector. In the hydro sector we are in joint venture with Druk Green Power Corporation. We have already started the work on Kholongchu hydro electric projects 600 megawatts (MW) in Bhutan. Another project of 570 MW in Bhutan in joint venture with Druk Green Power will also take up in few months. In Nepal also we are going for 900 MW around three projects.In India, we are having two projects in Uttarakhand. One is Devsari Hydro Electric Project 252 MW and another is Naitwar Mohri project 60 MW. On these two projects there was some sort of restriction which was imposed because of the orders of the honorable Supreme Court in 2013 because of the floods which had occurred in Uttarakhand. Now the honorable Supreme Court has clarified, that ban is not applicable to our project. Therefore, these projects are also likely to get green signal very soon.Sonia: Can you tell us what will the total capacity of the company be by FY17 and FY18. How much fresh capacity will you be setting up?A: At present our capacity is 1,959.6 MW. By FY17, we expect that our capacity will increase by another 300 MW or so. By FY18, it will increase by another 300-400 MW because we will be adding solar power. Our plan is by 2022, this company becomes a 10,000 MW company. Latha: So in that case how should be look at your income trajectory? Should we expect that you will grow by 15 percent annual growth in terms of revenues?A: As far as our income trajectory is concerned, last year our revenue was Rs 3,261 crore. This year may be little less than that because last year we got about Rs 571 crore as arrears. However, this year the income will be more than what was the operating income of last year because the Rampur project has come on a stream. Latha: Suppose we keep your operating income last year at about Rs 2,700 or 2,650 how much higher will it be?A: As compared to last year, it will be around 10-15 percent higher. Thereafter, next to next year we should expect that income should increase by 10 percent or so.Sonia: You will be adding some solar projects as well as you just mentioned. For addition of all these projects will you need to raise any funds in the next couple of years?A: In next couple of years, we don’t intend to raise any funds for the purpose of our equity. We are having sufficient internal resources. _PAGEBREAK_Latha: You spoke about arrears of Rs 571 crore which was your advantage last year. What are your outstanding from discoms at this point in time? A: At this point of time, our outstanding are Rs 1,132 crore. Latha: Which are the discoms that owe you this money? Are they among the discoms who are speaking to central government to push their loans to their respective state governments?A: Our money which has been owed maximum is by Himachal Pradesh, Jammu Kashmir, Uttar Pradesh and Delhi. We are anxious about these things, but we are not worried. Normally, we find that if outstanding are there but we are getting realisation also. Latha: Of this Himachal Pradesh (HP) and Uttar Pradesh are the Discoms who are talking to the central government for a revamp of their finances; right, to ask their state governments to take over their debt?

A: This is happening with most of the Discoms. However, Himachal Pradesh, we have been in dialogue with them.

Sonia: I wanted to get an update on that thermal power project that you are looking at in Bihar, the 1,320 MW. By when do you think that will come up?

A: The thermal power project will be on stream somewhere in 2021.

Latha: What is your outstanding with Uttar Pradesh?