In an interview to CNBC-TV18, Deepak Amitabh, chairman and managing director, PTC India, says there is a lot of latent demand in the sector and the company's performance in Q1.
The company posted a 9.57 percent rise in standalone net profit at Rs 47.93 crore for the quarter ended June 2015.
Below is the transcript of Deepak Amitabh’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Latha: Not very good on the topline, it is down about 11 percent. So before we speak about margins and other things not too many buyers, not too much of trading in power?
A: I do not think so that there are not many takers in the power. Topline as we have maintained depends upon the price at which per unit selling volume is there. For a trader it is the number of units and the average margin which we lock in that is very important. If you see our results there has been a good increase in income from operations which has shown increase by five percent then profit before tax (PBT) has shown increase by seven percent and profit after tax (PAT) as shown increase by 10 percent.
Latha: How much was the volume growth in terms of traded volumes and the average realisations?
A: I was saying that it is important to look at for any trader income from operations. Where I said there has been a five percent increase and in my PBT also there is seven percent increase and in my PAT also there is 10 percent increase. Now, total traded volumes in spite of the constraints which are well known to the world, regarding the poor health of discoms we have been able to maintain a flat growth during this quarter. One of the other reasons was that other then the poor health of discoms there has been certain issues in two of our PPAs which with the counter party we are trying to settle it down; which it should get settle down in the near-term. So, these two reasons are there in the volumes there was no further growth in the volumes.
However, the interesting thing is which we have been guiding the markets since the very beginning that our job is to keep getting more and more long-term volumes in to our portfolio. Which we have been able to do and if you see there is a 12 percent increase out of that 10,265 million units which we have done in the quarter, 3,838 million units come from long-term which shows that 12 percent increase compared to the quarter one of FY15. Therefore, our average realisation per unit has shown an increase of about 15 percent when our average realisation from 4.2 paisa has gone to 4.9 paisa. As we have always maintained that in the next one year also recently Rajasthan Electricity Regulatory Commission also gave a confirmation to the order of 500 megawatt supply which will begin in 2016-2017 for a 25 year period.
Latha: Like you said the discom health is a problem for the entire sector; will that steamy your growth in the near-term even if in the slightly longer-term you are expecting a better business? Are you worried about the current quarter and the next quarter? Will you be able to grow volumes?
A: We have always said that whatever is happening on the poor health of discom but there is a lot of latent demand. We have been working on a model to keep shifting now the demand to the medium-term also. So, we have been continuously trying to convert clients from a quarter client to a more than one year. So, our whole emphasis till the time these discom health etc these are not going to resolve in next quarter or two quarter.
We believe that in the medium-term it should start improving. Till the time we are going to manage our portfolio through the day ahead market, retail market which we started. One more thing which I wanted to point out that transmission constraint has also taken about 1.6 billion unit that is 1,600 million units. We had the contract but we could not actualise on the account of transmission constraint. However, these transmission constraint one of thing which goes from western region to northern region is getting resolved which should get over in this current quarter as we are speaking.
In the southern region also S1 to S2 there are constraints which they believe, the Power Grid we have been talking to them and they say there should be able to resolve before the end of this financial year. So all those combinations, and our ability to do more and more business continuously whatever opportunities to the retail customers etc we have been making effort.
Latha: How much might your EBIT increase or you PBT since as you say we shouldn’t be concentrating on topline?
A: We have always been maintaining our growth in the PBT and PAT. As we have said that our more emphasis is on shifting medium-term and long-term so we will not be able to give a prediction about quarter-to quarter. We have always refrained from doing that.
Latha: I am asking you for the full year?
A: For the full year also these constraints which are there, now suppose the transmission thing doesn’t get improve what is happening in this quarter obviously these things will have an impact on that. We believe that we should be able to maintain our modest growth in our volumes as well as our profitability.
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