Analyst Meet / AGM - Analyst Meet
Business scenario is cautiously improving and more of short term trading is happening
The company held its analyst meet on 14 Nov 2018 which was addressed by Mr. Deepak Amitabh MD
Key Highlights
Volume in Sep 18 quarter stood at 16813 MU up by 32% YoY.
Short term volumes which accounted for 55% of total volumes in Sep 18 quarter, stood at 12.2 BU up by 48% YoY. Medium term volume stood at 0.6 BU and was up by 4% YoY. Long term volumes stood at 9.3 BU up by 41% in Sep 18 quarter and account for around 42% of total trade.
OPM was lower due to high short term trade volumes. Which should see improvements going forward as long term kicks in.
The company has adopted Ind AS 115 and revenues were reported net of power purchase cost. So while revenues will be different, there is no impact at the OP levels.
Expects supply of 400 MW of long term PPA for renewable project to commercialize by end of FY 19. Should give around 2.25 BU of trading volumes on long term basis.
Margins stood at Rs 4.1 paisa as compared to 4.3 paisa for Sep 17 quarter, due to higher short term sales.
Overall, business scenario is cautiously improving and hence more of short term trading is happening.
Once the confidence improves, people will enter for long term PPAs and hence margins will improve.
There is no problem on demand side of power as its growing around 6-7%.
Supply side constraints on coal and recent liquidity issue from NBFC accelerated the problems for long term PPAs. However things are and have been stabilizing.
Over the years, the company has witnessed lot of challenges and has come out stronger. Expects the current state to also pass and will emerge stronger.
Management has reiterated that PFS funds will be met by PFS only through its internal or external sources and as a Promoter, it will not put in any additional money.
The company has started consultancy services which apart from traditional consultancy includes services related to SEZ maintenance, related to Open access to T&D, energy efficiency etc. Net order book stands at Rs 93 crore in this segment as on Sep 18, from Rs 50 crore in June 18 quarter and Rs 11 crore in Mar 18.
Athena project which was worth Rs 150 crore has seen written offs to the extent of Rs 141 crore. Expects recovery and provisions written back in next year, as things stabilize.
The company has applied for licence for power exchange to CERC and will soon receive any updates. The license will make PTC command a better premium and pricing in entire value chain of power trading.
Expects to grow volume in strong double digits in FY 19.
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