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Analyst Meet / AGM - Analyst Meet

Management is confident of capex of about Rs 20000 crore every year, during the 12th 5-year plan

Power Grid Corporation

01-Jun-2013, 12:43
Power Grid Corporation held its analyst meet on 29^th May'13, which was addressed by Mr. P Nayak, CMD

Key highlights

For FY'13, Power Grid reported 24% increase in total income to Rs 13328 crore on y.o.y basis and PAT was up by 30% to Rs 4234.50 crore. Transmission income grew by 26% y.o.y to Rs 12211 crore, consultancy income grew by 9% to Rs 231 crore, while telecom income grew by 15% to Rs 231 crore.

For FY'13, the company added 7562 GW-ckm and in terms of MVA capacity, power grid added about 29750 MVA during this period. For FY'13, the system availability stood at 99.9%.

The company incurred a capex of about Rs 20037 crore in FY'13 as compared to Rs 17814 crore for FY'12, which is up by 12% y.o.y. Assets worth Rs 17213 crore was commissioned during this period as compared to Rs 13045 crore commissioned during FY'12, which is up by 31% y.o.y. Management is well within its guidance for capex of about Rs 20000 crore for every year of 12^th 5-year plan.

Some of the major projects commissioned during the FY'13 include 765KV Sasan UMPP, 400 KV Mundra UMPP, 400 KV Gandhar associated with Mundra UMPP, 400 KV Maithon, and Jhatikara and Bhiwani Extensions etc.

Average monthly billing stands around Rs 1000 crore and outstanding is equivalent to 0.49 months or 15 days of billing as on May'13.

Company issued about 43.28 lakh new REC's during FY'13 translating growth of 4 times on y.o.y basis. Bio fuel, Wind and Biomass constitute about 91% of total registered capacity and Solar REC which commenced from May'12, saw a trading of about Rs 126 crore during FY'13.

In terms of consultancy business, domestically the company has about Rs 12000 crore worth of orders (124 assignments) and internationally about Rs 2250 crore (17 assignments). Projects worth Rs 6700 crore are under discussion with various clienteles. Globally, it is focusing more on newer geographies and markets such as Africa and CIS countries.

Of the total investment planned of about Rs 100000 crore by power grid for 12^th 5 year plan, about Rs 28000-30000 crore would be from equity and internal accruals and rest would be from debt. Of the total Rs 100000 crore, investments for 90% of project value is already approved. About Rs 34800 crore of debt is already being tied up of which during FY'13, funds comprising of domestic bonds of Rs 8840 crore and international funding of about US $ 770 M were mobilized.

Current debt equity ratio of the company stood at 72:32. Management continues to reiterate the fact that there is no need for the company to raise any money for the 12^th 5-year plan. They can manage debt equity ratio of even 75:25 for couple of years of the 12^th 5-year plan. However management has indicated that Power Grid is a government company and it is in the hand of the government to decide on divestment of their shares.

Power Grid has formed JVs for intra state transmission projects with Bihar and Odisha. Petition has been submitted for issue of distribution project in Odisha. Company is also assessing the renewable potentials in deserts and also in states of Rajasthan, Gujarat, J&K and Himachal Pradesh. Also the pilot project of Smart grid project in Puducherry is under implementation.

Overall, management continues to remain optimistic of capex of about Rs 20000 crore every year, which translates to about Rs 1 lakh crore in the 12^th 5-year plan

For FY'14, management has stated that it has secured finance and released orders for capex of 20000 crore which would support FY'14 transmission volume and EPS growth of 20% respectively.