Analyst Meet / AGM - Analyst Meet
Capitalization to capex ratio stood at 97% in FY'15 as compared to around 69% in FY'14
The company held its Analyst Meet on 2nd June 2015 and was addressed by Mr. Nayak CMD
Key Highlights
Power Grid presently owns and operates transmission network of about 116625 ckm of transmission lines and 195 no of EHVAC & HVDC substations having transformation capacity of more than 234710 MVA with an availability of its transmission network more than 99.8% and it wheels about 50% of total power generated in the country.
The company capitalized about Rs 21800 crore and incurred a capex of about Rs 22500 crore during the FY'15. This is as compared to capitalization of 15900 crore over a capex of about Rs 23200 crore in FY'14. Thus, capitalization to capex ratio stood at 97% in FY'15 as compared to around 69% in FY'14.
CWIP stood at around Rs 3988 crore as on Mar'15.
Average monthly billing stood at around Rs 1367 crore. Company billed about Rs 16410 crore in FY'15 and received about Rs 15848 crore, thus realization stood at around 97% of billing.
About 12600 ckm of transmission lines, 25800 MVA of substations and 4200 MW of inter regional capacities were added in FY'15. Some of the major projects commissioned in FY'15 are Jharsuguda-Dharamjaygarh 4200 MW, Indore-Vadodara, Satna-Gwalior, Wardha-urangabad, Raipur-Wardha, Kurnool-Thiruvalem, Sholapur-Pune, Angul-Jharsuguda, Silchar-Imphal, Champa-Raipur, Bina-Gwalior.
As on Mar'15, about 10% of transmission lines are on 400 KV, about 79% on 400 KV and HVDC lines and rest 11% on 765 KV. As on Mar'15, about 11% of substations are operating at 400 KV, 72% at 400 KV HVDC and rest 17% on 765 KV. The company is poised for a major migration to 765 KV and above going forward.
The mismatch of power generation and power transmission in South India will continue for some more time. With UMPP power projects and many gas based power projects were expected in South India by 2014-15. But none of these projects materialize. While, South was supposed to be power surplus and accordingly, the grid was constructed to take power from South to West. Around 2000 MW of short term power, due to such issues is not flowing. So unless the issues get resolved, there will be some volume issues on short term power supply from South to West.
Management expects strong consultancy revenue to come in FY'16. The company has received around 30 new orders from 21 clients of about Rs 7100 crore all inclusive in FY'15 and currently, around work is getting progressed in around Rs 19500 crore worth of projects. Internationally, the company is working in countries like Nepal, Bhutan, Bangladesh, Myanmar, African and other Asian countries. Internationally, 14 projects are under execution and 10 new projects are received in FY'15.
Management expects about Rs 22500 crore of capital outlay during FY'16 as compared to Rs 22456 crore in FY'15. Another Rs 22500 crore of capital outlay is expected in FY'17. So far in first 2 months in FY'16, the company has awarded projects of around Rs 4000 crore.
The company has utilized entire FPO fund of about Rs 5321 crore in FY'15.
Going forward, the debt equity ratio will continue to stand at around 70:30 as per Tariff guidelines.
The company is able to raise the new funds at lower interest rates. It raised about Rs 4360 crore at 9.3% in Sep'14 then about Rs 2580 crore in Jan'15 at 8.2% and latest in Mar'15, where the company raised Rs 1305 crore at 8.15% rate. So interest costs will come down going forward.
In Smart Grid and Smart city, work has started in Gurgaon and in Andhra Pradesh. Project report for Gurgaon is getting finalized. Smart city consultancy work is carried out in States like Punjab, Karnataka and HP. States like Tripura, West Bengal and Chhattisgarh, work is still under progress while Banglore and Puducherry is still evaluating.
Going forward it will be safe to assume around 15% ROE on the projects which are capitalized. Even with competitive bidding, the company is able to maintain this kind of ROE.
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