Analyst Meet / AGM - Analyst Meet
Growth momentum in capex and capitalization will continue in FY18
The company held its Analyst Meet on 29th May 2017 and was addressed by key management of the company
Key Highlights
Overall, for the 12 months ended Mar 17, total capex incurred by the company stood at Rs 24429 crore while total assets capitalized during this period stood at Rs 32000 crore. This is the highest ever capex and capitalization value ever incurred by Power Grid in the past. Management expects the growth momentum of capex and capitalization will continue to remain in FY'18 as well.
The company has achieved all the 12th 5 year plan targets in every year and is entering 13th 5 year plan and despite base getting higher, management is confident of reasonable growth going forward as well.
FY 17 was the year where around Rs 30200 crore worth of ordering took place which was the highest ever in any year of 5 year plans.
The company also won the largest project in Tariff based competitive bidding (TBCB) scheme in FY 17.
As on Mar 17, the company has 139709 ckm of Transmission lines, 292543 MVA of substation capacities and Availability rate of about 99.76%. Overall, around 45933 ckm of transmission lines and 40700 MVA of substation capacities were added in 12th 5 year plan by Power Grid.
Book value of the company as on Mar 17 stood at Rs 95.20 and Capital WIP stood at Rs 38942 crore as compared to Rs 46815 crore for Mar 16. Management aims to reduce the WIP further.
As on Mar'17, total outstanding debtors stood at around Rs 2771 crore which translates to around 39 receivable days.
Total capitalization in 12th plan stood at Rs 117000 crore as against target plan of Rs 110000 crore.
Overall for 13th 5 year plan a total of around Rs 260000 crore is envisaged for power sector which includes around 106000 ckm of transmission lines and 292000 MVA of substation capacities.
Of the Rs 260000 crore of investments, government aims direct investment of around Rs 100000 crore from Power Grid and rest through TBCB schemes where Power Grid will play an important role along with other private players.
As on Mar 17, the company has ongoing projects of around Rs 105000 crore and new projects of around Rs 5000 crore and TBCB project of Rs 25000 crore as its total work in hand. Total expenditure done is around Rs 39000 crore till Mar'17. Thus Power Grid needs to do an investment of around Rs 90000 crore in next 3-3.5 years.
While Power Grid continued to keep its thrust on transmission segment, it is continuously working on the emerging opportunities which include intrastate transmission, telecom, opportunities in international market, railway electrification, smart cities etc. Railways present a significant opportunity to Power Grid, as railways intent to electrify 90% of its tracks in next 5 years ie in 13th 5 year plan which envisages an opportunity of around 13000r km.
Company has raised around Rs 2500 crore in debt market in FY 17 and there are no plans to raise any fresh equity in near future.
Overall, the growth momentum is expected to continue to remain in 13th 5 year plan as well.
During Mar 17 quarter, margins were lower due to higher wage hike provisions of around Rs 100 crore and CSR expenditure of around Rs 70 crore which was booked in Mar 17 quarter and related to entire FY 17. All these expenditures are a pass through and hence margins will not get impacted going forward.
In FY 17, the company has increased its dividend payout ratio from 20% to 30%.
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