PTC India : Transcript Q4 FY23

"Investor Call of PTC India Limited Q4 FY23 & FY23

Earnings Call"

May 30, 2023

MANAGEMENT: DR. RAJIB KUMAR MISHRA - CMD, PTC INDIA LIMITED

MR. HARISH SARAN - EXECUTIVE DIRECTOR, PTC INDIA LIMITED MR. PANKAJ GOEL - ED & CFO, PTC INDIA LIMITED

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PTC India Limited

May 30, 2023

Moderator:	Ladies and gentlemen, good day and welcome to the Investor Call of PTC India Limited
	Q4 FY23 & FY23 Earnings Call.
	The Management Team at PTC India is led by Dr. Rajib Kumar Mishra - CMD, PTC. Dr.
	Mishra is accompanied by Mr. Harish Saran - Executive Director, PTC and Mr. Pankaj
	Goel - CFO at PTC India Limited.
	At this moment, all participants are in listen-only mode. Later, we will conduct a
	question-and-answer session. At that time, you may click on the Q&A tab on the left-
	hand side of your panel to ask a live question. Please note that this conference is
	being recorded.
	I now hand the conference over to Dr. Rajib Kumar Mishra, CMD, PTC India, to make
	an opening statement. Thank you and over to you Sir.

Dr. Rajib Kumar Mishra: Good afternoon, dear investors and analyst friends.

FY23 for PTC India Limited was a year of consolidation and cleaning up of our accounts. If you have gone through our results, it is clearly visible from our results that our trading volume, we have increased our margin from a substantial number that is from 2.82 to 3.2 paisa per unit. Our short-term volume which mainly is from the exchange volumes has come down from 61% to 53%. We have always maintained that the right kind of balance for our portfolio is almost 50% from long term and medium term and 50% from shorter term market. And for in this year, we have achieved this to a great extent. Our advisory business has shown a very healthy growth of around 45% and we could earn a revenue of 57.54 crore.

Now let me just share with you that this year, which has ended in the 31st of March was a year where we have seen international geopolitical tensions and the real shock of fuel supply throughout the world. Now during this uncertainty, some of the PPAs which we have signed was operating in the first quarter and to some extent in the second quarter was below par and that has led to the reduction of volume in some of the PPAs. Most important thing, as a prudent move, we have ceded all the volumes in the exchanges where we were getting a negative margin that is the cost to serve was more than what we used to earn from the trading margin and this was a conscious call. So, you can see very clearly that our exchange volume has come down drastically from 44.6 billion unit, which we did last year. And this year we have done

29.49 billion unit. So, this was a conscious call, but that has helped us to consolidate our position in this market.

Now one major change which we have seen during the year was a government directive or the surcharge payment that is late payment surcharge scheme, which came into operation from August 22 and if you have gone through our results, you must have seen that the surcharge earned, which was net of what we paid and what we got, there is a difference of around INR 170 crore, for the year, which is substantial. But what I would like to mention here, there will always be some of the

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things which are not under the control of the company, and that is because of the changes in the

government rules or the regulations which we get. And this was one thing which has little bit affected the profitability of the company.

Our cash balance has increased considerably and the treasury income has increased almost to 6.6 times. Now this is something which I would like to mention that as because the sundry debtors have come down from INR 6700 Crore to INR 5400 Crore approximately, our liquidity position has improved drastically to around INR 979 crores at the end of 31st March. These are all positive signs. Why I will mention it whenever I met the investors in the past, they always were a little worried that you have a significant outstanding in two of these states that is J&K and Bihar. I'm very happy to share with you that an outstanding which was around 1600 crore in J&K last year, we have a very manageable outstanding of less than 600 crore on 31st March. Similarly in the case of Bihar also, the outstanding is in very manageable level. And we are happy that the company is at a level where the borrowing for our working capital has come down drastically during this period.

Now let me tell you something about our subsidiary company:

For the first time, all the three companies, that is the holding company and the two subsidiary companies, PTC Financial Services and PTC Energy Limited has shown profit this year and the PTC Energy Limited, the concern which was of the tariff, which was not paid by Andhra Pradesh because of the legislative disputes between the Andhra Pradesh and the wind suppliers, has been resolved and High Court has given that in favor of the IPP's. So, with that and the payment we have received from LPS scheme, we are in a very good position for the subsidiary company and let me share you one thing before you ask question on this. The monetization of PEL is very much on cards, expression of interest has already been issued and we have received a very good response from the bidders and it is expected to be closed by June end. So, with this, I feel that I have given my opening remarks. I'll hand it over to my CFO to tell you about the results more and then I'm open to answer your questions if at all you have.

Pankaj Goel:Thank you, CMD sir, and good afternoon to all of you. Now, as CMD has already explained regarding the holistic business scenario which is prevailing in for the PTC or power sector as a whole, so I'll go through the numbers and we'll try to explain it further.

First I'll go through the quarter wise result for the March 23 vis-à-vis the March '22 Quarter:

The volumes stood at 16.4 billion units compared to 17.3 billion units. As CMD has already explained, the volume was under pressure due to short term transactions, mainly at the exchange platform. There, margin is very low. However it has a positive impact on realization on weighted average margin per unit, which has actually increased to 2.91 paisa per unit from 2.46 paisa per unit during the last quarter. So,

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what we mean to say that instead of a quantity, in this year we have we have actually eye on the quality trading. That is because our weighted average margin has increased from 2.46 paisa to 2.91 paisa per unit for the quarter. So, likewise, the profit before tax stood at INR 192 crore in comparison to INR 211 crore during the last quarter, again the PBT was under pressure mainly due to the surcharge income. So, as you are already aware and in the last call we have already discussed that during the year, MoP has come out with an LPS scheme whereby all our long outstanding dues have been cleared on an interest free equated monthly installment basis. Some of the customers have opted this scheme having a total outstanding of around 2,644 crore. The company is regularly receiving the installment under the LPS scheme, resulting in better liquidity, which has already been explained by CMD sir that our net cash position as on 31st March was 979 crore. However, as these installment are without interest, he said, it has an impact on our surcharge income. So, likewise because of the liquidity position, our total debtors on a yearly basis has gone down from 6,771 crore to 5,437 crore. Likewise, the PAT is almost at the same level of 155 crore during the quarter. The total other comprehensive income stood at 175 crore in comparison to 166 crore. During the last quarter, the increase in comprehensive income is mainly on account of increase in the fair valuation of our equity investment in Teesta Urja Limited. Earnings per share stood at during the Quarter 5.25 in comparison to 5.27.

Now I'll go through the year ended results:

The volumes stood at 70.6 billion unit as compared to 87.5 billion unit. The reason I have already explained while I was explaining the quarterly results, again profit before tax stood at 481 crore compared to 571 crore. Again, it was under pressure due to surcharge income, which I have already explained due to the LPS scheme notified by Ministry of Power. The profit after tax stood at 370 crore in comparison to 425 crore. The total other comprehensive income stood at 389 crore compared to 435 crore. Earnings per share stood at Rs. 12.49 in comparison to Rs. 14.35.

Now I'll go to the consolidated results:

For the quarter, the volume stood at 16.5 BU compared to 17.4 BU. Profit before tax stood at 171 crore compared to 216 crore. Profit after tax stood at 129 crore compared to 157 crore. Total other comprehensive income stood at 149 crore compared to 167 crore. Earnings per share stood at Rs. 3.94 in comparison to Rs. 5.01 during the last quarter.

And I'll go to the year ended consolidated results:

Volume stood at 71.1 BU in comparison to 88 BU during the last year. Profit before tax stood at 680 crore comparison to 745 crore. Profit after tax stood at 507 crore compared to 552 crore. Total other comprehensive income stored at 527 crore in compared to 571 Crore, it almost remained at the same level. Earnings per share stood at 15.05 in comparison to Rs. 17.10 during the last year consolidated as a whole.

Thank you very much.

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Moderator:Thank you very much. We will now begin the question-and-answer session. We will move to our next question that is from the line of Mohit Kumra from Kumra Investment Company. Please go ahead.

Mohit Kumra: So, sir, I just wanted more light on your investment in HPX. So, is that going as planned? Are you managing to take any market share from IEX? And what is your future plan regarding it? Because there is a catch 22 that if you are a 25% investor, you can't trade on it, and that is also a situation, right? You can't trade on it and you have to be a 5% investor to sell your stake and then. So, can you just give me some light on that investment please? Shed some light on it please.

Dr. Rajib Kumar Mishra: Thank you, Mohit. Very pertinent and relevant question which I wanted to touch upon, but you asked me this question. HPX is doing very well in recent times and on the product which they are in right now, that is Term Ahead Market. They are almost at par with IEX on several days and it is ahead of the other exchange that is PXL in that segment. To give you some more numbers, they have traded more than 4.5 billion units since the day it has started its operation, and in last 9 to 10 months. And every day it is improving its market share. So, that's really very encouraging. Let me tell you something about the prospects. Everything is in place. The exchange is doing very well and now they have more than 534 clients and on some of the days, it is having almost the equal volume compared to the leading exchange that is IEX. Important thing is now we are getting news that market coupling will be introduced soon and there will be a good opportunity for this exchange to get the benefit because of that. Your second part of the question was our investment in that. Right now, we are where we were and we are not decided what to do with our investment. It is a good investment. So, we have to keep it and that's what where we stand at this point of time.

Moderator:Thank you. In the meanwhile, while we wait for the question to assemble, we have a few text questions. Sir, should we go ahead with it?

Dr. Rajib Kumar Mishra: Yes, please go ahead.

Moderator:Yes, the first text question is from Manoj Alim Chandani. What is the reason for increase in Q4 standalone PAT earnings and fall in consolidated PAT earnings? What is the outlook in FY24 in total income margins pretax and post-tax?

Dr. Rajib Kumar Mishra: The CFO has explained the reasons. In the Q4, we are almost at par what we have done previous year and that we have already explained for the future we will try to see, but for the month of April and May as we complete, we are almost 21% up

	compared to last year's volume.
Moderator:	Thank you. We will take the next question that is from Nilai Kumar Raj as an individual
	investor. Are PTC promoter willing to sell stake to private energy companies as news
	circulated in the past many times?

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