PTC India - Steady Quarter; Result Update Q2FY15:: Edelweiss

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PTC India’s (PTC) standalone Q2FY15 PAT excluding PTC Financial Services (PFS) dividend and rebate/surcharge income (dividend of INR337mn and INR277mn of rebate/surcharge) was in line at INR440mn. Trading volumes at 12.7BUs (up 18% YoY), trading margin at INR0.044/unit and contribution and volume from erstwhile-tolling projects came on expected lines. While concerns persist on signing of PSAs^$amidst weak demand, incremental growth is backed by high-margin long-term contracts.

In-line volumes and margins drive profits

Standalone reported PAT of INR963mn was boosted by PFS dividend income of INR337mn and rebate/surcharge income of INR277mn. Adjusted for these, PAT at INR440mn came on estimated lines. Trading volumes jumped 18% YoY at 12.7BUs versus estimated 13BUs in a seasonally strong quarter driven by Bhutan-led cross-border hydro volumes. Blended trading margin at INR0.044/unit (INR0.043/unit estimates) was flat sequentially. Tolling converted trading volume of 464MUs and margin of INR0.27/unit kept the contribution steady at INR127mn. Finally, the net receivable position (debtors – trade payables) at INR11bn remained intact leaving INR2.6bn still pending to be recovered from the Tamil Nadu discoms.

Seeking long-term volume visibility 

It has been PTC’s endeavour to enhance long-term trading volumes, which will improve visibility and margins. In this regard, of the ~11GW PPAs^&, 3.1GW are operational and 4.8GW are expected to commence in FY15 and FY16 and 3.1GW in FY17. Also, power sale for ~7GW is in place and the company is working to place the balance 4GW projects through long- or medium-term contracts.

LINK

https://www.edelweiss.in/research/PTC-India--Steady-Quarter;-Result-Update-Q2FY15/27611.html