PTC India Limited analyst Q&A

Thank you very much. Ladies and gentlemen we will now begin the question and answer session. We have our first question from the line of Yogesh Jain from Garima Capital. Please go ahead.

Firstly, when are we likely to receive the funds of the power company which we sold some time back? Secondly, what are the prospects of the power trading business for the current year?

Yes. Mr. Jain. I mean, as far as the ONGC sale is concerned we have informed you that we have the approval from the shareholders. We are at the final stage of discussion with ONGC a couple of things which we need to finalize before we enter into the final agreement and the deal will be completed. So as you know this is a large deal and requires a lot of confirmation from different parties. So that is going on and we expect that this will be done soon. And as soon as the deal will be done we wi ll complete all the condition decisions a nd then we can expect the fund from ONGC. So this is the status right now. We'd keep on informing you and the investors the s tatus of that. The second part which you asked is on the current power trading business. It is going well what we have expected and in the month of April there was lesser demand than expected, but in the May month, 15 May onwards the demand has picked up and we are on the track as far as 15th May until date is concerned. So as far as the trading is concerned this year, we are doing fine. And if the monsoon is good and the generation from both in Bhutan as well as hydro plants in India if we get a good generation certainly the next quarter also we expect to do well.

Thank you. We'll take the next question from Vishal Mehta from Wealth Guardian. Please go ahead.

Sir I just have two questions. One is that we are going to receive about INR 31 per share from the sale of PEL. So just wanted to check how much do we intend to pay out as dividends to the shareholders and if yes when do we expect this dividend to come through?

The second part Mr. Mehta I have just answered. The first part I would like to answer that at this point of time we have just declared the annual final dividend for the company a nd we have to call a Board meeting for deciding what to do, once we get the receipt from the ONGC sale, but at this point of time I would restrict myself only to the dividend declared for this financial year.

Okay. This question I'll just give you some background. The thing is we have INR800 crores of cash already on the b ooks and we generate about INR 400 crores. So in an asset -light business we thought we could afford to be a little generous with the shareholders given that this is the 25th year of our operations. So that's the background for the question.

No, certainly. I mean whatever you have suggested I'll pass it on to the board members.

Great, sir. And sir one more question I had was considering the challe nges we face historically in PFS and the impact it has had on PTC itself when do we expect to sell this business?

Last time also I said that we can't take all the subsidiary company at one go. We have informed in the past that the PFS sale is on hold and we have not kept it in advance. So once the PEL deal is over then we will take it to the board whether we should go ahead with it or not. So again once I get any kind of nod from my board, I'll come to you to share more information.

Okay sir. Thank you so much. That’s all from my side.

Thank you. We will take a text question from Sriram R.

What is the current status of the regulator with reference to market coupling? If the regulator decides to implement the same, how long it would take to operationalize the new system?

CRC has already given for shadow pilot and that need to be implemented by the system operator that is Grid India. And they are in the process of developing it. And once it will be implemented, the regulator will get a conference and the kind of sense of implementation based on the results which they will get from the shadow pilot. So that's one thing which they have already ordered as far as the final implementation of the market coupling. Of course, that will depend upon the shadow pilot. But I understand the entire policymaking in the country, they are talking about one country, one price and of course, the one price discovery through the exchan ge. So that has to be done. I think the market coupling has to be implemented.

Thank you sir. The next text question is from Lipika Kundu, an Individual Investor.

Kind attention CMD sir, other than regular yearly dividend, which you have already announced, are you considering any special reward like bonus, stock split, etcetera, on the special occasion of silver jubilee year?

I just mentioned that our Board has just declared the annual dividend, and we have not discussed anything on special dividend or any bonus dividend or any dividend related to PEL sale. Once that's there, we will discuss it at the Board and then I'll be in a position to share more information on that.

Sir, can you tell us your thoughts on the business going ahead? The mix between long-term and short-term contracts are going in favour of us this coming year? What ballpark range are we seeing in volume growth? And are you maintaining our market share in India?

Yes. I have just mentioned that we have maintained a growth in our volume year -on-year. And I have just mentioned that we would like to maintain the share of almost 50%-50% from long- term and medium-term and the shorter-term trade. As far as the projections are concerned, the growth projections in the country is to the extent of 6% -7%. And certainly, we would also like to meet that target. And do better than what the growth of demand in the country is. Important thing is we are trying different products. And once that is done, I'll be in a position to share you more related to the import of power from Bhutan from new projects, similarly, import of power from Nepal and similar other aspects of doing business for this financial year.

Thank you. The next text question is from Yogesh Jain from Garima Capital.

Sir, when is IPO of Associate Company, Hindustan Exchange, expected?

Mr. Jain, I mean I just mentioned that they have done the first profit of around INR15 crores this financial year, and they have kept a very ambitious target for this financial year as far as the volume is concerned. And we have just started this operation almost 2 years back on the 2nd of July 2022. So the company has to have a consistent growth and the robust performance before we go back to the investors for this kind of IPO. And it has not been decided in the HPX Board when they should go for the IPO.

Thank you. We'll take a line question from Vipulkumar Shah from Sumangal Investments. Please go ahead.

What was the exit market share of HPX at the end of March?

Shah ji, there are 3 or 4 different segments of market in which the company is doing business. They have a substantial market share in the term -end market and the ADSs market and the contingency market. But as far as the day ahead market, because of the dominan ce of one particular exchange for long, they do not have much of share. But for other segments, they have almost 1/3 or more share in those products.

And sir, my second question is regarding our financial services subsidiary. So there has been a substantial increase in the provision. So what are the reasons for that? And what type of prospects do you see for that in the current year for that business?

Shah ji, let me tell you, I mean, if I can see the accounts of this company as well as PTC Financial Services, all the worrisome things have been provisioned for both the companies right now and the accounts are pretty clean. And anything where we feel that there was a scope of provision, the Audit Committee and Board has done provisioning for that. So I feel that at this point of time, the PFS as well as PTC accounts are purely clean from any kind of provisions.

Yes, that's right.

Thank you. We'll take our next text question from Pratik Kapoor from Proinvest.

What is your outlook on the surcharge income? Since, it was flat in the current financial year.

As far as surcharge income is concerned, although it's a part of the PPA and the income is booked once there is a delayed payment, we cannot give a prediction to this, but you have seen that we have maintained surcharge income in last so many years. And wi thout going into the future forecast on the surcharge income for the company, we understand that the environment in which we are operating remain same. The earning on from the surcharge income would also be either better than this or in this area only.

Thank you. Next question is from Vishal Mehta from Wealth Guardian.

Can you please share the volumes, revenue and profit figures for HPX for FY '24 and FY '23?

Yes, CFO, you can take it

Yes. The total income was INR43 crores for March '24, INR17 crores for March '23. The profit before tax for March '24 was INR16 crores, and there was a loss of INR10 crores in March '23. Profit after tax in this financial March '24 is INR14.94 crores there was a loss of INR10 crores in last year i.e March '23.

Thank you. Next question is from Aditya Y. from Damani Securities.

Sir, one very important question that bothers a lot of long -term investors like us. When do you see the receivables number coming down? This year, again, they went up. Do you consider the entire receivables good and no provisions required for them?

In very simple answer, I can say that all the receivables are good, and there is no reason for any of our investors to worry on that . In many cases for some cycles, the receivables goes up. But again, with a very rigorous follow-up with these utilities, we could bring it down in the past, and we are very confident that it will come down again. I'll request Director Commercial also to add the serious efforts what the company has made to bring it down.

Dear investors, basically, it must be appreciated that most of our outstandings are from the state governments. And we assume that, I mean, the Government-backed companies are not likely to default on their outstandings. That said, we are making serious efforts. Our major outstanding are towards the state of Jammu and Kashmir that is a very special status state and a lot of financials update state are dependent upon the central grants and assistance. As we understand now, the entire country and particularly J&K, they have been going through the sensitive phase of election and all. We are expecting that since the elections are now over, we will be seeing central Government funds flowing to the J&K and we'll be able to liquidate our liabilities. That is one aspect. Other than that, we are not seeing any major default from other customers. We are in continuous touch and follow-up with our outstandings towards Andhra Pradesh Power Development Corporation as well as the third major outstanding are against the Bangladesh Power Development Board. So that is, again, a sovereign Government to Government guarantees there. So we do not expect any default.

Thank you. Next question is from Siddharth Shah from Vikram Advisory Services Private Limited.

When can we expect MD coming in for PFS? In PFS con call, they had mentioned it is in advanced stage. It has been more than almost 9 months without an MD. Could you provide a timeline by which an MD would be coming in?

I think the PFS con call, they must have given you the complete picture. But if you have asked to the holding company, let me tell you, the MD was selected almost 1.5 months back and all the other formality in the company is complete. As you know, it's an NBFC. And generally, for a selection of Board level position, it goes for clearance from the regulator. And I think the final stage of regulatory clearance will be done soon, and the selected person will be in a position to join as early as possible.

Thank you. As there are no further questions, I would now like to hand the conference over to Dr. Rajib Kumar Mishra for closing comments. Over to you, sir.

Thank you very much. At the end of this investor presentation and call, we would like to thank all who have participated in today's call. And let me once reassure you that the company in its 25th year is doing very well, and we, once again, reassure our in vestors and all our analyst friends that we will be doing as per the expectations of our investors post their faith on this company. One thing which I have always mentioned in the past also, that is one of the rarest company in this sector has always rewarded their shareholders and consistently given highest dividend in this segment. We would continue or strive to do something better than this. Thank you very much.

Thank you, sir. Ladies and gentlemen, on behalf of PTC India, that concludes today's session. Thank you for your participation. You may now exit the meeting.