PTC India Limited analyst Q&A

Thank you. Ladies and gentlemen, we will now begin the questi on-and-answer session. To ask a question please click on the Q&A tab on the panel and click on raise hand button. The operator will announce your name when it is your turn to ask a questio n. Please accept the prompt on your screen and unmute your microphone while proceeding with your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from Vishal Mehta from Oakland Capital. Please go ahead.

Sir, I have three questions. The first question was regarding our subsidiary HPX. If you could just throw some light on, please, almost in one month we will have the market coupling which will become active. How prepared do you think is HPX in terms of its software, the operations, and what kind of investments if at all we need incrementally to get on par with the largest exchange? And what is our internal estimate in terms of market share gains and volumes maybe in the next one to three years coming from that exchange? So, that is the first question. Should I go ahead with the questions and then maybe you can answer?

The second question is, sir, we have close to Rs. 3000 crore s of cash on our balance sheet. Just wanted to understand the perspective of how you internally are looking at utilizing this. I mean, if there is any mix in which, you know, how much will go in supporting the existing business in terms of working capital? How much will go to the new ventures, like the JV we planned? Or how much of that do we intend to pay out to the shareholders? If you could just highlight that, that would be great. And the final question is, sir, we just recently announced the JV. Now that is also in the renewable space and we just sold our assets in PEL, which were also in similar business. So, how is this venture different and what is our expectation from this in terms of scale? What is the roadmap? And if you could just highlight what w ill be the investment requirements for this, it will be great. Those are my questions. Thank you.

All right. Thank you. So, your first question related to HPX and with the onset of market coupling, you wanted to know the preparedness of the exchange . So, what I can say with certainty is that this exchange is basically operating with a ve ry, very modern technological platform. And we are having Bombay Stock Exchange as the tech support pro vider. And the exchange also has got a very, very competent IT team. So, I absolutely see no reason as to there should be any issue regarding tech support or technology not able to deliver what is required. I see absolutely no reason for that. In my considered professional o pinion, the exchange is functioning very well and functioning with a very latest state- of-the-art technology. So, that answers your questions regarding the preparedness of the exchang e. Regarding the market share, I mean, it is something which will evolve over a period of time. But we are expecting and we hope that because of its service offerings and its ability to connect with clients, this HPX also gains significant market shares. So, time will tell, but we are hopeful. So, that is regarding the HPX. Regarding Rs 3,000 crore cash utilization, you have asked me. So, out of that, you will see that around Rs 1,000 crore, we have to keep as working capital deployed in the main trading business of the PTC. And that is a seasonality. Sometimes with some cl ients, the outstanding position may increase. Sometimes it may decrease. And this is a ve ry, very high-volume business. So, basically, you need to be ready with adequate cash flows to maintain your trading operations. Regarding Rs 1,500 crore to Rs 2,000 crore, we definitely need to invest into some business ventures wherein we are able to ensure visibility of the revenue for the coming decade or so. And that relates to your third question regarding the JV. So, one such venture which we have researched is investing in the renewable energy assets in col laboration with NLC Renewable Energy Limited. So, your question, the third question and the second ques tion, if I were to answer in a joint manner, first query of you is that why we sold the PEL assets if you were to invest again into the renewable energy asset? So, my answer would be that in the PEL, we were the sole owners. And frankly speaking, we are not a very large asset operating company. We got a very good price. All our cash flow models predicted what we were to deri ve from that venture and the deal at which it happened with the ONGC was a very, very profitable deal. So, we went for that. That is one thing. But in this particular venture, we will not be actually required to deploy a large team to operate these assets because basically this is a venture with the NLC. Now NLC is a very, very large and very established player already in the field of not only renewable energy but conventional energy. So, they have got wherewithal and the op erating team and the knowledge, know-how and all other things. So, basically our rol e and responsibility would be related to facilitating the trading and finding the consumers, which I think is our forte. But to be able to get those trading rights and to get into that space, we need to collaborate with them. So, this is a win-win kind of situation wherein multiple kinds of products can be thought over a period of time. We will start with the plain vanilla distribution company bids wherein someone is bidding and if we think that it is making sense for us to quote prices and if we come L1 in those tenders, then some capital definitely would be put up. But at a later stage, merchant capacity may also come, consumer centric capacity may also come. So, this is a good beginning. Now regarding deployment of capital in this particular venture, in itially we are thinking about investing Rs.500 crore also. Since we will be a minority partner, almo st three times of this amount would come from NLC. So, that would make a decent corpus of around Rs. 2000 crore and on that we can further leverage that amount to invest into some big-size projects. Initially we are thinking like this. Time will tell how this venture is going further, but we are very hopeful and this address partly your question regarding capital deployment also. So, I hope I answered your questions.

No, I think this JV is Rs.500 crore we are thinking and there are other opportunities also which we are exploring. We definitely, the energy sector is a happening sector. This is a growing sector and then this great energy transition is happening before our eye s. So, it would be not very wise to distribute the dividend, rather you would like to pu t in some productive assets to ensure long-term revenue assurance for the company for the coming decade or so.

Great sir. Thank you so much for your detailed answers. I will send back to you.

Thank you. We will take one text question from Ragini Pandey from El ara Capital. The question is, what is the short-term and long-term and medium-term volume in Q2 FY’26? Second question is what? Yes, go ahead sir.

Yes, I would request Pankaj to answer that.

So, the long-term, we take consolidated long-term, medium-term and c ross-border together as a long-term. So, the long-term volume is around 12.2 BU and short-term vol ume including exchange is 13.8 billion units. So, that is to say 53% of the total volume is from the short-term and 47% of the total volume is from the long-term and medium-term contracts in the quarter.

Okay. Yes. The second question is, what was the trading margin in short-term and long and medium-term and what was the overall trading margin?

Yes. So, in short-term trade, the total including exchange is around 0.85 paisa in the quarter and in the long-term trade, it is around 7.02 paisa.

And the last question from her is, what was the revenue from HPX in Q2 FY ’26?

This half yearly you are asking or 26 is not yet complete?

Q2. So, yes, in Q2 September, the profit before tax for HPX is aroun d Rs. 1.26 crore and after tax, it is Rs. 47 lakhs.

Thank you. We will take our next live question from Channamallu Hall agudi, an individual investor. Please go ahead. Channamallu, your line is unmuted. Kindly unmute your microphone and go ahead with your question. Since there is no response , we will move on to the next question from Suyash Bhave from Wealth Guardian. Suyash, please go ahe ad with your question.

So, yes, I have a few questions. First is, in H1, we have done almost 50,000 MU. So, are you on track to cross one lakh volume for this FY and what would be the volume guidance for the next two years as well? So, that is my first question. Second is, I can see that our long-term mix has improved well as against our past few quarters. So, in our investor pre sentation as well, we talked about two long-term PPAs. One is the 100MW solar power agreemen t and the other is the 500MW solar power agreement with the additional storage costs. So, is it that we are now having a broader strategy in place to keep increasing the long-term mix? So, what would be your guidance on the mix going forward? And finally, we own 22% in HPX. Is there any such regulation or restriction that for any shareholder of HPX, so no other player can have more than 20% stake in us? For example, one of our existing promoters acqu iring more than 20% taken together and increasing their stake in us and PTC beyond 20. Is there any such regulation which stops them because we own 22% in HPX? So, these are my three questions. Thank you.

Allow me to answer your third question. First and second question , I will refer the matter to the Director of Marketing and the CFO. Regarding your third question , which pertains to the equity holding in the HPX, there is a restriction from the regulato r that anyone who is holding more than 5% equity in that exchange cannot become a trader member. So, that restricts our own trading on the HPS platform. So, that is the regulation. One cann ot have more than 5% if he wants to trade on that exchange. So, that is the third question. First question which pertains to your guidance on the long-term volumes and overall volumes. Bikr am, would you like to answer?

Hi, yes. With regard to our volumes, actually it is difficult to s ay where we will close the year. We are definitely looking at crossing last year, but let us see how it spans out. I do not think we will reach 100 BU. That number looks a little too ambitious right now. And with regard to our focus on long-term, definitely our focus has been on long-term and these PPAs, we are looking at signing and the volume of course will come in the next two, three years as and when the plants get commissio ned. The current volume increase is from the current long-term agreements only based on some weather patterns and scheduling b y the utilities. There is an increase under the current arrangement only.

I would like to clarify this one thing. As you have said that in th e half year we have done around 50 billion units. So, for the year it will be 100 billion units. But as you are aware that ours is a seasonal thing and every time if you go into the history, first half i s because of the summers and all that, the volume is high. But in the second half, because of the winter season and all that, our volume is low. So, it is not just the double, but as our ED marketing has explained that naturally we are looking for crossing the last year's volume in line with the same.

We are confident and hopeful that we will cross at least the last year's volumes.

Suyash, does that answer your question?

Yes, they do.

Thank you. We will take our text questions. The next text quest ion is from Ravindra ji, a n individual investor. In PFS conference call, MD and CEO said they are having a plan to raise the fund of around Rs. 300 crore to Rs. 500 crore through issuing preferential shares. And here you said the process of divestment of PTC India Financial Services is under active consideration of board. Which one is correct? Why you all are misleading all?

We are definitely not misleading and if you see the both are saying in a sense same thing. If they saying that they are going to raise the equity and if we are sayin g that we are going to dilute our holding, both mean one and the same thing. That is on e thing. But yes, the active action in this regard is subject to approval of the PTC board and that matte r is under the consideration of the board. That much I can tell you. We have engaged services of a reputed consultant in the field of this private equity and equity restructu ring, etc. So, we are awaiting the report and that report will be discussed in the board. This much I can give as a result.

Thank you. The next text question is from Rupesh Sankhe from Elara. Dear sir, what is average expiry years of our long-term portfolio of 7500 MV? How do you see b ilateral market as exchange prices are very low? Also, exchanges have now long-d uration contract products available for participants.

So, third thing is the exchanges are currently not having any long-term product. The maximum time period available for any exchange to operate is three months onl y. Beyond that, they cannot do any trading. And having the long-term contracts on the e xchange platform is technically speaking a lot many challenges have to be overcome. Very importantly, in the long- term contracts, there is always a question of having a very robust settleme nt mechanism, which is a very, very difficult thing to ensure in long-term contrac ts. Because not only the energy prices, but the fixed charges and the additional charge s relating to change in law and so many other complications come into the play. So, that is one thi ng that currently the long- term markets and the short-term market or the exchange market are very, very different thing and both are growing, no doubt. As of now, almost 85% power is b eing traded on the long- term contracts. So, that is likely to continue. 15% or less than 15% is happening through the short-term markets. Within the short-term markets, the bilateral contracts are slowly and gradually moving towards exchange products. So, that shift we are watchi ng and that is happening. And of course, we are part of both the markets. So, it directly does not affect us. It is helping us in our business. Overall volume is growing in exchange as well as long-term. So, that was your third thing. But what else you asked?

I will repeat, sir. How do you see bilateral market as exchange price s are very low? Also, exchanges have now long-duration contract products available for participants.

Okay. How do I see the bilateral contracts? One thing is very clear. If the prices on the exchange remain low, the volume of the trade on the exchanges or even in the bilateral markets increases significantly. So, basically, that helps us because there are more opportunities to trade. And long-term, as I told you, long-term will exist because for adequacy, th e long-term market has to remain. And that is very different market from the short-term market.

Thank you. We will take a live question from Vishal Mehta from Oakland Capital.

Hi, sir. In context to PFS, just wanted to understand, we are pl anning to dilute our stake over the medium to long-term. But there has been a development where thr ee independent directors resigned simultaneously. So, just wanted to get your pe rspective. How do you view that situation? And is there any concern that you see impacting the business? Thank you.

One thing is very clear. Actually, the tenure of those independe nt directors was in any case coming to an end in November. So, just a barely a month before their completion of the tenure, they chose to resign. That was unfortunate and surprising for us. But yes, business continues. When they had quit, we have already appointed one independent d irector who is very, very reputed name in the industry, in the financial services industry, which is Ms. Mini Ipe, who has been a managing director in the LIC and chairman and managing director o f LIC Housing Financial Services Limited. So, she is a very, very reputed and res pected name. And we are looking to fill up vacancies up to other IDs also. We will soon do that. Regarding business, I do not think it has made an impact.

Thank you.

Thank you. Next question is from Channamallu Halagudi, an individu al investor. Please go ahead. Mr. Channamallu, we are unable to hear you. Please check if your microphone is on talk mode.

So, what is happening, madam? In PTC India Financial Services, th e divestment process is not taking any serious action and taking very lot of time and lagging behind. So, what is happening, madam, here in PTC India Financial Services, some directors, independent directors are raising corporate governance issue that damaged the name and fame and credib ility of the PTC India also. If you are not taking any serious action about the divestment of the PTC India Financial Services, that will totally destroy the wealth of the investors who are invested in the PTC India also. So, please take a serious action about the divestment of the PTC In dia Financial Services, madam.

Okay. I would request our director of strategy, ED strategy, to respond to our queries. I appreciate your concern, but I also assure you that we are cognizant of the issues and whatever is required to be done on the business is being done. But let Rajiv give a detailed reply.

So, Mr. Halagudi, what we would like to respond to that is, one, of course, wi th the passage of time, there can be some impatience. So, no taking that away from you. But a lot of what you have said comes in the realm of conjecture. So, our response to that would be, see there is some things that happen in a boardroom which only those board members are privy to. What were the reasons? I think the facts have been placed before you. So, my request from the management team would be to not get into the realm of what is essentially conjecture. Thank you.

Thank you. We will take our next text question from Mangesh Kulk arni from Almondz Financial Services. What is timeline provided by PTC board for external consul tant to complete the PFS disinvestment deal? Also, with available cash in books and expe cted better second half, what kind of dividend we expect in near future? I know the company in past has rewarded shareholders with good dividend payout.

Regarding dividend, we already have a dividend distribution poli cy and we hope we will be following that policy. And there has been a consistency in our dividend payment performance. We hope to maintain that trajectory that much I can say here and now. O f course, the matter regarding distribution of the dividend is always, I mean, determined first by the board and then later on, I mean, ratified by the shareholders. But we are on the right track and I see no reason to see any major deviation occurring. So, that is that. Regarding cash utilization, I have already explained as to how we shall be going to put that cash into business.

Thank you. Next text question is from Sandeep Bhalotia from VLS Finance Limited. Wh at is the reason for substantial increase in cash and cash equivalence and trade payables for the quarter?

Basically, I mean, it was a better management of the outstanding positi ons against certain utilities. So, we tried to, I mean, follow it up very, very seriousl y with the utilities who were kind of, I mean, having huge accumulation of areas. So, realization of th ose areas led to this temporary surge in the liquidity. Second thing, currently, I mean, earlier it used to happen that so many distribution companies were facing liquidity crisis. Curren tly, on country wide, what we see is that the prices of the electricity in the day ahead markets have come down and that has really helped the utilities improve their financials. And part of that is again reflected in their better payment, timely payment, etc. So, that has led to accumulation of s ome cash into our books.

Thank you. The next text question is from Dheeraj Kriplani from Avend us Spark. First question is, Hi, sir. Can you please repeat what were long-term margins in 2Q FY’26? And sir, what was the HPX revenue for 2Q FY’26?

Yes. So, as far as the HPX revenue is concerned for the Q2, it is around Rs. 11.53 crores. And the margins for the long-term trade for the Q2 is 7.02 paisa.

And the second question is, Sir, what are your views on virtual PPAs?

This is an evolving field and we hope that it will help ou r business. Currently, as we see, it is targeted mainly towards the retail customer segments. We hope that with a little bit tweak in the policies, if this product is allowed to the distribution companies also, that will really change the dynamics of the renewable energy markets in the country. We hope that people in the policymaking circles are aware of those developments and we are hop ing that as the things evolve, it will grow and it will be an important component of the power markets in future.

Thank you. Next text question is from RK. What is the status of Teesta ? When will it be operational?

Yes, Teesta has sorted out some dispute issues with Haryana an d they have got a good amount of some pending payments based on the judicial orders also. An d their all restructuring plans has already been approved by PFC and REC. And as per the latest informatio n available to us, the construction of the plant is going on and they are planning to start the part of the capacity during the next year.

Thank you. Next text question is from Channamallu Halagudi. What is th e expected timeline for the divestment of PFS? Can you please give us any timeline exactly and what is the reason behind delay in divestment?

You see, sir, currently if you look, if you examine the books of the PFS, the book value would be around Rs. 40 per share. The market trading price is lesser than that. Y ou would not like really a situation in which, I mean, we are selling as if it is a fire sale. That is a very valuable business and we intend to realize the value in it. So, while right now, I cannot even say that when we shall be starting that process because that depends upon certain decisions from the board. So, it is difficult to give a timeline for completion of that ac tivity. I mean, we are aware of what is happening. We are aware that what actions would be planned to be taken and the board is seized of the matter. So, kindly have some trust and faith in the board.

Thank you, sir. Next question is from Rupesh Sankhe from Elara. Dear s ir, what is receivables as on September’25? Also, any amount outstanding beyond 90 days?

Yes, as far as the outstanding is concerned as on September ’25, the total debtors is around Rs. 4,960 crores. But as we also say there are creditors of around Rs. 4,145 crore and our net working capital utilized as on September’25 is around Rs. 815 crores. And as regards the more than six months debtors, so more than six months debtors on a gross basis is around Rs. 1200 crores. But if we take out, because of back to back creditors of Rs. 1134 c rores, the total exposure on account of more than six months is Rs. 98 crores. And out of that Rs. 98 crores, we have made some provisions also. So, I will say that major amount stuc k of around Rs. 35 crores, is one of the disputes with one of the customers. T hat our advocate has said that is a very good case. So, practically we can say that there is no outstanding for more than six months.

Thank you. As there are no further questions, I would now like to hand the confere nce over to Dr. Manoj Kumar Jhawar, Chairman and Managing Director for closing comments. Over to you, sir.

Hello, shareholders. It was a pleasure interacting with you. I hop e we were able to answer to your queries, to your satisfaction. On my part and on part of my management team, we assure that we shall be working in a very, very professional manner and we e xpect to maintain the great momentum which we have seen in the first half of this year and we hope to close this year on good note. Thank you so much.

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