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PTC India Ltd
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Ladies and gentlemen, good day, and welcome to the investor call of PTC India Limited Q4 FY '23 and FY '23 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. [Operator Instructions]
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.
Good afternoon, dear investors and analyst friends. FY '23 for PTC India Limited was a year of consolidation and cleaning up of our accounts. If you have gone through our results, you can clearly visible -- it is clearly visible from our results that our trading volume, we have increased our margin from a substantial number, that is from INR 2.82 to INR 3.2 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 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 INR 57.54 crores.
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 seeded 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 billion units last year -- 44.6 billion units which we did last year, and this year, we have done 29.49 billion units. 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 for the surcharge payment, that is late payments such as 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 108 crores, which is substantial. But what I would like to mention here, there will always be some of the 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 a little bit affected the profitability of the company.
Our cash balance has increased considerably, and the treasury income has increased almost to 6.6x. Now this is something which I would like to mention, that as because the sundry debtors have come down from 6.7 -- INR 6,700 to INR 5,400 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'll mention it, whenever I met the investors in the past, they always were a little worried that, "You have a significant outstanding in 2 of the states that is J&K and Bihar." I'm very happy to share with you that an outstanding, which was around INR 1,600 crores in J&K last year, we have a very manageable outstanding of less than INR 300 crores 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 3 companies, that is the holding company and the 2 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 Andra Pradesh because of the legislative disputes between the Andra Pradesh and the wind suppliers has been resolved and High Court has given that in favor of the IPPs. 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. Explanation of interest has already been issued, and we have received 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 answering your questions, if at all, you have.
Yes. 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 for the PTC or power sector as a whole, so I'll go through the numbers and we'll try to explain it further.
The -- first, I'll go through the quarter-wise result for the March '23 vis-a-vis the March '22 quarter. The volume stood at 16.4 billion units compared to 7.3 billion units. As CMD has already explained, the volume was under pressure due to short-term transactions, mainly at the exchange platform where margin is very low. However, it has a positive impact on realization on weighted average margin per unit, which has actually increased to INR 2.91 per unit from 2.46 per unit during the last quarter. So what we mean to say that instead of a quantity in this year, we have actually eye on the quality trading. That is because our weighted average margin has increased from INR 2.46 to 2.91 per unit.
So likewise, the profit before tax stood at INR 192 crores comparison to INR 211 crores during the last quarter. Again, the PBT was under pressure due to -- 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 up with LPS scheme whereby our all 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 INR 2,644 crores. 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 cash position as on date is around 900 -- as of 31st March was INR 979 crores.
However, as these installments are without interest, it has an impact on our surcharge income. So likewise, because of the liquidity position, the -- our total debtors as on a yearly basis has gone down from INR 6,771 crores to INR 5,437 crores. Likewise, the PAT is almost at the same level of INR 155 crores during the quarter. The total other comprehensive income stood at INR 175 crores in comparison to INR 166 crores during the last quarter. The increase in comprehensive income is mainly on account of our increase in the fair valuation of our equity investment in Teesta Urja Limited. Earnings per share stood at during the quarter INR 5.25 in comparison to INR 5.27.
Then I'll go through the year-ended results. The volume stood at 70.6 billion units 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 INR 481 crores compared to INR 571 crores. Again, the -- 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 INR 370 crores in comparison to INR 425 crores. The total other comprehensive income stood at INR 389 crores compared to INR 435 crores. Earnings per share stood at INR 12.49 in comparison to INR 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 INR 171 crores compared to INR 216 crores. Profit after tax stood at INR 129 crores compared to INR 157 crores. Total other comprehensive income stood at INR 149 crores compared to INR 167 crores. Earnings per share stood at INR 3.49 in comparison to INR 5 during the last quarter.
Now I'll go to the year-ended consolidated results, Volume stood at 71 BU in comparison to 88 BU during the last year. Profit before tax stood at INR 680 crores in comparison to INR 745 crores. Profit after tax stood at INR 507 crores compared to INR 552 crores. Total other comprehensive income stood at INR 527 crores compared to INR 570 crores -- it almost remained at the same level. Earnings per share stood at INR 15.05 in comparison to INR 17.10 during the last year, consolidated as a whole. Thank you very much.
[Operator Instructions] The first question is from the line of Vaibhav Gupta from Bowhead Investment Advisors.
Sir. I wanted to understand like what are overdues...
Vaibhav, your voice is still not audible enough. Can you please adjust the mic a little bit?
I'll just come back in the queue and ask the question later.
In the meanwhile, while we check the connection for Vaibhav, we will move to our next question. That is from the line of Mohit Kumra from Kumra Investment Company.
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 IPX -- IEX, sorry, 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 if you are -- 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.
Thank you, Mohit. Very pertinent and relevant question, which I wanted to touch upon, but I have -- 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 PXIL 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 the last 9 to 10 months. And every day, it is improving its market share. So that's really very encouraging.
And 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. The 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 have 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.
[Operator Instructions] In the meanwhile, while we wait for the questions to assemble, we have a few text questions, sir. Should we go ahead with it?
Yes, please go ahead.
Yes. The first text question is from Manoj Alimchandani.
What is the reason for increase in Q4 stand-alone PAT earning and fall in consol PAT and earnings. What is our outlook in FY '24 in total income margins, pretax and posttax?
We have -- the CFO has explained the reasons in the Q4. I mean, 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 months of April and May, as we complete, we are almost 21% up compared to last year's volume
Thank you. We will take the next question. That is from Nilay Kumar Raj, an individual investor.
Are PTC promoters willing to sell stake...
I've clarified this in the earlier calls also. And as you know, that we have said always maintained the same position that PTC does not have any information of such development.
The next question is from [indiscernible] from Avendus Park.
With the increase in power demand and supply crunch being felt in summer months in India, contracts which assure supply is likely to be more in demand, PTC India should be a natural beneficiary in this scenario. Is this the case? Is PTC India getting more inquiries to sign short-term contracts?
I just mentioned the factual statement for the months of April and May. Our volume as compared to previous year is almost 21% more than what we did last year. Beyond that, I'll not be in a position to give more clarifications. But of course, the traded volume is always higher if the increase in demand is more.
We'll take the next audio question from the line of Mohit Kumra from Kumara Investments Company.
So this question is regarding PTC Financial Services. So I have a couple of questions on that. The first is, for a long time, there was this stated intention from the company to sell your stake in this company? Is that still on the table since last year's purported governance issues? And my second question is that if that is not on the table, does your company have any intention to put even more money into PFS now? Or is that now left alone as was stated earlier by you?
Second part, I will answer first. We have no intention to invest more in PTC Financial Services. And we maintain the same status in what we mentioned in the earlier call, that the divestment of PTC Financial Services is on pause. And that means we are yet to take some further decision on this.
Next question is from Manoj Alimchandani.
At the outset, Mr. Mishra, let me congratulate you for the excellent performance and good dividend you have declared, particularly in view of the huge challenges we have faced last year particularly in terms of governance. Now it seems in the last couple of quarters, with the clear disclosures you have clarified on lots of governance issues and the improved results and dividend are really heartening.
Now I would like to come on particularly 2 issues. This governance issues, which was a big challenge from us apparently due to vested interest from what we understand, are they behind us totally? Can we focus totally on business in PTC India, the flagship and also the subsidiaries or PTC Financial? Because we keep on seeing there are apparently very negative articles in media coming regularly, which seems to be inspired or conspired, and they raised negative issues and concerns about the company. We are a first-class company, very good professional management, very good Board, particularly the current Board in PTC India and PTC Financial is outstanding first class and far better than earlier Boards. But still, even last week, we saw some negative articles about MCA investigation, SEBI investigations, Apparently, they are old issues or there are new issues? Can we focus on governance? One is this point, I would like you to clarify.
Second thing, is PTC Financial was -- last 2 years because of the macro industry, it was in a down cycle. Now it has strengthened, cleaned up the balance sheet and on the takeoff stage as we can see in terms of the last 2 quarters' performance and growth in business and NIMs, which is happening. And I also -- we also appreciate the reconsultation of the management team, our new members coming at a Board level, CFO level, and Mr. Pawan Singh is doing an outstanding great job with full transparency, He has been interacting with the investors, institutions and really taken it on the next stage. I would congratulate you for that. So we actually look forward to your clarifications, particularly in terms of governance which is coming in the media.
And another thing which is impacting our valuations. Last 10 years, we have seen PTC India, the valuation around the same level while the IEX and other companies are going far ahead and power sector is leaping in terms of multiples. And we should be at least 2x of book if not higher, considering the clean balance sheet. Also our working capital management is good, our customers are good and the business has got huge opportunities as you highlighted. This is one thing. And we also appreciate you coming on the channels, particularly the CNBC and other channels, every quarter and actually sharing the truth in spite of negative stories in the press. Would like you to answer the question in detail, if possible.
Yes. Thank you, Manoj Ji, for appreciating the efforts the company has made for the benefit of our shareholders. And as we have always maintained, we work for our shareholders and the stakeholders of the company. And let me just give you a confidence from this room on behalf of all the top management that the company is on the right path, and we are doing a very good business. And we are all focused towards the benefit of the shareholders in real spirit.
Now the question is, you have -- we have given the full disclosure in our accounts -- in the annual accounts, and you must have gone through that and nothing beyond it. And whatever was mentioned, if you have gone through the results and the disclosures, it is related to the earlier issues which came out when the independent directors have resigned. And nothing new has come up anything after that. In that, I have nothing more to add because we have already submitted our disclosures both to the NSE and BSE and to our investors also we have informed. So once again, I can only give you assurance and confidence that the company is on the right track for the betterment of the company and it's doing very well.
It's really heartening that all the issues are old and now we can focus on business. On this, I would see that we need greater institutional participation, mutual funds, foreign investors also, and they can really come in if the issues are behind us and higher engagement with you. Like in this call also, I was expecting a lot of foreign funds and mutual funds, PMSs. Apparently, they are watching but they like the sector. I would suggest the management of both PTC India and PTC Financial have a higher engagement with institutional stakeholders so the company and all stakeholders will benefit in terms of appropriate valuation. And with this, I would suggest thanks and all the best to you. .
Thank you. Thank you, Manoj.
The next question is from the line of Mangesh Kulkarni from Almondz Global Securities.
Sir, this time, PFS has declared a dividend. So can we expect some interim dividend from parents also in the Q1 or Q2 going ahead?
Mangesh Ji, let me tell you that at this point of time, we have just come out with our annual results, and we have given you a dividend of 78% -- that is INR 7.87 per share. And that's something which we can mention right at this point of time. Anything what will be done in next quarter or so, we will be sharing with you at that appropriate time.
Because after 2 years, the PFS is back on the dividend lease. That's why we were expecting.
Right, right.
The next question is from the line of Vaibhav Gupta from Bowhead Investment Advisors. [Operator Instructions]
Sir, can you please share the overdues which is due beyond 45 days for financial year '21, '22 and '23?
Yes. I'll request Harish Ji, our Executive Director Commercial, to please reply.
So as far as, I mean, '23 is concerned, we have the total outstanding of INR 5,398. And as on 31st March, it was INR 6,739.
And sir, what are the overdues, like dues beyond 45 days? Because I am assuming that those must have reduced significantly and will be better able to understand...
Yes. As regards to the ED Commercial has already told you, the total debtor position as on the year-end as regard to the specific question of overdue debtors. So we always say that we always look at the debtors, the debtors minus creditors because that is the open position we take. So as far as the exposure -- the open exposure is concerned, more than 45 days is around only INR 363 crores as on 31st March. And out of that, we have already received INR 157 crores. So the net exposure as on date with regard to 31st March more than 45 days is around INR 206 crores. And that is just only from -- some amount from Bihar and some amount from J&K. That's all.
And sir, what was the similar number for September '22 and March '22, 45 days overdue?
This is the call -- I'm sorry, this is the call for March '23. But if you need the other quarter details, Varun will note it down and we'll give you the information separately.
Just one request, like I have followed up earlier as well, but I was not shared the number. So that's why I thought that this number if it is shared over this call, it will be for the betterment of the whole investment community. Everybody would be able to appreciate it.
Yes. You are right up to this point that because we are ready with the data for this quarter only, But we have noted your request, and I'll request Varun to share you with the relevant details.
[Operator Instructions] We take the next text question from the line of Rajesh Shah, an individual investor.
Sir, with better mix of long- and medium-term contracts as compared to short-term contracts, would the margin be improved in the current financial year?
Rajesh Ji, I mean, what I have just mentioned that last year, we made a serious effort and the margins have improved because we have improved the mix and low margin volumes we have ceded. So similar exercise we are doing for this year and prudent everyday we are trying to see that the company is engaged in the services or the volumes where we have a better margin. So that's a continuous effort. And what I can say at this point of time is these kind of continuous efforts may lead to some kind of better results. But at this point of time, it will not be appropriate that we should answer what is going to happen in the next quarter and beyond that.
The next text question is from Narendra Kotia from Robo Capital.
Can you give any outlook about the margins for the upcoming period?
Narendra Ji, I have just answered the same question. So I'll not repeat the same answer.
[Operator Instructions] We have another text question from the line of Anshuman Ashit from Ambit.
Sir, while the appointment for the post of CMD has been closed, the appointment process for the post of director is still open. Can you please share the update on the same and the time lines for the appointment? .
The process is on, and it will be done shortly. That's what I can say because these are some of the things which are with the NRC and the Board. So they are already -- they are in the process and it will be done at the appropriate time.
[Operator Instructions] So we have another text question from the line of Vaibhav Gupta from Bowhead Investment Advisers.
So what are the receivables beyond 6 months on March '23.
Yes. So as I've already explained that, we always see as an open exposure. So more than 6 months, the open exposure is around only -- just a minute, is only around INR 261 crores as on March '23. And out of that, we have already received INR 150 crores. So around INR 100 crores is outstanding as far as the open exposure is concerned more than 6 months.
The next text question is from Shubham Verma, an individual investor.
Any updates on stake sale of PTC Energy?
I just mentioned in my opening remarks that the process is already on. And by 30th of June, we will get the final bid from the potential investors.
Ladies and gentlemen, that would be our last question for today. I now hand the conference back to Dr. Rajib Kumar Mishra for closing comments. Thank you, and over to you, sir.
Thank you very much. And let me just -- before we close and call it a day, I once again thank all the investors and analysts, who attended today's investor call. And let me reassure you that the company is trying to consolidate its business. And we have started some of the innovative things, like we have an analytical lab, which is fully functional now with the company, and we are having predictive analytical tools which we are using for conducting our business, which is going to help this company to a tech savvy company in future. And there, we see a lot of future in the transition of the energy trading business. And we are hopeful that with the new innovative practices, what we have started a couple of years back, we are in a process that we are a company which is delivering our services better than others and we have a clear differentiator when we are reaching to our customers.
With these words, I thank you all once again that you have joined us for today's meet. And we will be coming with our updates as and when required for the development what we have discussed. Thank you very much.
Thank you very much. Ladies and gentlemen, on behalf of PTC India Limited, that concludes this conference call. Thank you all for joining us, and you may now disconnect your lines. Thank you.