PTC India’s Net Up by 130%, Margins Up Slightly

PTC India, in its third quarter earnings, has reported a good set of numbers. The company has doubled its net profit to Rs 21.8 crore. In the corresponding quarter previous fiscal, it had reported a net profit of Rs 9.5 crore. The company has also reported 41% growth in its topline to Rs 1877 crore.

The trading volumes during the quarter were up by 28% to 5871 million units. It has also reported a total of 9.75% rise in its realisations, which stood at Rs 3.20 per unit in this quarter against Rs 2.91 a year earlier and Rs 2.96 a quarter ago.

A major boost for the company during the quarter was its tolling business which has commissioned its operation in the first quarter of the current fiscal. In its tolling business, it provides coal to the power companies and sells the power generated. Tolling volumes during the quarter were at 226 million units.

The company has reported a marginal increase in its EBITDA margins to 1.6%. As per cent of sales, its power purchase cost came down by more than 500 basis points, as the company has started the tolling business. The employee cost has also decreased by 12% as the company said some employees have left the organisation.

During the conference call, the management said that it is now having a PPA mix with 50% coming from short-term sale and the remaining 50% coming from the long-term sale. During the quarter, it has signed PPAs for a total capacity of 14,402 MW.

The management seemed very optimistic on the debt restructuring of the State electricity boards. The company has a total receivables of Rs 2800 crore with different SEBs, of which about Rs 350-400 crore are with the Tamil Nadu SEB and Rs 1200 crore are with the Uttar Pradesh SEB. The management said that it will recover the Tamil Nadu SEB dues soon but the Uttar Pradesh SEB dues will take a slightly longer period. It also said that excluding these two major dues, its receivable cycle is of three days.

The company, going ahead, is expecting its volume growth to continue. The results are really optimistic and have created a positive sentiment on the stock. There are a very few stocks in the power sector which are doing well and PTC India is a one of them. We remain positive on the company and would advise investors to enter the stock at the current price with a long-term perspective.