PTC India

PTC India reported robust financial results for Q3 and 9M FY25. Standalone Q3 volume increased by 29% to 19.2 billion units, driving a 66% rise in operational income to Rs 182 crore and a 76% increase in PAT to Rs 111 crore. For the nine-month period, standalone PAT grew 17% to Rs 333 crore. Consolidated figures also showed strong growth, with Q3 PAT up 87% to Rs 181 crore and 9M PAT up 37% to Rs 604 crore. A significant highlight was the auditors dropping all qualifications at the group level, resulting in a total clean audit report.

The definitive agreement for the sale of PTC Energy Limited (PEL) to ONGC Green Limited, signed on September 13, 2024, is on track for closure. Management confirmed that the timeline for completing the transaction has been mutually extended to February 28, 2025. They expressed high confidence that the deal would be closed by this revised deadline, with all legal and administrative conditions precedent being addressed.

PTC India demonstrated effective receivables management during the quarter. Outstanding dues from the state of J&K were significantly reduced from approximately Rs 1200 crore to less than Rs 700 crore, now considered within manageable limits. Similarly, Bangladesh receivables decreased by Rs 200 crore in Q3, ending the quarter at Rs 693 crore, down from Rs 859 crore in the previous quarter. The company continues to supply power to Bangladesh.

The company's HPX business reported Q3 FY25 revenue of Rs 6.23 crore and PAT of Rs 1.28 crore. Management emphasized that the absence of market coupling remains a constraint, as it limits HPX's ability to attract volumes from collective segments, which tend to concentrate with leading exchanges globally. PTC India is actively advocating for market coupling, viewing it as a significant opportunity to enhance competition and improve services, thereby driving substantial growth for its HPX investment.

While overall volumes grew, margins experienced pressure due to the increasing proportion of short-term trades. Q3 FY25 short-term trade margin was 0.75 paisa per unit, compared to 2.15 paisa for medium-term and 7.7 paisa for long-term trades. Management noted that domestic long-term trading is currently restricted for traders by regulation, necessitating a focus on customizing offerings for medium and short-term segments to mitigate margin pressure and grow volumes.

Regarding the Sikkim Urja project, which faced damage from flash floods, management clarified that PTC India does not intend to invest any more funds into its repairs or reconstruction. They stated that the revival of the project depends on numerous factors, including clearances and resolution of engineering and design issues, which are the responsibility of the developer in control of the project.

PTC India maintains a strong financial position with a net cash position of Rs 516 crore as of December 31, 2024. The gross cash stood at Rs 564 crore. The company reported very minimal bank debt of Rs 48 crore, primarily for working capital, indicating a robust balance sheet with no long-term debt.

Management projects a firm power demand growth of 6% to 8% per annum, potentially rising further due to expected repairs and adverse weather conditions. The government's focus on renewable energy, including storage systems and pump storage, is expected to expand the supply basket. India envisages a 74 GW capacity requirement in storage solutions to better integrate renewable energy into the grid, which PTC India views as a positive development for the sector.