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Analyst Meet / AGM - Analyst Meet

Assets capitalization ratio will continue to improve

Power Grid Corporation

07-Feb-2014, 06:33
Power Grid Corporation held its analyst meet on 6^th Feb'14, which was addressed by Mr. P Nayak, CMD

Key highlights

For Q3 FY'14, Power Grid reported 10% increase in net sales to Rs 3683.3 crore on y.o.y basis while PAT was down by 7% to Rs 1042.04 crore. Lower execution, together with higher depreciation and interest costs were primarily responsible for the drop in PAT. Transmission income grew by 7% y.o.y to Rs 3470 crore, consultancy income services was more or less flat at around Rs 63 crore, while sale of products stood at Rs 86 crore as compared to Nil for Q3 FY'14), while telecom income grew by around 12% to Rs 65 crore.

As on Dec'13, Power Grid owns and operates transmission network of about 105086 ckm of transmission lines and 178 EHVAC and HVDC substations having transformation capacity of more than 190768 MVA with availability of its transmission network of more than 99.9% and it wheels about 50% of total power generated in the country.

Company's average monthly billing is about Rs 1156 crore and its realization is almost 99.4%. As on date, the outstanding is equivalent to less than 11 day's billing. As on date outstanding of Rs 48 crore is held up due to court cases and the company already has received the order in its favor and same will be cleared in installments.

For the nine months ended Dec'13, the company has incurred capex of about Rs 16482 crore and has capitalized about Rs 9552 crore worth of assets. Till Jan'14, while capex incurred is around Rs 18500 crore, about Rs 13000 crore worth of assets is capitalized. Thus better execution will take place in Q4. Management's continuous focus is to reduce the gap between the capex incurred and assets being capitalized. About 45% of the existing asset base of about Rs 97107 crore is capitalized in past 24 months.

In terms of consultancy business, 15 new orders came in of which 13 are government orders and rests are private. About Rs 15000 crore worth of project orders are under execution at various stages. Internationally, in consultancy business, company received 1 new order and increased its reach to 14 countries. Total of about 18 assignments are under execution in international market as well.

Telecom business has added 7 new clients, 2 governments and 5 private. Optic Fibre Network roll out started in AP, HP, Jharkhand and Odisha. Visibility continues to remain strong in this segment.

As per the management, capex target for every year in 12^th 5 year plan is increased from Rs 20000 crore to Rs 22500 crore. For FY'14, the investment program planned is of Rs 22150 crore, for FY'15 it is about Rs 22450 crore, for FY'16 around Rs 22500 crore and for FY'17 it is around Rs 22550 crore. For the overall 12^th 5 year plan, the projects approved worth stands around Rs 110000 crore.

In FY'14, so far about Rs 5321 crore raised on fresh issue of shares, about Rs 3966 crore and Rs 3126 crore in form of bonds @8.7% and 7.9% respectively.