Analyst Meet / AGM - Analyst Meet
The risk to loan book has reduced due to the company increasing its exposure to smaller and renewable projects
In interaction with Mr. Ashok Haldia CEO
On business front, management continues to expect loan book growth of around 25% for next 3 years. Renewable which account for around 48% of total loan book is expected to be around 60%. Thermal loan book which was 65% in FY'12 and is currently around 25% is expected to go down to around 10% in next 3 years. Non-power portfolio like coal mining, railroads, rail transportation, roads etc now accounts for around 10% of loan book which is expected to be around 20% in next 3 years.
As per the management, the solar exposure within the renewable is around 55%, wind is around 40% and rest will be hydro etc. Most the exposure is towards small projects and not large projects where the risk is higher. Management participates actively with the promoters in undertaking the whole project. The risk as per the management with these small and medium renewable projects is far lesser than the large projects in renewable space and the thermal based power plants.
Around 50% of total loan book of the company is towards projects which are up and running and are operational. Rest 50% are in various stages of pre operational phase. Thus management is confident of a lower overall risk in its loan book, given its active participation and smaller size of the projects.
Total assets that are under stressed currently is around Rs 1000 crore.
It's difficult to conclude the account as an NPA as lot of developments are happening on each and every project. A better clarity will emerge in Q1 FY'18.
Of the total GNPA of around Rs 460 crore, renewable account for around Rs 75 crore worth of NPA and rest majority are thermal power projects.
The company has received around Rs 130 crore on sale of stake in Indian Energy company. There is a possibility of higher provisions for some of the projects which the management believes provisions will be required.
Benefits of Uday scheme and increase in power price per unit by the SEBs will gradually be visible in the balance sheet of SEBs. As per the management, FY'18 will be an exciting year, as lot of problems of past have been addressed and now real execution is required to be seen at the ground.
The company has stopped fresh lending in the thermal power sector and there are no plans on this front. Management is very clear for its loan book for the next 2-3 years.
Bank borrowings for the company still accounts for around 50% of total borrowings and rest loans are from ECB's and from bonds. With overall rates coming down, cost of funds are expected to be lower in next 12-18 months during which the NIM is expected to improve, as company will be able to retain some benefits.
While there can be some more increase in GNPA ratios which is currently around 4.7% ie, around Rs 480 crore, in next 12-18 months time frame, the NNPA ratios are expected to come down going forward. Among the NPA accounts, the company expects resolution in some of the accounts in early FY2018.
Konaseema gas based power plants with exposure of around Rs 120 crore, Surana Thermal power project with exposure of around Rs 100 crore and around Rs 60 crore for Maharashtra wind power project is some of the major projects which are under severe stress and some provisions have been made. Better clarity will emerge in FY'18.
Powered by Capital Market - Live News