Analyst Meet / AGM - Analyst Meet
Majority of the ordering for the capex over the next 3 to 3.5 years has already been completed and hence a cyclical slowdown in ordering is imminent
The company held its Analyst Meet on 4th Nov 17 and was addressed by key management of the company.
Key Highlights
As on Sep 17, the company has 142990 ckm of Transmission lines, 311100 MVA of substation capacities and Availability rate of about 99.83%.
Total capitalization in Sep 17 quarter stood at Rs 9974 crore as compared to Rs 6688 crore for Sep 16 quarter. Total capitalization for H1 FY 18 stood at Rs 13516 crore as compared to Rs 9150 crore. Total capex incurred by the company stood at Rs 11949 crore for H1 ended Sep 17 which is up by 10% on YoY basis.
In H1 FY 18, the company's ordering (tendering) of projects have gone down by 73% YoY and stood at Rs 4650 crore. However this is due to strong base effect of FY 17 being last year of 12th 5 year plan and 2 large HVDC orders being awarded in FY 17. As per the management, majority of the ordering for the capex over the next 3 to 3.5 years has already been completed and hence a cyclical slowdown in ordering is imminent. As PGCIL gets nominated for more transmission lines and wins more competitive bids for lines beyond FY20 (over the next 3 years), ordering could pick up once again.
In Sep 17 quarter the company made a wage hike provision of around Rs 12.90 crore as compared to Nil on YoY basis and Rs 86.20 crore on QoQ basis.
During Sep 17 quarter, the company has added about 2,260 ckm of transmission lines; four substations and aggregate transformation capacity of around 17,500 MVA.
Some of the major transmission elements commissioned during the period are Pole-II of Champa-Kurukshetra HVDC, Pole-III & Pole-IV of NER-Agra HVDC in addition to 765kV D/C Maheshwaram-Nizamabad, 400kV D/C Kishenpur-New Wanpoh, 400kV D/C Lara (NTPC)-Champa and 400kV Mauda-Betul & Betul-Khandwa transmission lines. The substations commissioned during the period are Maheshwaram, Alipurduar HVDC, Alipurduar Pooling Station and Betul.
Book value of the company as on Sep 17 stood at Rs 99.26 and Capital WIP stood at Rs 35033 crore as compared to Rs 38942 crore for Mar 17. Management aims to reduce the WIP further.
As on Oct 17, the company participated in 44 Tariff based competitive bidding (TBCB) projects and won 11 of them.
In consultancy business, the company has won 3 new projects in domestic markets with around 100 assignments in hand. Internationally, the company is working on with 14 assignments in countries like Nepal, Fiji, Bangladesh and CASA. The company is exploring opportunities in Brazil.
In Telecom sector, the company added 38 new clients in Sep 17 quarter.
The company now aims to leverage the existing transmission tower network for telecom. It has ample space for installing a telecom tower in same premises to that of transmission tower. Further there were some electricity that was wasted in transmission line, that wasted electricity will be captured by the telecom towers and thus overall it will be a win win situation for telecom business. At very minimum capex, the company can significantly create the necessary infrastructure for telecom tower business.
As on Sep 17, the company has ongoing projects of around Rs 88000 crore and new projects of around Rs 3000 crore and TBCB project of Rs 18000 crore as its total work in hand.
The total capex aimed for FY 18 is around Rs 25000 crore which can further increase as one move ahead in 13th 5 year plan. The company aims to capitalize around Rs 30000-32000 crore worth of assets.
Railway electrification is a huge opportunity wherein railways expect to spend around Rs 35000 crore for electrification of 33000 routes km by 2022. Lot of orders are expected from railways going forward and power grid will play a significant role in helping railways achieving the target.
Company has raised around Rs 2500 crore in debt market in FY 17 and there are no plans to raise any fresh equity in near future.
Overall, the growth momentum is expected to continue to remain in 13th 5 year plan as well.
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