PTC India to cross 50 bn units of electricity sale by 2017-18, says top executive

The asset size of its financial services arm PFS to be Rs 10,000 cr plus in current fiscal

PTC India is looking to increase its volumes in India's emerging power market. Its subsidiary PTC Financial Services (PFS) hopes to consolidate its position in the renewable energy (RE) as well as infrastructure sector. PTC India chairman and managing director Deepak Amitabh explains the company's growth strategy in an interview to Sanjay Jog.
 
Q: What will be the company's turnover for current fiscal?

A: During 2013-14, PTC India traded 37 billion units and it rose to 42 billion units in 2015-16. So similar growth has to be there in 2016-17. However, by 2017-18 we should be crossing 50 billion units.

During the quarter ended June 30 this year, the company reported 13% growth in standalone net profit at Rs 56.45 crore against net profit of Rs 49.75 crore in the year-ago period. The revenues increased by 14% to Rs 3,644.33 crore in April-June this fiscal from Rs 3198.91 crore in the same quarter in 2015-16. Power volumes rose by 19% to 12,221 million units (MUs) from 10,265 MUs.

The company continues to witness healthy growth in the power trading volumes. The increase has been on the strength of our balanced portfolio developed over the years, with long term contracts showing growth along with the exchange traded volumes. We have maintained our leadership position and would continue in our mission for the development of a vibrant power market in the country.

Q: What is the status of your arm PTC India Financial Services (PFS)?

A: It is in a very sweet spot. We moved to financing renewable energy (RE) quite early way back in 2011. We made a structural shift. Most of the sanctions are into RE space. We have also diversified a bit into infrastructure. We have done some roads, ports, mining development projects. So we are increasing the space (of our operations).
But we believe that it should cross the Rs 10,000 crore asset size during 2016-17 of which majority will be into RE and also into the diversified sectors. PTC India Financial Services will like to participate in such infrastructure projects if more and more solutions are pushed by the government and our credit risk is minimized.

Q: What is your take on government's resolve to boost the development of power market in India?

A: The government earlier was encouraging only long term market. Now with the challenges suppliers faced in the thermal as well as buyers, the whole market is now shifting towards medium term. Long term will always be there as lenders are very much concerned. So for the satisfaction of lenders the long term market has to continue but the duration of that 25-30 years may undergo changes that is where the challenges for financiers also. So the whole shift is to the medium term market from the long term market. The Centre is also putting in place the supportive policies.

The government has come out with a policy for medium term. It had ruled out traders in the beginning but later on the government has included them in the medium term. The government is also looking at medium term coal supply on the lines of long term coal supply. There is some difference of opinion between the ministries of coal and power but I am sure that it will get sorted out very soon. The ministry of power in particular is supporting coal supply for medium term also.  So once these things get supported, the medium-term market is going to kick in strongly.

Q: What is your experience about DEEP (Discovery of Efficient Electricity Price) e-Bidding & e-Reverse Auction portal 
for procurement of short term power by DISCOMs?

A: DEEP is not hampering a company like PTC India. We have also told our investors.  We today contribute 40% business of exchange. DEEP has come out with three-month and six-month auction and we have been (a) participant and winning bids. Even (for) long-term, we are winning bids. The focus of the current government is that the consumers should get the cheapest power. The bidding process was going for short-term power in 2011-12 as per the guidelines.  But the process was manual and now the government has produced an electronic platform.  The participants are going to be the generators, the buyers and traders remain.