- Uptick in volume, but on lower margin: PTC's Q1FY13 adjusted PAT of Rs221mn was higher on account of a tolling project, which commenced during the quarter, contributing ~Rs90mn to the bottom line. Though volume posted an uptick to 6.5BUs (up 50% q-o-q), margin of 4.0 paise/kwh dipped from 4.7 paise/kwh in Q4FY12. Other income of Rs21mn (estimate nil) was booked on receiving payment of Rs1bn from TNEB, which aided profit. With no working capital loan and likely improvement in cash post the recovery of dues from TNEB/UPPCL, management expects earnings to improve going forward.
- Toll projects to contribute significantly to FY13 profit: The toll project of Simhapuri (first 150MW unit achieved CoD in May) sold 122MUs on merchant at average realisation of Rs6/kwh over exchanges in the southern region and contributed Rs125mn PBT for the quarter. With the second unit also achieving CoD, 200MW will be operational during the balance quarters. PTC has entered into annual off take agreement (till May 2013). Further, the Meenaxi project is also on track to be commissioned by Q3FY12 end. While this will improve trading volumes, sale of tolling power should contribute significantly to FY13 profit.
Outlook and valuations: Edelweiss have assumed only 10‐15% increase in trading volumes for the year due to tough business environment for generation /distribution companies. However, contribution from tolling projects should aid FY13 profit. Earnings are raised up 57% and 23% for FY13E and FY14E, respectively, on factoring the tolling income. Maintain buy
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