PTC India Faces Sharp Decline As Q4 Net Profit Plunges By 17% To Rs. 129 Crore

PTC India Ltd, a supplier of power trading solutions, reported a 17.67% drop in consolidated net profit to Rs 129.34 crore in the March quarter. It is owed to higher expenses.

According to a regulatory filing, the company’s net profit for the January-March quarter of FY22 was Rs 157.11 crore. However, the company’s overall income increased to Rs 3,643.02 crores from Rs 3,107.04 crores in the previous quarter.

Expenses increased to Rs 3,471.95 crores from Rs 2,890.57 crore the previous year. In an additional statement, Rajib K Mishra stated that the board of directors has proposed a dividend of Rs 7.8 per equity share for FY23, emphasizing PTC’s business model and prospects.

“Improvement in operations resulted in remarkable resilience in PTC Group’s consolidated results in a tumultuous year. PFS provided Rs 175.81 crore to the group’s profitability in FY23. PTC Energy Limited recorded a profit after tax of Rs 13.88 crore.”

In Q4FY23, the organization’s power trading volumes declined 5% to 16,390 MU from 17,329 MU in Q4FY22.

Furthermore, the Indian Government has mandated PTC to sell power to Bhutan, Nepal, and Bangladesh. The state-owned company reported an 8.07% drop in its overall net profit during the fiscal year (FY23) to 507.15 crores on Saturday.

The company made an overall profit of 551.67 crore in FY22. PTC India’s earnings from business operations in the previous fiscal year were 15,492.05 crore.

It is a 4.8% decrease from the previous year’s revenue of 16,279.25 crore. Trading volumes fell by 19% in fiscal year 23 to 70,610 MU as opposed to 87,515 (MU) in FY22. It is owed to a 15.1 BU fall in small margin power exchange trade volumes.

“We are happy to present our financial outcomes for Q4FY23 and FY23, both on a standalone and consolidated basis,” stated Mishra, Chairman & MD of the company. “The board of management approved a dividend of 7.8 cents per share of equity for FY23.”

“PTC India’s FY23 was the year of consolidation, with strategic decisions made, volumes ceded to minimize detrimental impact on the cost of capital, and the business model reoriented.”

As part of its business strategy, PTC India prioritized core profits above volumes throughout the year, he said. In a statement, the company stated that its subsidiaries have achieved a turnaround in company operations with demonstrated profitability.

It has resulted in PTC Group’s consolidated results, demonstrating substantial resilience in a tumultuous year. PFS contributed 175.81 crores to the group’s profitability, while PTC Energy Limited posted a profit after tax of 13.88 crores for FY23

PTC India shares finished at 93.47 across the BSE on Friday, down 0.40% from the previous close. In March 2023, PTC India’s net sales were Rs 3,380.59 crore, up 19.41% from Rs 2,831.12 crore in March 2022.

SEBI and RoC have joined the Reserve Bank of India (RBI) in investigating claims of wrongdoing at PTC India Financial Services (PFS).

In the explanations accompanying the company’s yearly outcomes, Lodha & Co stated that in the quarter that ended in March, the company obtained four show-cause notices (SCNs).

Most were issued by the RoC and one from Sebi on problems with corporate governance raised by its directors who quit on January 19, 2022, as well as on December 2, 2022. The Sebi notices were issued to PFS non-exec chairman Rajib Kumar Mishra along with CEO Pawan Singh.

They both have been under regulatory scrutiny, after the voluntary departures of multiple other directors in both PFS and parent PTC.

They cited problems with corporate governance, mismanagement, evergreening of loans, and management’s tweaking of critical sanction terms without seeking prior approval from the PFS board.

“The details of the Sebi notification are unknown. However, one thing is certain, Mishra and Singh will no longer be able to hide under denials. They must come clean and explain their positions of power in front of regulators,” said an individual acquainted with the company’s operations.

This is the first time a regulatory notice is mentioned in the company’s official documentation. However, its auditors did not provide any information on the notices that were issued.

The auditor’s notes stated that SEBI, stock markets, the RBI, and the RoC had been in contact about this situation.

It also refers to an RBI notice dated January 6 that the company received. A report stated in January that the RBI had written to PFS, asking why no action should be taken towards the management for apparent regulatory violations by independent directors.

The company has categorically refuted all charges. It claimed that the forensic audit assessment analyzed by consultant firm EY identified no potential monetary effects or evidence of suspected fraud.

The Indian Union government was contemplating its strategy to leave the tainted power trading firm PTC India using state-owned enterprises last month.

In 2022, the power ministry accepted an application for stake sale by four PSUs. They were NTPC, NHPC, Power Grid Corp., and PFC, which owns 16.22% of the listed firm.

The PSUs appointed ICICI Securities as a merchant banker for the deal that was proposed. The four promoters each own 4.05% of the listed firm.

Despite the government’s desire to exit the company following allegations of corporate mismanagement in PTC and its affiliated company PFS, the reconsideration has been motivated by the idea that the government’s stake provides trust to the firm and its NBFC arm.

Thus it keeps them viable. The Centre’s participation will also enable the NBFC to borrow at lower interest rates, thereby benefiting India’s energy sector.

“As a result, the stake sale may have an impact on PTC’s viability. That got us wondering. We’re considering it,” RK Singh said. Initially, only NTPC wanted to sell its stake in the company. ICICI Securities was designated as the lender.

Following the relocation, the power ministry proposed that all four promoters quit the company together. Following the directive, the four state-owned enterprises opted to quit in one go to maximize value.

In its FY22 yearly report, NTPC stated that selling its stake in PTC India required the approval of the Centre because the firm was founded by a government decree. It was reported in December that all four promoter PSUs intend to sell their shares in PTC India.

According to sources, Nasdaq-listed ReNew, Greenko, and Torrent Power were among the companies bidding for the promoter share in the company.

The latest drive for a share sale was significant since it coincided with a flurry of departures from the PTC management.

The intentions to sell holdings in state-run enterprises coincided with the resignation of numerous independent directors from PTC India’s board.

They accused the organization and its subsidiary PFS of mismanagement and failures in corporate governance. Four independent directors resigned from the board late last year, Preeti Saran, S.S. Mundra, Sushama Nath, and Jayant Gokhale.

Nath stated in her letter of resignation that governance standards in PTC had deteriorated since the troubles in its affiliate PFS were exposed earlier this year.

Mundra, the chairman of the BSE and a former deputy governor of the RBI claimed that a pattern has emerged in PTC India in which most board meetings are held at short notice and agenda documents are sent at an even tighter deadline to the conference.

Proofread & Published By Naveenika Chauhan