Liquidity crunch at NBFCs has led to a slowdown in disbursement: Deepak Amitabh, PTC India

Deepak Amitabh, Chairman and Managing Director, PTC India Limited, spoke about long-term contracts for H2FY19,  non-core assets and financials related to power sector among others during an interview with Swati Khandelwal, Zee Business. Edited Excerpts: 

Q: Let us know about the average spread of PTC India in the quarter and the ongoing trend? 
A: There was a volume growth of more than 30 per cent in Q2FY19 and there was a profitability in PAT. In addition, there was an improvement in total income and operating margins of the company. But one should have our ideal mix of 50-50% in their mind that has been designed to get desirable results and balance it. The mix includes of short-term market, a place with low margins, and long & medium term market, a place that posts decent margins. The short-term market, which grew by 55% in the Q2Fy19, has managed to supersede the long and mid-term market, which was able to grow by 45%. Growth in short-term margins leads to volatility in the market while the long and short-term margins are used to maintain sustainable margins. 

Q: What is your outlook on long-term contracts for H2FY19?
A: We will continue to grow in H2FY19. Especially, the PPA and PSA of mid-term 1900 MW, which will be operationalised in Q4, will have an impact in the quarter. In fact, this PPA and PSA will continue to have its impact on results for the next two years. Similarly, we also performed the PPA and PSA work for 1050 MW wind energy of long terms - 400 MW of which is operational and the remaining 500-600MW will be operationalised in Q4 - will also have an impact on the second half of the year. In fact, the growth pattern is going to be tilted towards long and medium terms for in Q4 and next financial year. 

Q: What is an update on your non-core assets?
A: We have invested in PTC financial services and PTC Energy limited. We hold 65% in PTC financial and 100% in PTC Energy. Our view is that there is no need to provide money to them. In fact, we have started a capital raising exercise for PTC energy and feel that we will be able to speak about the same in next 2-3 months from now. 
Besides, we have also completed our provisioning work on them and will be in a position to monetise things in next 2-3 years from our investments. We have sufficient working capital to continue doing the increased trading volume that is being utilised for growth in the next 2-3 years. 

Q: Name the segment in terms of stability for financing between Oil & Gas, Power, Coal Mine and ports where PTC India will bet?
A: See, PTC financial services, a subsidiary of PTC India, is the company that provides loans to us and I am the chairperson of the company. There will be a growth in transmission in the power sector and we will also grow in the renewable segment. In addition, we will also grow in the port and road segment. 

Q: There is a concern related to the power sector. What is your outlook on it and also let us know about the financials of the power sector?
A: The liquidity crunch at NBFCs has led to a slowdown in disbursement. In addition, NBFCs and banks are going through a consolidation phase and I feel that growth will start picking up from next year.