PTC India Financial Services Limited (533344) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q4 and FY '24 Earnings Conference Call of PTC India Financial Services Limited. [Operator Instructions] Please note that this conference is being recorded. Today, we are having management team led by CA Mahendra Lodha, Director of Finance and CFO, MD and CEO, additional charge; who is accompanied by Mr. S. Siva Kumar, ED Credit; and Mr. Kalur Srinivas, ED Monitoring. I now hand the conference over to Mr. CA Mahendra Lodha, Director of Finance and CFO, MD and CEO, additional charge of the company. Thank you, and over to you, sir.

Yes. Good afternoon, all our esteemed investors. So we have already uploaded a detailed presentation on the website, and I will update the brief highlights of the financials. So we have already published our financial results for the Q4 2024 as well as the financial year 2024. So just to mention, during the financial year 2024, we have achieved total revenue of INR 776.28 crores and against that we achieved PAT of INR 160.75 crores. Our capital adequacy ratio for financial year '24 is 43.07%. Net interest margin for financial year '24 is 4.82%. Debt-to-equity ratio for the financial year 2024 is 1.54. Total loan asset book as on 31st March 2024 is INR 5,395 crores we have made disbursement during financial year '24 amounting to INR 555 crores. So if you compare -- to brief snapshot, I will give for the yearly financials, as against the total revenue of INR 797.08 crores in financial year '23, we achieved total revenue of INR 776.28 crore in financial year '24. PBT was last year -- in financial year '23 was INR 232.37 crores, against that for financial year '24, it was INR 175.82 crores. And PAT for the financial year '23 was INR 215.98 crores against that PAT for -- sorry, sorry, I mean, PAT for financial year 2024 is INR 160.75 crores. Yield on earning portfolio for financial year '23 was 10.51% against this yield on earning portfolio for financial year '24 is 11.38%. Capital adequacy for financial year '23 was 33.05% and for financial year '24 , it is 43.07%. Return on assets for financial year 2023 was 2.05% as against that return on assets for financial year 2024 was 2.27%. Gross net NPA for financial year 2023 was INR 716 crores against that gross NPA for financial year 2024 was INR 489 crores against that. Net NPA for financial year 2023 was INR 306 crores against that net NPA for financial year 2024 was INR 142 crores. As far as net interest margin is concerned, for financial year 2023, it was 4.23% as against that for financial year 2024, it is 4.82%. If you see that quarter result for the financial year 2024 Q4, our PBT was INR 19.27 crores and PAT was INR 13.85 crores. And yield on earning portfolio for the quarter 3 financial year '24 was 11.37% against the yield on earning portfolio for Q4 for financial year '24 is 11.91%. Capital adequacy ratio for Q3 financial year '24 was 44.45%, against that capital adequacy for Q4 for financial year '24, it was 43.07%. As far as return on assets is concerned, comparable to previous quarters, during previous quarter Q3 financial year '24, it was 2.69% and now for Q4 it is 3.83%. Net interest margin for Q3 financial year '24 was 4.92% and it is same for the Q4 financial year '24, 4.92%. Few other things I would like to highlight. So during the financial year 2024, we have sanctioned loan worth of INR 525 crores and then we have disbursed loan worth of INR 585 crores and outstanding credit as at the end of the financial year '24, it was INR 5,396 crores and capital adequacy ratio was 43.07%. Key operational indicators are net interest income for financial year 2023, it was INR 334.66 crores against that net interest income for financial year '24 was INR 340.59 crores. Yield on earning loan was for financial year '23, 10.51% against that yield on earning loan for financial year '24 it was 11.38%. Cost of borrowed funds have increased based on that market scenario. It was 10.51% in financial year '23 and the yield earning loan was 11.38%. Cost of borrowed fund for financial year '23, it was 7.68% as against that now the cost of borrowed funds for financial year '24 it is 8.70%. Interest spread for financial year '23, it was 2.83% and now for financial year '24, interest spread is 2.68%. Net interest margin has increased from 4.23% to 4.82% in financial year '24 as compared to '23. Earnings per share for financial year '23, it was INR 2.74, and now for financial year '24 it is INR 2.50 per share. Cost-to-income ratio, it was 13.62% for financial year '23 and now for financial year '24, it is 12.62%. Debt-to-equity ratio for financial '23, it was 2.09 and against debt equity ratio for financial year '24 is 1.54. Return on net worth, it was 7.47% in financial '23, now it is 6.45% in financial year '24. Return on asset, it was 2.05% in financial year '23 as against in financial year '24, it is 2.27%. So total result overview for financial year '24 is interest income for financial year '23 was INR 766.57 crores against that income -- interest income for financial year '24 is INR 750.58 crores. And total income for financial year '23, it was INR 797.08 crores against that for financial year '24, it is INR 776.28 crores. Interest and financial charges during financial year '23, it was INR 432.83 crores against that this year for financial year '24, interest and financial charges are INR 411.07 crores. As far as provisions and contingencies are concerned, it was INR 80.69 crores in financial '23 against that now it is INR 87.57 crores in financial year '24. Other expense were -- in financial year '23 it was INR 51.19 crores against that now it is INR 61.66 crores. Total expenses for financial year '23 it was INR 564.71 crores and in financial year 2024, which is INR 560.30 crores. Profit before tax for financial year 2023 it was INR 232.37 crores and financial year 2024, profit before tax was INR 215.98 crores. Tax expenses, including deferred tax, it was INR 56.56 crores for financial year '23 and for financial year '24, it is INR 55.23 crores. Profit after tax was INR 175.81 crore in financial '23 and now for financial year '24, it is -- profit after tax is INR 160.75 crores. So during the financial year, we have resolved few NPA accounts and our NPA amount has also reduced. So our Executive Director, Mr. Kalur is here, so he will just highlight in detail about whatever NPAs we have reduced and we have resolved during this year. So over to Mr. Kalur.

I think in the earlier investor conferences, this has been discussed in detail the progress that PFS has made been in resolving some EWS accounts as well as some NPA accounts. In the last quarter, Asian Hotels was resolved, although it was a small ticket valuation, but the principal amount is fully recovered. And we are in the process of resolving a few -- couple of larger ticket transactions in the current financial year. And as and when there is sufficient progress, and with -- after necessary internal approvals and all that, same will be communicated in due course.

Yes. So our Executive Director, Credit, is also with us. So he will highlight about the proposals in hand and we are moving ahead with that further sanctions and disbursements in coming times.

Yes. Good afternoon, everyone. We have sanctioned around INR 525 crores during this year, during FY '24, and disbursed INR 585 crores. And we have in pipeline around as a INR 500 crores disbursement, which has been sanctioned -- that proposal has been sanctioned, and we are in the process of making the disbursement after compliance with the pre-disbursement conditions. And also, we have a healthy pipeline in the -- proposals in the pipeline. And we expect the sanctions would go up this year, but we've been all along cautious so that we will have our resources, which are available, which commensurate with our sanctions so that we meet our commitments. Thank you.

Yes. So we have with us our Treasury Head, Mr. Abhinav Goyal, as well as well as our Finance Head, Mr. Sanjay Rustagi. So as far as the liquidity is concerned, company is having adequate liquidity in the form of HQLA and liquid assets and undrawn credit limits to meet the contingency. So I will -- so hand over to Mr. Abhinav to just highlight about the liquidity position and the current position.

Yes. So very good afternoon to all. I'm Abhinav this side. So I refer to Slide #15 of our presentation, which reflect the comfort in terms of liquidity we are having, and it's reflecting that around INR 1,324 crores we were having surplus cash as on April 2024, which is sufficient enough to meet all our liability in near future as well as the additional disbursement requirement, which we would be having. Now in terms of fresh borrowing. We have taken one additional loan, which is a long-term loan from Indian Overseas Bank, out of which 50% has been drawn and 50% is pending for withdrawal. So in time to come, when the disbursal will start happening, we'll take withdrawal of that. And in addition to that, we are in discussion with few lenders for having further credit lines. Over to you, MD, sir.

Yes. So I guess that is all initial introduction from management. We may open for a question-and-answer session.

[Operator Instructions] We have the first question from the line of Monika Arora from Sharegiant Wealth Advisors.

If you look at your slide in the corporate loan, in that contribution from others has declined during the quarter. So can you help us understand what could be the possible reason for this?

Which slide number did you refer to?

This is a slide on the corporate loan.

You're referring to other sectors, right?

Yes.

Yes. It could -- I think some of the reason would be some prepayments that took place during the last quarter because of which the exposure in -- related to others would have declined.

Okay. And what is the comfortable debt-to-equity ratio that you were looking at majorly for FY '25?

Yes, yes. So I think that -- so we are working, team is working for the further sanctions and disbursements. And for that purpose, it will go slightly higher because we are having sufficient capital adequacy ratio, so based on that, we are working for that. .

So [ Monika ], see, currently, if you look at our portfolio, we are declining -- having a declining trend. But now we are targeting to have a good amount of disbursement in time to come. So when the disbursement will start happening, our debt-to-equity ratio will go up slightly in line with the plan we are having. So currently, it is lesser than 2. We -- our target is that it should be more than 3 in time to come. That is a clear target we are having.

[Operator Instructions] We'll take the next question from the line of [ Aniket Parab ], an Individual Investor.

Yes. So my first question is for FY '25, how do you see the sector [indiscernible]?

So sector is performing fantastically. And with the return of government, we are quite hopeful that there would be a lot of focus at investment in the sector.

Okay. And so just a follow-up on the savings. In the presentation I can see renewable segment has declined. So what could be the reason for the same?

That, as mentioned by ED sir, that part of our portfolio has been repaid over a period of time. So that is the major reason it's been declined -- one of the major reasons.

Okay. Got it. And how do you see this segment going ahead?

So I think I replied your first question, which is having an answer. So fantastically, we are looking huge opportunities are there in this segment with the focus of the government, there is a potential, a lot of potential, I should say. And with current year, I guess, you must have gone through newspaper where Delhi is very hot; Bangalore, this water problem. So now the shift, not only in India globally is to renewal segment and to have a recycle of the resources. So this is a segment where we are very active. So overall, if -- I say that we are very much optimistic about the segment.

Perfect. Got it. And one last question is that regarding [Technical Difficulty].

Your audio is not clear, sir. Can you please repeat and use your handset?

Yes. I wanted to know the NIM guidance for FY '25?

NIM guidance, sir, would you like to -- [ Aniket ], just one sec. I think net interest margin may likely to slightly reduce in this financial year because depending upon the market scenario as well as the increased cost of borrowed funds. So we're already working on that how to optimize it.

Yes. So Mr. [ Aniket ], there are 2 aspect of looking at NIM. One is in percentage terms, so as rightly mentioned by MD sir that it may get reduced in time to come to some extent. But at the same time, it will get compensated with the additional business, which we are planning to do. So if you look at percentage term, there might be some decline in what the ratio is prevailing as of now. But if you look in absolute terms, I mean, in value terms, there would be an increase -- upward increase. So that will be the contribution towards the profitability of the company.

The next question is from the line of [ Asath Kumar ], an individual investor.

Can you provide any update on CEO appointment?

So the same is in the process. The Board is already working on that for appointment of formal MD and CEO and as soon as it is finalized, then it will be updated on the stock exchange as well as the other regulators.

I mean any expected time line like to the company, we have been very long investors, so I just wanted to know how long it's going to take?

I think soon, Board and company is likely to announce as soon as all the formalities are done. So it's already at an advanced stage.

Okay. And my other question was like when will be the next fundraising for the company? Like I mean is it after the appointment of CEO or the current management is going to raise the fund for disbursement?

No, no. Fund raising is already in process. We are already following up with all these banks, even if -- as we mentioned and Abhinav also mentioned, in the March, and we already got one sanction from one of the bank. And we have drawn that amount and parallelly, we are working with other banks also for the fundraising. So it's already on. It is not like that we will start later on. We have already started the process.

[Operator Instructions] The next question is from the line of [ Channa Malu Gowdi ], an Individual Investor.

[Technical Difficulty].

Sir, your voice is breaking. No, sir, you're not audible.

Am I audible now?

Yes.

My question is to Mr. Lodha, sir. Sir, you previously few months back, you resigned from your post and again withdrawn your resignation, it is a matter of the credibility of you and the company. So why that decision was, is my question.

Yes, because of health reason at that point of time, I resigned and then later on in the interest of the company I withdrawn that resignation. So right now, company is in the process of appointment of formal MD and CEO, and that shortly company will announce as soon as it is finalized and then after following that regulatory guideline.

One more question, sir. What amount do you got sanctioned from the bank you have for fresh credit line, sir, in the Indian Overseas Bank?

So INR 100 crores already got sanctioned in March from IOB. And parallelly, we are working with other banks also, and we are following up, the process is already on for further process.

INR 100 crores is very less amount, sir, the loan book has already came down to INR 5,000 crores like this and in previous con-call only you said in fourth quarter, we will reach to INR 9,000 crores, but still it is hovering there in the INR 5,000 crores.

Yes. So actually, we were working for the fund raising since long. And finally, we got succeeded to get at least from one banker at this point of time. And on the similar lines, we are working for further fund raising.

So what's your target for this financial year?

We are looking higher amount like in the range of INR 1,000 crores to INR 2,000 crores minimum.

Okay. So next INR 10,000 crores like this you will achieve?

Sorry?

For this financial year, end of this financial year, at least loan book will reach at least INR 10,000 crores?

No. We will increase from this level. We are trying to -- our team is already working because earlier means a lot of challenge was there due to old matters, but team is working hard, and then we are expecting to increase that loan book.

[Operator Instructions] The next question is from the line of [ Rajesh Iyer ], an Individual Investor.

Congratulations for the great set of numbers. I just had a couple of questions. So can you please help me with the FY '25 outlook and in terms of total income and PAT, like what -- how much growth do we expect coming next year?

Yes. So whole team of PFS is working to improve the performance on every front, and we are expecting that result better as compared to '24, means we would like to achieve.

But would you like to give any growth percent guidance.

We are working. We are working on all these parameters and to improve the figures as well as the reserve for '25.

Okay. And I was also going through the investor presentation and I saw that the transmission contribution has been decreasing over the quarter. So if you could just highlight the reason and what is the outlook on the sector.

I think it is on account of some frequent -- I will hand over to Mr. Kalur to mention it in detail. Even [indiscernible] Siva Kumar.

Yes. See, transmission sector is one of the safest in the power chain. And we had a slight decrease because one of the operating asset has got prepaid because they moved to the InViT model. So as such, it is a very safe sector, and we are looking for further opportunities. And we have a couple of them, and we are examining it and hope we will get sanctioned and get it. Renewable sector, that is a good sector.

And by when can we see a recovery in this?

We are working on that, and we have a couple of projects, we expect the sanctions would come through as early as possible, maybe within a couple of months.

[Operator Instructions] The next question is from the line of [ Aniket Parab ], an individual investor.

I would like to ask that can you please throw some light on the appointment of new MD as you were searching for it?

Yes. So the process for appointment of formal MD and CEO is already on, and it's at an advanced stage. Board has already taken initiative for the same and after complying that regulatory formalities, Board will shortly announce that as per the regulatory requirement.

[Operator Instructions] The next question is from the line of [ Raess Pasha ], an Individual Investor.

Yes, I could see the Board meeting got postponed a few times later in -- while in the presentation, I mean, can -- is there any right reason for that? Because I could see it got postponed for 2 times.

Yes, we were supposed to announce our results early because we have already finalized the date, but by the time some working was there and the matter was discussed with the Audit Committee and Board and that's why it got postponed. And then finally, we declared the results on 20th well before -- 30th May, well within the timeline.

[Operator Instructions] Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir.

Yes. So once again, thanks for our esteemed investors to be present here for the investors -- investor presentation. So thanks once again.

Thank you, members of the management. Ladies and gentlemen, on behalf of PTC India Financial Services Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.