Rec Limited · NSE:RECLTD
Rec — H1 FY2018 Earnings Presentation
43 slides from Rec's earnings presentation, Nov 6, 2017
Slide 1: Management Presentation: Performance Highlights Q2 and H1 FY18
Rural Electrification Corporation Limited A Navratna PSU Management Presentation Performance Highlights Q2 and H1 FY 18 THE FUNDING PARTNER FOR POWER SECTOR
Slide 2: Table of Contents
Table of Contents India - Power Sector – Empowering India REC Overview Operational Performance Asset Quality Borrowing Profile Financial Highlights Disclaimer : • This presentation is for information purposes only and is not to be construed as an offer or invitation or recommendation to
Slide 3: India - Power Sector – Empowering India
India - Power Sector – Empowering India 3
Slide 4: Generation
Generation Installed Capacity 329 GW Generating Generation Stations 900 Units 2200 Generation Peak Demand PLF 61% 164 GW Source : POSOCO & CEA 4
Slide 5: Transmission
Transmission Transmission Lines 3,78,575 CKM 7000 Transformation Substations Capacity 7,81,330 MVA Transmission LINES 100 nos -765KV 26 ISTS Transmission >1300 nos – 400KV LINES Licensees >3200 nos– 220KV 10 nos – HVDC Bipole BtB India has the 3rd largest Grid in the World Source : POSOCO & CEA 5
Slide 6: Annual Per Capita Consumption of Electricity (kwh)
Annual Per Capita Consumption of Electricity (kwh) Per capita Consumption World - 2,674 Brazil - 2,516 South Africa - 3,904 China - 4,310 Japan - 7,371 Russia - 7,481 Singapore - 8,160 USA - 12,077 Source : CEA & Wikipedia 6
Slide 7: “Power for All” - Demand by 2021-22 (MW)
“Power for All” - Demand by 2021-22 (MW) 43% Source : CEA 7
Slide 8: “Power for All” - Installed Capacity by 2021-22 (MW)
“Power for All”- Installed Capacity by 2021-22 (MW) 329 GW 540 GW MW 73% 36% 68% 67% Estimated fund requirement for generation capacity addition – INR 10,33,400 Crores during the period 2017-22 Source : CEA 8
Slide 9: “Power for All” - Transmission Line Capacity by 2021-22 (CKM)
“Power for All” - Transmission Line Capacity by 2021-22 (CKM) 24% Estimated fund requirement for Transmission capacity addition including Transformation – INR 2,60,000 Crores during the period 2017-22 Source : CEA 9
Slide 10: “Power for All” - Transformation Capacity by 2021-22 (MVA)
“Power for All” - Transformation Capacity by 2021-22 (MVA) 28% Estimated fund requirement for Transmission capacity addition including Transformation – INR 2,60,000 Crores during the period 2017-22 Source : CEA 10
Slide 11: Renewable Energy in India
Renewable Energy in India Sources Potential (%) Potential (GW) India has voluntary commitment to reduce Wind Power (Onshore) 11% 103 Solar 83% 749 emission intensity by 33% - 35% from 2005 levels Small Hydro 2% 20 by 2030. Biomass /Bagasse 3% 23 It seeks to achieve about 40% cumulative electric
Slide 12: “Power for All” – Distribution Modernization by 2019
“Power for All” – Distribution Modernization by 2019 Present By March 2019 AT & C Loss Below 15% 24.6% Gap ACS -ARR Zero Rs.0.6/U Power Supply 24X7 19.9 Hrs Power for All 12
Slide 13: REC Overview
REC Overview 13
Slide 14: Key Strengths
Key Strengths 1 2 Occupies Strategic Position in the Growth and development of the Strong Fundamentals Power Sector across and Profitable Business India 8 Nodal Agency for Unique and close 3 providing 24x7 quality relationship with all power to all 600,000 major players – Public & villages of India
Slide 15: Major Milestones in Long & Successful journey
Major Milestones in Long & Successful journey of more than 48 years Jan’ 2017 : CPSE ETF Further Fund Offer (FFO); GoI holding reduced to 59.36%. Mar’ 2017 : CPSE ETF FFO - 2; GoI holding reduced to 58.86%. 2015 : Govt. of India (GoI) through an Offer for Sale (OFS) divested 5% of its holding; Overs
Slide 16: Board of Directors – Experienced Team with sector experience
Board of Directors – Experienced Team with sector experience Was Special Chief Secretary and Development Commissioner in the Govt of AP. Also held Dr. P.V. Ramesh, important position of Principal Finance Secretary, Principal Secretary Department of Health IAS & Family Welfare and Commissioner of I
Slide 17: Board of Directors – Experienced Team with sector experience
Board of Directors – Experienced Team with sector expirence Served on Board of Union Bank of India & State Bank of India. Was member of Committee Mr. Arun Singh of Eminent person in PGCIL. Has handled various projects of FAO, UNO and World Bank Independent Director as National Consultant. 27 years
Slide 18: Shareholding Pattern
Shareholding Pattern FPI investments have been consistently maintained at a level of around 20% and reaching high of 24.39% as on September 30, 2017 18
Slide 19: Shareholding Pattern
Shareholding Pattern Top 10 Share holders as at September 30, 2017 Rank Particulars Shareholding (%) Category 1 President of India 58.86 POI 2 Life Insurance Corporation of India 2.39 INS 3 The Prudential Assurance Company Limited 1.52 FPI 4 East Bridge Capital Master Fund Limited 1.13 FPI 5 CPSE ET
Slide 20: Performance of REC Share vis-à-vis Major Indices during Last 1 Year
Performance of REC Share vis-à-vis Major Indices during Last 1 Year ended Sept. 30, 2017 Source REC Share price : NSE Nifty 50 : NSE BSE Sensex : BSE REC’s stock has outperformed major indices and has earned much better returns 20
Slide 21: Operational Performance
Operational Performance 21
Slide 22: Sanctions - Composition
Sanctions - Composition Sector-wise breakup of Sanctions Rs. Crores 12M H1 Discipline-wise FY15 FY16 FY17 FY 17 FY 18 Generation 23,778 27,828 28,209 27,605 23,804 Renewable Energy 548 2,966 2,090 1,313 3,370 11 % Project T&D 35,135 31,377 49,047 18,002 25,089 Loans H1FY18 Total Project Loans 59,461
Slide 23: Disbursements - Composition
Disbursements - Composition Sector-wise breakup of Disbursements Rs. Crores 12M H1 Discipline-wise FY 15 FY 16 FY 17 FY17 FY18 Generation 13,828 12,820 21,697 11,359 7,885 Renewable Energy 295 304 1,618 376 1,973 5% Transmission 6,286 8,529 10,520 4,104 3,243 Project Loans Distribution 20,159 22,173
Slide 24: Outstanding Loans – Composition
Outstanding Loans – Composition Customer-wise breakup of Loans Category-wise breakup of Loans Rs. Crores 12M H1 Discipline-wise FY 15 FY 16 FY 17 FY18 Amt % Amt % Amt % Amt % State 1,33,712 75 1,53,941 77 1,51,976 75 1,64,619 76 Joint 14,629 8 16,808 8 16,728 8 19,204 9 Private 31,306 17 30,529 15 3
Slide 25: Outstanding Loans - Asset Diversification
Outstanding Loans - Asset Diversification PAN India Presence with loan concentration across 28 states and 1 Union Territory J&K 363 Himachal Haryana 657 5,636 Punjab Uttarakhand 251 8,078 2,282 Assam Arunachal Rajasthan 22 Bihar 20,913 UP 10,806 1,270 21,614 Sikkim Madhya Pradesh Nagaland 107 5,158
Slide 26: Outstanding Loans - Loan Concentration
Outstanding Loans - Loan Concentration Major Borrowers (as on Sept 30, 2017) Amount Outstanding % of Total Loan S.No. Top Ten Borrowers (Rs Cr.) Assets 1 Maharashtra State Power Generation Company Limited 13,164 6.10% 2 Maharashtra State Electricity Distribution Company Limited 11,311 5.24% 3 Rajast
Slide 27: Asset Quality
Asset Quality 27
Slide 28: Asset Quality – NPA position
Asset Quality – NPA position Non-Performing Loan Assets Figures : Rs. Crores 12M Q1 H1 Particulars FY 15 FY 16 FY 17 FY18 FY 18 Loan outstanding 1,79,647 2,01,278 2,01,929 2,07,802 2,15,845 Gross NPA 1,335 4,243 4,873 5,412 5,473 Provision 365 1,013 1,639 1,821 1,885 Net NPA 970 3,230 3,234 3,591 3,
Slide 29: Asset Quality - Restructured Loan Assets
Asset Quality - Restructured Loan Assets Rs. Crores Rs. Crores Rs. Crores Public (State) Private Total Restructured Loans Provision Figures : Rs. Crores 12M H1 Particulars FY 15 FY 16 FY 17 FY 18 Public (State Sector) 11,682 12,470 10,925 10,764 Provision - Public 321 436 475 503 Private 4,746 8,588
Slide 30: Borrowing Profile
Borrowing Profile 30
Slide 31: Outstanding Borrowings
Outstanding Borrowings Rs. Crores 12M H1 Particulars FY 15 FY 16 FY 17 FY 18 Institutional, Subordinate & Zero Coupon 97,068 1,09,678 1,13,449 1,11,172 Bonds Foreign Currency Borrowings 24,028 21,924 21,081 24,925 Capital Gain Bonds 15,591 17,164 19,477 20,568 Tax Free Bonds 11,649 12,648 12,648 12,
Slide 32: Outstanding Borrowings
Outstanding Borrowings (Rs. Cr.) 1,51,024 1,69,106 1,67,517 1,75,626 % age 32
Slide 33: Funds Raised During The Period
Funds Raised During The Period Rs. Crores 12M H1 Category FY15 FY16 FY17 FY 18 (A) Long Term Capital Gains Bonds 5,338 6,477 7,663 3,412 Tax Free Bonds - 1,000 - - Institutional Bonds/ Subordinate Debt 29,200 15,526 18,600 6,305 Banks, FIs, etc. - - - - Foreign Currency Borrowings 6,652 8,252 2,232
Slide 34: Funds Raised During The Period (Long Term)
Funds Raised During The Period (Long Term) (Rs. Cr.) 41,190 31,255 28,495 14,563 % age 34
Slide 35: Financial Highlights
Financial Highlights 35
Slide 36: Key Financial Highlights
Key Financial Highlights Loan Book as at end of H1 FY18 increased to Rs. 2,15,845 cr against Rs. 1,96,652 cr as at end of H1 FY17, registering a growth of 10%. Net worth as at end of H1 FY18 increased to Rs. 35,145 cr against Rs. 31,778 cr as at end of H1 FY17, registering a growth of 11%. As
Slide 37: Key Financial Highlights
Key Financial Highlights Yield on Loan Assets & Cost of Funds Yield = Ratio of interest income to average interest earning loan assets Cost of funds = Ratio of finance costs to average borrowings, without foreign exchange fluctuation gain/loss amortized. Interest Spreads & Net Interest Margins Inter
Slide 38: Key Financial Highlights
Key Financial Highlights Interest Coverage Ratio Interest Coverage Ratio = Ratio of Profit before Interest & Tax to Profit Before Tax Times Debt Equity Ratio Debt Equity = Ratio of Total Borrowings to Net Worth 38
Slide 39: Key Financial Highlights
Key Financial Highlights Capital Adequacy Ratio % Minimum Requirement as per RBI Guidelines : 15% Capital Adequacy ratio = Ratio of Owned Funds to Risk Weighted Assets Return on Average Net Worth Return on Average Net worth = Ratio of PAT to average Net Worth 39
Slide 40: Key Financial Highlights
Key Financial Highlights Earnings per Share Rs. (Face Value of Rs. 10 per share) Earnings per Share = Ratio of PAT to outstanding Equity shares. Rs. Book Value per Share (Face Value of Rs. 10 per share) Book Value per share = Ratio of Net worth to outstanding Equity shares. 40
Slide 41: Standalone Balance Sheet (abridged)
Standalone Balance Sheet (abridged) Rs. Crores 12M H1 Particulars FY 15 FY 16 FY 17 FY 18 Liabilities Shareholders Funds 24,857 28,618 33,326 35,145 Borrowings 1,51,024 1,69,106 1,67,517 1,75,626 Deferred Tax Liabilities (Net) 107 50 40 88 Other Liabilities 7,187 8,579 8,353 9,498 Total Liabilities
Slide 42: Standalone Profit & Loss Statement
Standalone Profit & Loss Statement Rs. Crores 12M Q2 H1 Particulars FY15 FY16 FY 17 FY 18 FY 18 Interest Income 20,072 23,471 22,936 5,371 10,834 Less: Finance Costs 11,845 14,283 13,775 3,427 6,770 Net Interest Income 8,227 9,188 9,161 1,944 4,064 Other Operating Income 157 168 415 122 230 Other In
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