PTC India Financial Services Ltd Share Price – NSE  / BSE

Finance, Small Cap

Net profit of PTC India Financial Services rose 20.78% to Rs 44.40 crore in the quarter ended June 2024 as against Rs 36.76 crore during the previous quarter ended June 2023. Sales declined 15.04% to Rs 161.22 crore in the quarter ended June 2024 as against Rs 189.75 crore during the previous quarter ended June 2023.

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PTC India Financial Services will hold a meeting of the Board of Directors of the Company on 30 July 2024.

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The agency has also downgraded the company’s short-term rating to [ICRA]A2+ from [ICRA]A1.

ICRA stated that the ratings downgrade for PTC India Financial Services (PFS) factors in the significant decline in the lending book, as its ability to mobilise funds has remained constrained over the past few years, following the concerns of corporate governance issues highlighted by independent directors in January 2022.

Further, the audit qualifications for the period ended on 31 March 2024, highlighted further corporate governance issues like conducting few meetings with shorter notice and delays in signing and finalisation of minutes of audit committee and board meetings, along with ineffective and inadequate quality, quantity and timelines of information flow between the company and its board members.

Consequently, lender confidence is likely to be affected resulting in continued impact on its ability to mobilise funds, which will moderate the loan book size.

The capitalisation profile for PFS is comfortable for the current scale of operations, with a gearing of 1.5 times as on 31 March 2024, and an adequate liquidity position backed by higher on-balance sheet liquidity.

PFS’ reported asset quality indicators remain weak, albeit some improvement in gross and net stage 3% of 12.8% and 6.1%, respectively, as on March 31, 2024, from 13.6% and 8.0%, respectively, as on March 31, 2023, due to no incremental slippages and some recoveries in FY2024.

PFS’ relatively modest competitive position in the infrastructure finance segment led to subdued profitability over the past few years, reflected in the subpar average 3-year (FY2022-FY2024) return on assets (RoMA) and return on equity (RoE) of 1.8% and 6.6%, respectively.

The improvement in FY2024 was largely on the back of the lower leverage, nil slippages, and resolution on some stressed accounts.

Going forward, the company’s ability to scale-up its business volumes, while controlling fresh slippages on a sustained basis, and raise funds through diverse sources at competitive rates would be imperative for improving its credit profile.

PTC India Financial Services provides financial assistance to infrastructure projects with a primary focus on the energy value chain. PFS’ outstanding loan book was Rs 5,395 crore as on 31 March 2024 compared to Rs 7,339 crore as on 31 March 2023. The loan book comprises renewable (20%), thermal and hydro power (7%), transmission (21%), distribution (30%), roads (9%) and others (14%).

The company has reported a profit after tax (PAT) of Rs 161 crore in FY2024 compared with Rs 176 crore in FY2023.

The scrip fell 1.17% to end at Rs 39.85 on the BSE on Friday.

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PTC India Financial Services has received revision in credit ratings from ICRA as under:

1 Non-Convertible Debenture [ICRA]A- (Negative); downgraded from [ICRA]A+ (Negative)
2 Fund based-Term Loan [ICRA]A- (Negative); downgraded from [ICRA] A+ (Negative)
3 Fund based-Short Term [ICRA]A2+; downgraded from [ICRA]A1
4 Commercial Paper [ICRA]A2+; downgraded from [ICRA]A1

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