Reliance Infra Q4FY17 Summary

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Financial Highlights

Reliance Infra Q4 FY17 Financials
  • For Q4 total income is at 6145 crores. The EBITDA is at 1793 crores, a growth 12%. 
  • The net profit for the quarter is at Rs. 41 crores which is against the loss of Rs. 327 crores in the same quarter last year
  • The whole year income is at Rs. 28,222 crores. The EBITDA is at Rs. 8,274 crores, which is a growth of 11%. The net profit for the year is at Rs. 1,425 crores, which is a growth of 88% over last year.
  • The consolidated net worth of the company stands at Rs. 23,348 crores which gives a book value of almost Rs. 888 per share
  • The Board has recommended an increased dividend of 90%, which is equal to Rs. 9 per share for the current year
  • There has been restatement of 9 months for FY17 numbers mainly due to regulatory assets accrued in Mumbai as well as in Delhi, particularly in view of the tariff order which company received in October as well as some favorable orders received pertaining to previous period. 
  • This amount is 800 crores plus at consolidated level
  • Other income has dropped down significantly mainly on account of IndAS adjustment which have been carried out in the Q4, certain exemptions which are available under 101 new accounting standards, they have been of course exercised, and in view of that certain financial instruments have been fair valued as at 1st April 2015 which has resulted in lowering the finance income
  • The company expects that the Mumbai Discom sales will be completed by the end of financial year as given in guidance previously
  • The company has tying up with world majors across key defence majors across all countries. The company has tie-up with the LIG & that will then give access to certain portfolio of products. This tie-up will initially there will be MoU & the technology tie-up & then as & when the bidding approaches then the color of whether this is just a technology tie-up, those things can then get clarified
  • InvIT is a new product which has not been tested in India in a very very low environment, this is a product which gives you double-digit return with backdrop of solid assets. Over couple of quarters there are major approvals which have been given to the insurance, pension & mutual fund companies to invest in InvIT & REITs. So there remains a huge demand for these products even in India, so between Indian businesses also all the HNIs are free to invest. It is a very good vehicle for debt investment for Indian HNI as well as all the Indian residents in foreign countries
  • The  regulatory asset in Mumbai right now as end of March 31st, 2017 is above 2000 crores
  • The company is yet to get approval of Dahanu PPA & is hopeful that it will get approval from MERC.
  • The Balance sheet has asset for sale of Rs 3900 crores, this is pertaining to the road asset, the assets of 7 toll roads have been shown as assets ready for sale.
  • There is amount of 525 crores where in there are certain advances in the respect of EPC business which got stuck up, so as a conservative response, the company decided to write off the same.

EPC Business

  • EPC is an area of very high focus and will be one of key drivers of the company going forward
  • Won orders worth Rs. 4,385 crores across power and roads in the last financial year
  • In marquee distribution areas of Mumbai and Delhi, the company has added 2.3 lakh new customers. 
  • Recovery of old arrears in Mumbai continues on track, with recovery of 894 crores.
  • Revenue from infrastructure has increased by 13%
  • The daily ridership in our Mumbai metro has increased by 15% & company has efficiently serviced the highest ever peak demand in Delhi of 6400 megawatt without any outage
  • Share purchase agreement for transmission businesses are signed with Adani Transmission for both WRSSS and Parbati Koldam, the company is in advanced level of closure. The company’s key CP left is the approval through CERC which is a very routine hearing and expect that this
    will definitely be consumed in the first quarter of this year
  • The company has filed prospectus for InvIT for Road assets & got the requisite approvals from NHAI as well as from Haryana government & expect this to be launched in May
  • Reliance Defence and Engineering is the only shipyard selected by US Navy for repairs and MRO of ships for the US 7th Fleet in the Indian Ocean and this was a very stringent checking done by the US Navy across all the Indian ports after the LEMOA agreement and they have gone through all the public sector as well as the private sector ports. And RDEL is the only port which has been selected
  • The company has won 2 arbitration award against NHAI & money flow will start without even the need of a bank guarantee
  • There are Rs. 14,000 crores worth of arbitration awards which are at advance levels and company expects that substantial amount of this cash flow should accrue to the company in the current year
  • Earlier this year the company had completed 100% sale of cement subsidiary to Birla Corp for Rs. 4,800 crores and the money for that was received in the second quarter itself.
  • The company has very strong Engineering, Procurement and Construction team, it is a negative working capital business, majority of equipment is already available with company so need for new CAPEX is not there
  • The company has been selected as the L1 bidder for a major power project for Rs 3800 crores. The award is expected in the next one month, it has to go to their board meeting. The company has had multiple meetings with them &  expect this award, the LOA will be issued within next 30 days, which will increase the new order book that have done almost 8000 crores.
  • The company sees almost 2 lakh crores per annum opportunity for key Government of India projects as well as key state projects.
  • The company is selective in the states & there are bids worth Rs 11000 crores which have already been bidded and these are across transmission, nuclear, railways, water pipeline as well as the Chatrapati Shivaji Maharaja statue
  • The company has done tie-ups with very leading international majors like KC Cottrell of Korea, Rizzani of Italy, CAI of Ukraine, NMDC of Abu Dhabi to capitalize on this huge EPC opportunity that the country presents now.
  • Target for order book for end of March 2019 continues to be at Rs. 50,000 crores

Transmission business

  • Nothing great to report except that CPs have almost all got done. The key CP left is the CERC approval
  • There is 10% increase in Road business despite the negative impact owing to the demonetization  in H2 of current year
  • The company supports cashless initiative & the number of digital transactions on September 30 versus March 31 there is dramatic shift from cash to digital.

Defense business

  • The US Navy has selected only the company’s shipyard & this is 15000 crore opportunity over the next 5 to 6 years. 
  • There are total bids by RDEL totaling to Rs. 25,000 crores where the bids have been submitted and that these bids are expected to be opened in the next three to six months.
  • In Defense business the company has tie ups with world major
  • Joint venture with Dassault is progressing well, the company is getting requisite approvals, the ground breaking for the factory  is expected to start very shortly and expect the factory to come up in the next couple of quarters. And the offset work will commence.

Power business

  • The power business continues to be extremely cash positive. 
  • The company is the most competitive power distribution player.
  • All the high-end customers which had gone in the industrial and commercial segment would
    have come back to the company by the end of the year. 
  • Delhi distribution business operationally is doing extremely well. Company had a major reduction in AT&C losses
  • In BPRL the company has reduced by more than 2% for the year & now down to 10.7%. 
  • In Rajdhani, in the south & west circles, the south circle is below 10%, west which has got lot of outline areas like Najafgarh and all that where adjoining with other states, the losses are higher in the 16% - 17% range.
  • In Yamuna the company has been able to reduce AT&C losses by 3% & it is now at 12.7%.
  • The company had started Rajdhani at 57% and we had started Yamuna at 63%.
  • The benefit of this entire reduction goes to the consumers of Delhi and the government of Delhi.
  • Debt in Delhi distribution business has reduced further by 1300 crores & is now at Rs 2560 crores.
    Infrastructure business
  • Infrastructure businesses continue to operate very, very satisfactorily
  • In Mumbai metro, again, the company is having a flawless operation, 100% availability, 100% on-time performance
  • During the day i.e. Monday to Friday, growth in numbers are like 18% to 19%. Sunday is the day where ridership is the lowest and the growth there is in the region of 8% to 10% compared to last year which brings down the growth for the entire year at about 15%.
  • The company has done tie-ups with BEST, done tie-ups with share taxis to give hub & spoke solutions so that the commuter when he comes down has multiple modes of local travel, which will safely take him at effective cost to his office or his residence.
  • Exploring non- core revenue streams for all the assets that the company has.
  • The Andheri station has been now branded to Bank of Baroda and the Western Express Highway Station has been branded with Magic Bricks, and this brings a much needed revenue for the metro business.

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