Unlisted Shares

Revenue:

• Revenue growth of 14% year-on-year in FY22 driven by increased power demand and expansion into new service areas.

• EBITDA growth of 4% year-on-year. Operating profit margin (OPM) improved from 10% to 18%.

• Net profit margin (NPM) declined sharply by -86% year-on-year due to non-recurring income in FY21 from liabilities written back and increased collections from regulatory deferral account balances.

Profitability: FY21 saw inflated returns attributable to a surge in other income resulting from the write-back of Late Pay Surcharge and an uptick in collections from regulatory deferral account balances. Consequently, despite an upswing in revenue and an improvement in gross margins, escalating from 22% in FY21 to 28% in FY22, the bottom line experienced a notable decline, impacting the financial performance in FY22. Specifically, the return on assets (ROA), return on capital employed (ROCE), and return on equity (ROE) declined to 2%, 4%, and 7%, respectively, during FY22

Investment Thesis: The power distribution sector in Delhi is anticipated to experience improved profit margins, attributed to the recent tariff adjustments sanctioned by the Delhi Electricity Regulatory Commission (DERC) effective from June 6, 2024. Commencing from July 2023 and extending over the next nine months, BSES Rajdhani Power Limited (BRPL) has communicated a tariff increase of 6.39%. It is noteworthy that the industry average Price-to-Earnings ratio (P/E) stands at 18, and the company's current Net Profit Margin (NPM) of 7% is considered moderate relative to prevailing industry benchmarks. Further, the company is currently investing in Battery Energy Storage System with InGrid.

Key Personnel: 

• Reliance Infrastructure Limited (R-Infra), holding 51% in BSESRL is an Indian private sector enterprise involved in power generation, infrastructure, construction and defenceThe company is headed by its chairman, Anil Ambani, and chief executive officer, Punit Narendra Garg (since 6 April 2019). It is part of the Reliance Anil Dhirubhai Ambani Group. In Fortune India 500 list of 2019, Reliance Infrastructure was ranked as the 51st largest corporation in India with first rank in the 'Infrastructure Development' category. As of March 2018, Reliance Infrastructure has 56 subsidiaries, 8 associate companies, and 2 joint ventures.
• Delhi Transco Limited (DTL), formerly Delhi Power Supply Company Limited (DPSCL) is the State Transmission Utility for the National Capital Territory of Delhi. It is responsible for the transmission of power at 220 kV and 400 kV level and for upgrading, operating and maintaining the high voltage network.