#TNPL Q1FY23, Significant improvement in Board EBITDA, performance better than expected
*Instant KTAs:*
• QoQ NSR rise is likely at 16.5% and 42% YoY
• Good cost control led to Rs 36 crore PBT from Board segment itself. The Board EBITDA is now looks to be matched with that of W&P EBITDA.
• Significant control in Working capital led to reduction in borrowing, massive reduction in interest cost.
• Flat QoQ depreciation indicate the trial run of the pulp plant is continuing as is evident from the board margin improvement.
• Providing tax in old regime, that is at ~36%
• Despite adverse forex movement and international coal price, QoQ energy cost increased by just Rs 2/kg.
• Reduction in note book sales
• Company has started giving sales volume figure in the results
*Inference:*
The performance has been ahead of our expectations, largely due to (1) Better than expected board margin (2) Better than expected NSR (3) Good control on Power and Fuel cost (4) Reduction in interest cost due to repayment of old project debt. Going ahead, with (1) the soft international coal prices (2) favorable exchange rate and (3) backward integration; the operating performance of the company likely to get better, quarter to quarter. We expect Rs *13400/ton* EBITDA in FY23E as against *Rs 11761/ton* reported in Q1FY23.