India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
NTPC receives nod to sell 150MW of power outside long-term PPA
The Ministry of Power has given NTPC the go ahead to sell 15% of power outside the longterm
PPA with respect to the 500MW Unit 7 of Korba Super Thermal Power Project and
500MW unit 6 of Farakka Super Thermal Power Project. The company will sell the balance
to the state power utilities under the long-term PPA. Thus, 150MW of power would be
available for sale on short-term basis. This move will add a marginal ~`83cr (1%) to our
FY2012 bottom-line estimates. We believe that the company’s profitability would receive a
substantial boost if the government allows sale under the short-term route from its other
existing and upcoming plants as well. At the CMP of `199, the stock is trading at P/BV of
2.4x FY2011E and 2.2x FY2012E and at EV/MW of `4.35cr on FY2012 estimates. In view
NTPC’s regulated business model with assured RoE and strong cash flow visibility, we have
assigned EV/MW of `5.25cr and P/BV of 2.3x on FY2012 estimates to arrive at a Target
Price of `230. We maintain Buy on the stock.
No comments:
Post a Comment