NTPC - It’s start of positive surprises; maintain positive view ::Emkay

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NTPC

It’s start of positive surprises; maintain positive view

ACCUMULATE

CMP: Rs 180                                        Target Price: Rs 204

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n     Q411 APAT of Rs29.8bn is 19% higher than provisional number of Rs25.1bn & reported PAT (Rs27.8bn) is 11% higher. As expected, there is exceptional provision of Rs2.8bn.

n     Q4 highlights - (1) full tax grossing up in Q411 for FY11 leading to ~Rs5.5bn of additional PAT, (2) Rs4.2bn of previous yr sales, (3) negative deferred tax of Rs1.4bn and (4) current tax rate at 28.6% after adjusting for refund.

n     We believe this is just start of positive surprises. In FY12E company can surprise on (1) again full tax grossing up, (2) higher commercialization as it is the last year of 80IA, (3) higher coal availability from coal India. Maintain Accumulate 

n     To review earnings post concall. Key things to clear in concall (1) tax refund in Q4?, (2) AAD recognized as sales in FY11 - is it added in dep.?, (3) FY12E grossing up, (4) COD targets in FY12E & (5) captive blocks cancellation