NTPC - Grossed at full rate; upped commissioning target ; Buy :Emkay

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NTPC

Grossed at full rate; upped commissioning target ; Buy

BUY

CMP: Rs 177                                       Target Price: Rs 204

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n     NTPC grossed its ROE by corporate tax in 1Q12 & guided for a tax rate of ~21% for FY12 – in line with our expectations but a positive trigger as consensus has build in MAT

n     Indicated upping commissioning target from 4320MW to 4980MW in FY12 (Sipat 660MW synchronized). We reiterate FY12 is sunset yr of 80IA – expect positive surprises in COD

n     1Q12 PAT impacted by (1) higher planned maintenance (+1% yoy) affecting PAF at 89.90% vs 90.14%, (2) prior year taxes (Rs1bn) and (3) lower UI (our assessment)

n     Positive news to continue 1) higher COD in FY12-sunset yr of 80IA, (2) FY12/13 grossing & (3) in medium-term, acquiring distressed plants. Maintain Buy; rising interest rates- concern