NTPC::Takeaways Motilal Oswal Annual Global Investor Conferences

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Key Takeaways
Core essence: Converting challenges into opportunities; capacity addition of 93GW
over the next 20 years v/s 35GW in the past 35 years.
Industry insights
 Energy demand in India has grown at a CAGR of 5.5%, vs average GDP growth of
7% over FY03-11. Over FY11-17E, demand grow expected at 7.5%.
 The Transmission and Distribution (T&D) sector needs high focus, given ~28.5% of
AT&C losses, limited open access, and high SEB losses.
 India produced 490mtpa of coal, with proved reserves of 106b tons v/s 2761mtpa
production by China, with proved reserves of 110b tons.
 Financing of new projects, equipment supplies (lead time) and statutory clearances
are key execution bottlenecks
Company vision and strategy
 93GW addition over next 20 years, 30GW in next 5 years: NTPC plans to
attain capacity of 128GW by 2032, an addition of 93GW over the next 20 years v/s
35GW in the past 35 years. Target to reach 67GW of installed capacity by FY17
(30GW in 5 years). 40GW of projects are under various stages of execution.
 Multi-pronged approach to overcome challenges: Key initiatives taken include:
(a) bulk tendering, (b) delegation of power to enable quick decision, (c) project
monitoring cell at corporate office, (d) limited notice to proceed to project construction
adopted, and (e) land acquisition cell established at the corporate center.
 Insulating fuel risk: FY12 coal requirement of 164m tons will be met from domestic
linkages (135m tons), bilateral contracts (5m tons) and imports (23m tons), indicating
blending of 14%. Long-term coal supply is being augmented by (a) pursuing linkages
for new projects, (b) developing captive coal mines - target to produce 47mtpa by
FY17, and (c) acquisition of coal blocks overseas /LT imports.
Key triggers/milestones/challenges
 Bulk tendering: Plans to conclude ordering by end FY12 would help improve visibility
on 12th Plan period capacity addition.
 Captive coal block: NTPC is pursuing restoration of de-allocated coal blocks with
the help of Ministry of Power and continuing development on blocks. Plans to produce
2.3m tons of coal from Pakri Barwadih mines in FY13.
 Payment security high: NTPC has been receiving 100% of dues from the customer
for eight successive years, as it is covered under tri-partite agreement till 2016.
 Capacity to drive efficiency/profitability: Man/MW ratio has gone down from
0.89x in FY07 to 0.77x in FY11, while PAT/employee has improved from INR29m in
FY07 to INR38m in FY11. Man/MW ratio would further decline to 0.5x


Mr Arup Roy Choudhury is
Chairman and Managing Director of
NTPC. Since he assumed this office
on 1 September 2010, he has taken
several steps to make NTPC a worldclass
organization. Mr Roy
Choudhury has worked in prominent
public and private sector companies
since 1979. He became the youngest
CEO of a Central Public Sector
Enterprise (CPSE) at the age of 44
years when he joined National
Buildings Construction Corporation
Limited on 3 April 2001 as Chairman
and Managing Director. He is a
graduate in Civil Engineering from
Birla Institute of Technology, Mesra
and a Post Graduate in Management
and Systems from IIT Delhi.
Mr Roy Choudhury is Chairman, for
the second consecutive term,
commencing April 2011, of the
Standing Conference of Public
Enterprises, the apex forum of the
Central Public Sector Enterprises in
India and a permanent invitee on the
Board of Reconstruction of Public
Sector Enterprises, a forum engaged
in turning around underperforming
CPSEs.