NTPC::Takeaways Motilal Oswal Annual Global Investor Conferences

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Key Takeaways
Capacity addition to accelerate, 14GW expected over FY12-14
 NTPC expects to accelerate capacity addition, adding 14GW over FY12-14 against
capacity addition of 10.4GW over FY06-11.
 Targeted capacity addition of 5GW a year from FY12 until 2032 against ~1GW over
the past 35 years.
 The FY12 capacity addition target is maintained at ~4.3GW (including the 500MW
Mauda project on a best effort basis. NTPC incurred ~65% capex for projects targeted
for commissioning in FY12, providing higher visibility.
Fuel sourcing: Comfortably placed in FY12, working on LT strategy
 In FY12, NTPC plans to meet its need for 135mt of fuel supply from domestic long
term linkages, 23mt through imports (actual at 14mt) and 5mt through the bilateral
route, implying ~14% blending.
 The management is hopeful of a revocation of mine de-allocation, given the
substantial progress made. A mine developer and operator (MDO) for Pakri Barawidh
and Talaipalli mines has been appointed and NTPC is in advanced stages of
development of the Kerandari mines. NTPC expects to produce 2.3mt of coal from
its captive mines in FY13 and 47mt by FY17.
 NTPC indicated the possibility of more mines being allocated to it given its progress
in developing its mines has been better than the average time taken for mine
development.
 NTPC signed an agreement with Jindal ITF to set up an inland waterways transport
system (IWTS). The MoU was signed in August and the system will become
operational in 15 months' time. This will solve coal supply logistics issues at its
Farakka and Kahalgaon projects.
Twelfth Plan capacity addition 25GW+, bouquet of projects offers flexibility
 NTPC plans to have installed capacity of 128GW by FY32 and commission 26GW in
Twelfth Plan. The management indicated that 6GW of bulk tendering, which is subjudice
would not impact its Twelfth Plan capacity addition plans, as NTPC is working
on several projects and a slippage in one could be offset by other projects particularly
brownfield expansion.
 NTPC's 60GW project portfolio provides visibility on targets for capacity addition
until FY17.
Valuation and view
 We expect NTPC to report net profit of INR88b (up 11% YoY) in FY12 and INR104b
in FY13 (up 19% YoY). The stock quotes at a PER of 16x FY12E and 14x FY13E. P/BV
is 2.0x FY12E and 1.8x FY13E. Maintain Buy.