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India Equity Research Reports, IPO and Stock News
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RATING...............................................................................................................Unchanged
P r o f i t s b e l o w e s t i m a t e s …
Revenues grossing up at the MAT rate, decline in availability of coal for
thermal power stations, renovation and maintenance in thermal plants
leading to higher expenditure, higher fuel cost (increase of 29% YoY),
higher other income and increase in debtors days were the key highlights
of Q3FY12 results of NTPC. Adjusted PAT post adjustments is | 2153
crore (lower than our estimates of | 2440 crore and Street estimates of
| 2300 crore). Average realisation per unit for the quarter stood at
| 2.94/kwhr (auxiliary consumption of 7.1%). While we like the regulated
nature of its business, capacity addition backed by fuel security (to
maintain 80%+ PLFs for coal based power plants), lower PAF due to
muted coal production (resulting in under recovery of fixed charges),
capacity slippages and back down by SEBs are key risks for the company.
We maintain our HOLD rating on the stock mainly on account of possible
under recoveries due to lower PAF (for thermal power stations).
ƒ Higher other expenditure due to repairs and maintenance
In Q3FY12, higher water charges and repairs and maintenance of
power plants has led the increase in other expenditure of | 150
crore. The company lost 2.7 billion units in Q3FY12 (4.8% of total
generation) as against 5.3 billion units in Q3FY11.
ƒ Capacity addition of 4320 MW in FY12, ~4000 MW in FY13
The company remains confident of adding 4320 MW in FY12 (on a
consolidated basis). As per CEA data, we expect a capacity addition
of 2980 MW. Till date, the company has added 1820 MW and
commercialised 1120 MW.
V a l u a t i o n
At the CMP of | 172, the stock is trading at P/E of 15.8x FY12E and 15.3x
FY13E EPS, respectively. Similarly, on P/BV multiples, the stock is trading
at 1.9x FY12E and 1.8x FY13E, respectively. Superior execution (in terms
of commercialisation of power capacities) and higher PAF could re-rate
the stock. We maintain our HOLD rating on the stock. Slippage in capacity
ramp up in FY12 and backdown by SEBs are key risks to our call.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
RATING...............................................................................................................Unchanged
P r o f i t s b e l o w e s t i m a t e s …
Revenues grossing up at the MAT rate, decline in availability of coal for
thermal power stations, renovation and maintenance in thermal plants
leading to higher expenditure, higher fuel cost (increase of 29% YoY),
higher other income and increase in debtors days were the key highlights
of Q3FY12 results of NTPC. Adjusted PAT post adjustments is | 2153
crore (lower than our estimates of | 2440 crore and Street estimates of
| 2300 crore). Average realisation per unit for the quarter stood at
| 2.94/kwhr (auxiliary consumption of 7.1%). While we like the regulated
nature of its business, capacity addition backed by fuel security (to
maintain 80%+ PLFs for coal based power plants), lower PAF due to
muted coal production (resulting in under recovery of fixed charges),
capacity slippages and back down by SEBs are key risks for the company.
We maintain our HOLD rating on the stock mainly on account of possible
under recoveries due to lower PAF (for thermal power stations).
ƒ Higher other expenditure due to repairs and maintenance
In Q3FY12, higher water charges and repairs and maintenance of
power plants has led the increase in other expenditure of | 150
crore. The company lost 2.7 billion units in Q3FY12 (4.8% of total
generation) as against 5.3 billion units in Q3FY11.
ƒ Capacity addition of 4320 MW in FY12, ~4000 MW in FY13
The company remains confident of adding 4320 MW in FY12 (on a
consolidated basis). As per CEA data, we expect a capacity addition
of 2980 MW. Till date, the company has added 1820 MW and
commercialised 1120 MW.
V a l u a t i o n
At the CMP of | 172, the stock is trading at P/E of 15.8x FY12E and 15.3x
FY13E EPS, respectively. Similarly, on P/BV multiples, the stock is trading
at 1.9x FY12E and 1.8x FY13E, respectively. Superior execution (in terms
of commercialisation of power capacities) and higher PAF could re-rate
the stock. We maintain our HOLD rating on the stock. Slippage in capacity
ramp up in FY12 and backdown by SEBs are key risks to our call.
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