MOSL: NTPC (Buy)-CEA prescribes GCV booster to earnings-Valuations attractive
​​NTPC: CEA prescribes GCV booster to earnings; Valuations attractive; reiterate Buy
(NTPC IN, Mkt Cap USD22.3b, CMP INR180, TP INR211, 17% Upside, Buy)
- CEA's recommendation to compensate for practical loss of GCV…
- CERC, in a letter dated November 14, 2017, has invited comments from stake holders on CEA's recommendation to compensate power generation companies (GENCOs) 85-100kcal/kg of coal for pithead stations and 105-120kcal/kg of coal for non-pithead stations towards practical loss of GCV during storage and handing between "as received' and "as fired" for the following reasons:
- Effect of moisture in GCV of coal sample taken from wagon top.
- Loss in GCV during coal storage inside power plant.
- Reduction in GCV during handling inside power plant.
…bodes well for NTPC
- We believe CEA's recommendations are based on merit and are in line with our understanding of the issue. Stakeholders are likely to approve them. According to our ballpark calculations, this is likely to boost NTPC's post tax earnings by INR8b-10b (add 7% to FY19E EPS) after taking into account 40% sharing with beneficiaries. Most of NTPC's plants are at the pithead, though the mix is changing now.
NTPC owns and operates power generation plants that supply power to state electricity boards throughout India. Co. also offers consultancy services related to infrastructure sector business such as: Fossil fuel based thermal power plants; Combined cycle power plants; Cogeneration plants; Water supply and treatment and Environment engineering and management. Co. runs a Power Management Institute (PMI), at NOIDA. PMI has over the years trained a number of professionals from Co., State Electricity Boards and other power utilities in the country. Also, participants in PMI programmes have come from various South Asian and Middle Eastern countries.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.