MOSL: NTPC (Buy)-Fixed cost under-recoveries reducing-Capitalization to drive strong earnings growth
NtpC: Fixed cost under-recoveries reducing; Capitalization to drive strong earnings growth; Maintain Buy
(NtpC IN, Mkt Cap USD20.5b, CMP INR167, TP INR215, 28% Upside, Buy)
NTPC’s standalone (S/A) 4QFY18 adj. PAT increased ~5% YoY to INR28b. PAT is adjusted for INR4.3b under-recovery of fixed charge (FC) and many prior-period items. Reported PAT increased 41% YoY to INR29.2b on account of a weaker base and prior-period sales, despite FC under recovery. Calculated core adj. PAT grew ~6% YoY to INR24.6b, while regulated equity grew 16% YoY (+1% QoQ) to INR509b. Commercial capacity increased by 8MW QoQ (Singrauli hydro) to 44.5GW.
- For FY18, S/A stated adj. PAT grew 12% YoY to INR108b. Reported PAT growth was lower at just ~2% YoY to INR103b due to FC under recoveries. Commercial capacity increased by 3.9GW YoY, while generation increased ~6% YoY to 266BU.
- PAT declined ~2% YoY to INR105b for FY18 due to lower profit at subsidiary and JV companies.
- NTPC group’s capitalization momentum is expected to pick up with a commercialization target of ~5GW in FY19 (est. of 4.2GW) and a similar target for FY20. The recent MoU with Bihar state for the acquisition of state genco plants will further boost regulated equity and capacity.
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.