ntpc: Lower under-recoveries drive strong performance; Capitalization to pick up pace; under-recoveries to decline
(NTPC IN, Mkt Cap USD16.1b, CMP INR129, TP INR158, 22% Upside, Buy)
Standalone (S/A) adj. PAT (management stated) grew by a healthy 14% YoY to ~INR106b in FY19 even as regulated equity grew by ~6% YoY (to ~INR540b). The strong performance was led by sharp reduction in under-recoveries on fixed charge (from ~INR14b in FY18 to ~INR8b in FY19) and increase in late payment surcharge income. Reported PAT was higher at INR117.4b (13% YoY) in FY19 on tax related adjustments (~INR17b), offset partly by certain one-time expenses.
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.
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