EUR 120.00 For Business Accounts Only

MOSL: NTPC (Buy)-Profits in-line, aided by other income

NTPC: Profits in-line, aided by other income

(NTPC IN, Mkt Cap USD15.4b, CMP INR118, TP INR140, 19% Upside, Buy)

 

To see steady growth, led by capacity additions; maintain Buy

• NTPC's 1QFY22 results highlight a steady performance - given the regulated business and aided by other income. S/A adj. PAT (excl. FC u/r) was broadly flat YoY at INR33.1b.
• NTPC has set a RE capacity target of 60GW by 2032. While this may seem ambitious (implying 5-5.5GW p.a. of RE additions over the next 11 years), the co. has taken steps to improve its renewable footprint. ~3GW of renewable capacities are under construction and expected to be commissioned over the next two years. Even as the co. gradually scales up its renewables journey, we expect continued capitalization for its thermal projects to drive 12% growth in regulated equity over FY21-23E. Maintain Buy, with DCF-based TP of INR140.

 

Profits aided by other income

• for one-offs, NTPC's S/A PAT (excl. FC u/r) was broadly flat YoY at INR33.1b (our estimate: INR33.7b) on the back of higher other income.
• Other income at S/A was up 35% YoY to INR7.6b (estimate: INR5.1b) and was boosted by dividends of INR3b from subs and JVs. LPS was lower at INR2.65b v/s INR4.73b in the previous year. Adjusted for the dividends from subs and JVs, PAT nos. (excl. FC u/r) would be INR30.6b.
• Commercial capacity was up 25MW QoQ to 64.5GW, led by the commercialization of solar capacities.
• FC under-recoveries stood at INR1.9b (v/s est. INR1.8b and INR2.25b in the previous year). FC under-recoveries were led by Simhadri (INR1.1b) and Rihand (INR0.5b). Plant availability factors at coal-based plants were marginally down YoY to 93.7% (v/s 95.8% in the previous year).
• PLF at coal-based plants rose to 69.7% (v/s 58.2% in the previous year). PLF incentives stood at INR1.7b v/s INR1.4b in the previous year.