NTPC Ltd. share price target

2 November 2018 INR25.3b), even as regulated equity increased 7% YoY to ~INR520b. The performance was impacted by shortage of domestic coal resulting in fixed charge under-recoveries and an increase in working capital driving higher interest cost. PAT adjusted for prior-period and fixed-charge under-recoveries grew by a low ~2% due to a stronger base. Fixed charge u/recoveries were INR3.3b (-31% QoQ) in 2QFY19. Management guided for under-recoveries to reduce to ~INR6b in FY19 (v/s ~INR8.2b in 1HFY19 and ~INR14b in FY18) as coal availability improves and/or it uses imported coal. Interest cost increased 41% YoY to INR12.9b due to higher working capital. Receivables were higher, while the advance to railways for preferential rake allotment will continue. PAT) fell ~170/230bp YoY/QoQ to 19.9% v/s ~20.6% in FY18.

We analyzed NTPC's FY18 annual report. Key highlights: Under-recoveries in fixed charge and employee cost led to ~9% decline in NTPC standalone's (NTPCsa) core PAT, as against an increase of ~16% in regulated equity in FY18. However, reported PAT was up ~10% YoY to INR103b, supported by prior-year items, provision reversal and one-off gains. Core RoE declined ~300bp YoY to ~17% in FY18. Excluding under-recovery in fixed charge and employee cost, core RoE stood at ~20% (unchanged YoY)....

We recently interacted with the management of NTPC to understand the way forward for the company. NTPC's present installed capacity stood at 53.7GW at the end of Q1FY19 and the company aims to increase its installed capacity to 130GW by 2032. At present NTPC has 21GW of projects under construction of which it plans to capitalize 4-5GW each year between FY19 to FY22E. NTPC's capitalisation exceeded its capex for the first time in FY18 and we expect this strong capitalisation trend to continue over next 5 years, which in turn will boost its ROE from 9.8% in FY18 to 12% in FY20E. We remain bullish on NTPC from a longer term...

There will be no major fixed-charge under-recoveries by the end of FY19, as: (a) The Unchahar power plant, which is shut down post the unfortunate blast incident, should restart by October 2018 or at least before the end of CY18.(b) The government has permitted coal imports, which will assist in coal availability at non pit-head plants.(c) Coordination with Railways and Coal India has improved. It has given an advance of INR50b to Railways, which gives NTPC assured coal rake availability

Healthy Growth on Improved Generation & Improved Realisation In line with our estimate, NTPC's revenue grew by 14.2% YoY in 1QFY19 led by 7.9% YoY rise in generation and 4.9% rise in tariff. Looking ahead, we expect NTPC's business to improve further backed by higher capacity commercialisation, better fuel availability and likely improvement in demand owing to UDAY scheme. We maintain our BUY recommendation on the stock with...

Revenue decreased by 1.72% to Rs. 22703.6 Cr in Q1FY19 when compared to the previous quarter. NTPC Ltd Q1FY19 results Comment

ICICI Securities Ltd | Retail Equity Research NTPC reported a decent set of Q1FY19 numbers wherein revenues and EBITDA were above our estimates but optically significant YoY decline in other income impacted PAT YoY Adjusted revenues came in at | 22768.2 crore vs. estimate of | 22022.2 crore. Energy sold was at 64.56 billion units vs. our estimate of 64.78 billion units. The company's generation was up 7.5% YoY at 69.12 billion units in Q1FY19, in line with our estimate....

28 July 2018 NTPCs standalone (S/A) 1QFY19 adj. PAT increased ~16% YoY to INR29.5b. for INR4.9b under-recovery (u/r) of fixed charge (FC), ~INR1.1b in tax reversal for prior period and other minor adjustments. Reported PAT was down ~1% YoY to INR25.9b (est. INR25.3b) to FC under-recovery and a stronger base in other income. Other income was down 79% YoY to INR1.4b as the prior year quarter included non-recurring income tax refund income of ~INR3.7b. There was no commercial capacity addition in the quarter.

Adj. Profit growth begins to reflect capacity addition benefits NTPC's 1QFY19 adjusted net profit stood at INR 25bn, +11% YoY vs. 5-6% growth trend of past quarters. This compares with 16%YoY growth in regulated equity as the benefit of capex is now beginning to reflect in earnings growth. During the quarter NTPC witnessed a) reduction in coal under-recovery from c. INR 3.5bn in 3QFY18 to INR 1.3bn as Mauda was the only impacted project, b) fixed cost under recoveries of INR 1.6bn in Unchahar and Badarpur which will discontinue by 2H FY19 and c) INR 2bn fixed cost under recovery from annual maintenance shutdowns which got advanced to 1Q in FY19 vs. 2Q in FY18. Without...

Capacity Charge Under-Recovery Led by Coal Shortage NTPC's revenue grew by by 13.1% YoY to Rs231bn owing to 7.7% YoY rise in net power generation to 64.0bn units. Its reported PAT surged by 40% YoY to Rs29.2bn, which adjusted for one-off and prior period items came in at Rs26.7bn (+3.9% YoY). Looking ahead, we expect NTPC's business to improve further backed by higher capacity commercialisation, better fuel availability and likely improvement in demand owing to UDAY scheme. We maintain our BUY recommendation on the stock with an unrevised Target Price of Rs213. Healthy Revenue on Higher Generation & Improved Realisation...