NTPC Ltd. share price target

Gross generation declined 12.6% to ~61.2 billion units (BUs) vs. estimate of 60.7 BUs whereas energy sold declined 13.9% YoY to 56.3 BUs vs. our estimate of 58.6 BUs, given auxiliary consumption was at 8%. Plant load factor (PLF) of coal plants was at 63.5% vs. 77.7% in Q3FY19 while that of gas based plants was at 10.4%. Similarly, the plant availability factor (PAF) was at 88.3% vs. 85.3% in Q3FY19 while the same for gas based stations was at 98.8% vs. 94.9%. As of Q3FY20, commercial capacity was at 47985 MW whereas installed capacity was at 49695 MW as of 9MFY20. The...

FC recoveries of INR0.7b were largely driven by better availability at NTPCs plants, given production recovery at corresponding Coal Indias mines. On the other hand, the company had witnessed FC u/r of INR2.8b in the same quarter last year pertaining to Unchahar (which has now stabilized post the boiler blast) and the lack of coal availability at Kudgi and Mauda (non- NTPC booked late payment surcharge of INR4.2b (v/s INR0.9b in 3QFY19), given the change to accrual accounting and higher overdues amount. NTPC witnessed FC recoveries of ~INR0.7b as the availability factor for its plants The company noted that DIPAM has appointed a transaction advisor for the acquisition, while NTPC has appointed SBI Caps for the same. NTPC expects another ~5.2GW to be commercialized in PAF at NTPCs plants was impacted by coal production issues at Coal Indias mines (Talcher, Korba coal fields) in 1H.

23 January 2020 NTPCs commercialization target of ~5GW appears on track. PAF at NTPCs plants was impacted by coal production issues at Coal Indias mines (Talcher and Korba coal fields). We note that in FY19, u/r were largely pertaining to Unchahar (which has now stabilized post the boiler blast) and the lack of coal availability at its non-pit head plants (such as Kudgi and Mauda). This time around Talcher, Korba and Sipat pit head plants have largely seen issues on fuel availability. Thus, as production at corresponding Coal Indias mines recover, availability at these plants can be ramped up. Over Nov-Dec19, NTPCs plants within Korba coalfields (Sipat and Korba Stg. III) have reported PAF of 90-100%. ~5GW of capitalization for FY20 appears to be on track given the recent commissioning/commercialization. We believe fuel supply/availability at these plants can be ramped up (if operational issues at mines do not persist).

This was driven by an increase in generation from pit head (lower variable cost) plants in the northern and eastern regions of India; on the other hand, higher variable cost generation from the southern region CERC, in its order, has taken note of this and (1) extended its implementation up to end-FY20, and (2) set out a methodology for sharing of benefits accumulated in the pool. The CERC has directed that benefits within the SCED pool should be shared equally between the participating generators and DISCOMs (after compensation for part load operations of generators). The benefit for each generator would be in proportion to their share of SCED schedule for the time Our analysis suggests that NTPC is entitled to a net benefit of ~INR1b for the first three months of the pilot scheme (see As observed, PLF for NTPCs non- pit head plants (such as Simhadri, Kudgi, Solapur and Dadri) have declined.

21 November 2019 As part of the Indian governments strategic divestment program, the cabinet Details on the transaction value though are still awaited. According to our interaction with NTPC, the purchase value for these assets will be decided after an internal assessment. This process could take another 2-3 months. THDC (~1.5GW) and NEEPCO (~1.45GW) are broadly a hydro dominated portfolio, with combined hydro capacity of 2.3GW (refer exhibits 1/2). Acquisition of the same would increase NTPCs commercial capacity by ~5%. THDC operates 1.4GW of hydro plants and ~0.1GW of renewable capacity. According to tariff orders, regulated equity for its hydro portfolio stands at ~INR32b. Adj. profits were at INR8.5b for FY19, given CWIP and WC investments.

Q2 FY20, NTPC Ltd.'s quarterly profit beat analysts' estimates on the back of higher other income even as coal supplies fell due to the extended monsoon The Country's largest power generator- NTPC Ltd. with a group installed capacity of 57106 MW, declared the financial results for the second quarter and half-year ended 30 September 2019. For Q2 FY20, the Total Income was Rs. 24459.70 crore as against Rs. 23347.95 crore in Q2 FY19, registering an increase of 4.76. PBT was Rs. 3,497.72 crore, as against Rs. 2,634.68 crore in the corresponding quarter of previous year, registering an increase of 32.76%. For Q2 FY20, PAT was Rs. 3408.92 crore, as against Rs. 2,477.28 crore in the corresponding quarter of...

NTPC reported operationally weak set of Q2FY20 numbers. In a seasonally weak quarter, marred by monsoon, weak demand and higher hydro power generation, the print pertaining to gross generation and energy sold were below estimates. However, the silver lining was the capacity addition achievement till H1FY20, which instils confidence that NTPC will meets its capacity addition guidance for FY20E. Optically PAT looks ahead of estimates, which is on account of higher surcharge income booked (| 650 crore) during Q2FY20 as payments from SEBs have been delayed. This has...

U/r in 2QFY20 was on account of coal availability issues at Talcher/Sipat and capital overhaul at Farakka. NTPC expects to recover FC in 2HFY20 and plans to supply imported coal to plants facing continued shortage. Given the rise in over-dues, NTPC has booked late payment surcharge income of INR6.5b. Share of JV PAT stood at INR1.2b (v/s INR1.4b in 2QFY19). Current receivables were elevated at Even if the late payment surcharge and related interest costs were adjusted, we believe that NTPCs underlying numbers are strong and reflect the benefit of FY20- 24 tariff regulations. Farakka witnessed issues to capital NTPC has awarded tender for importing 6.5mt of coal. NTPC has booked late payment surcharge income of INR6.5b. Post implementation of its LC mechanism; company has received timely Over-dues >45 days now stand at INR70-75b.

3 October 2019 NTPC has completed trial-run operations at full load for unit-1 on 29 will likely commercialize the unit this month. For unit-2, light up will likely be completed over the next one month with commissioning scheduled for Jan20. Total project cost for the plant is ~INR110b (~INR83m/MW) excluding FGD. FGD contract of INR5.2b has been awarded and likely to commission in Nov 20. Coal for the plant would be sourced from its own captive mine (Pakri Barwadih or PB). The mine is located ~1,100km from the plant and significant investments (~INR15b) are made to ensure rail connectivity. Given the long distance between the mine and plant, freight cost is high (~INR2,200/t). Fuel costs are at ~ INR3-3.3/kWh for the plant. Initial tariffs would be >INR5/kWh. NTPC has two wagon tipplers in place at the site, with the third one set to commission by Nov19.

NTPC Ltd. owns and operates power generation plants that supply power to state electricity boards throughout India. The company generates power from coal, gas, liquid fuel, hydro, solar, nuclear, wind and renewable energy...