NTPC Ltd. share price target

Continues to remain at attractive valuations; Maintain Buy NTPC reported Q4 numbers which were better than expectations, with an adjusted PAT of Rs 38bn. The drop in PLFs at 67% in FY20, compared to 77% in FY19, reflects the trend in the industry, but is still better than the industry PLF of 56% in FY20. It has commercialized 5.2GW in FY20, while maintaining a target commercialization of 5.9GW in FY21. NTPC also plans to achieve 5.5GW of capacity addition in FY21. Its capex target is Rs 210bn in FY20....

The first tranche of the Rs20tn package' mentioned by the Prime minister was announced today, comprising measures worth Rs6tn. This tranche included a Rs900bn loan to state discoms by govt-owned PFC and REC to pay off the genco dues. The loan will be provided against the Rs940bn receivables of the discoms. The loans will be secured against receivables, and additionally guaranteed by respective state govts. The liquidity will be infused within a couple of days by offering concessional loans to state electricity discoms, which would be 150 bps lower than the usual lending rates by the PFC and REC. while the loan rate would be concessional, it will vary from utility-to-utility depending...

22 April 2020 NTPC has met its target of 5.3GW of commercialization for FY20, marking the highest ever commercialization for the company in a single year (Exhibit 1). We note the recovery of RoE / fixed charges for these plants depends on NTPCs ability to operate and declare availability. Thus, the company is insulated from power demand conditions (which, given the current scenario, could lead to lower offtake from these plants). Muted power demand, coupled with production ramp-up at Coal Indias mines, has resulted in an increase in coal stocks at power plants. In 1H, availability at NTPCs plants was impacted by production issues at Coal Indias mines (Talcher and Korba coalfields). However, production at these mines has improved, leading to recovery in coal stocks at these plants (Exhibit 2). As per our interaction with NTPC, given the essential nature of the power generation business, the movement of coal through rail or road has not been a challenge.

The acquisition multiple ascribed is reasonable as Neepco has been acquired at P/BV multiple of 0.6x on FY19 financials (latest available) while on an equity/MW basis the valuation works out to | 1.9 crore/MW (operational plus under construction capacity). Similarly, THDC has been acquired at a P/BV multiple of 1.1x on FY19 financials while on an equity/MW basis, the valuation works out to | 2.9 crore/MW (operational plus under construction capacity). This acquisition will help NTPC diversify its thermal based portfolio as non-thermal capacity before this event was just 800 MW....

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...

NTPC Q3 PAT rises 22.6% to Rs 3197.73 cr, meets estimates as other income rises Revenue from operations in Q3 December 2019 declined 0.31% to Rs 25412.39 crore, from Rs 25491.04 crore in the corresponding period last year. Profit before tax (PBT) for Q3 December 2019 stood at Rs 3672.94 crore, down by 1.34% from Rs 3722.76 crore in Q3 December 2018. Tax expenses declined 12.33% to Rs 696.63 crore year-on-year (YoY). Profit after tax (PAT) for Q3 December 2019 stood at Rs 3179.06 crore, grew by 22.37% from Rs 2597.95 crore in Q3 December 2018. NTPC group's total installed capacity increased to 58,156 MW as on 31 December 2019 as...

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.