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NTPC Ltd. | Q2FY13 Result Update




IndiaNivesh Securities Pvt Ltd


28 Oct 2012





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NTPC Ltd. | Q2FY13 Result Update | Adjusted PAT below expectation NTPC reported its Q2 FY13 numbers (Standalone) above street estimates. Revenue increased by 5% y-o-y and 1% Q-o-Q to Rs. 161.19 bn (vs. consensus of Rs.155.55) led by higher commercial generation to 52.21 bn unit (up 4% y-o-y) and inclusion of prior period sales of Rs. 10.23 bn. Reported PAT increased by 30% y-o-y to Rs 31.42 bn. However, adjusted PAT (After excluding Rs 10.23 bn of prior period sales and Rs 2.92 bn of prior period tax recovered net of expensed) was up by 13% y-o-y to Rs 18.14 bn (vs. consensus of Rs 21.7 bn). Despite higher capacity addition (2160 MW in last one year) operational performance were muted in Q2FY13 due to lower PAF and PLF. Plant Availability factor (PAF) during the quarter was 80% for coal and 90% for gas based plants vs. 83% and 92% in Q2FY12. Coal and Gas PLF were also lower at 75% & 58% compared to last year 78% & 83%, respectively. Gross generation was 52.71 BU and commercial generation was 52.21 BU during the quarter. However, EBITDA margins improved by 449 bps y-o-y and 360 bps q-o-q to 27.6% mainly by lower fuel cost on the back of better fuel mix. Valuation: NTPC is well placed in terms of fuel security due to the preference it gets in domestic coal supply and ability to pass through hike in fuel costs. We expect the company to register CAGR of 12-15% in its top line due to huge capacity addition in next two years. At the CMP of Rs. 169, NTPC is trading at 1.76xFY13E BV lower than of historical average book value of 2.2x. We have buy rating on the stock with a target price of Rs. 194.

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