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NTPC Ltd.| Q3FY13 First Cut | Mixed set of performance




IndiaNivesh Securities Pvt Ltd


21 Jan 2013





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NTPC Ltd.| Q3FY13 First Cut Analysis Mixed set of performance NTPC’s reported Q3 FY13 numbers (Standalone) were mixed bag. Revenue increased by 3% y-o-y (down 2.1% Q-o-Q) to Rs. 157.74 bn (vs. consensus of Rs.167.27 bn). The company produced 60.19 billion units (up 6.5% Y-o-Y and 14% Q-o-Q) in Q3FY13. Despite higher production, lower than expected revenue may be attributed to lower off-take. Reported PAT increased by 22% y-o-y to Rs 25.96 bn (vs. consensus of Rs.24.42 bn). Adjusted PAT (After excluding Rs 299 mn of prior period sales and Rs 0.18 mn of prior period tax recovered net of expensed) was up by 21% y-o-y to Rs 25.66 bn. However, EBITDA margins improved by 657 bps y-o-y to 25.5% mainly due to lower fuel and staff cost. During the quarter, one unit of 550 MW at Rihand project has been declared commercial w.e.f. 19th Nov. 2012. 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. 162, NTPC is trading at 1.68xFY13E 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. We will come out with detailed analysis after the con-call.

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