18 April, 2014 08:33 IST
News
`Buy` NTPC; target Rs 204: Emkay
Source: IRIS Exclusive (31-JAN-12)
Comments  |  Post Comment

Emkay Global Financial Services has maintained `Buy` on NTPC with a price target of Rs 204 as against the current market price (CMP) of Rs 172 in its report dated Jan. 30, 2012. The broking house gave the following rationale:

Higher R&M and water charges resulted into lower profitability:

NTPC`s 3Q12 PAT of Rs 21.3 billion against our estimates of Rs 22.6 billion, lower by 10% y-o-y and 12% q-o-q, due to under recovery on water charges (Rs 772 million) and higher maintenance expenses. NTPC has pre-pone the plants maintenance to 3Q12 which resulted into incremental R&M expenses of Rs1.5billion. Adjusting for one offs (previous yr sales is not considered to be one-off), APAT stood at Rs 21.7 billion whereas comparable profit (adjusted for PY sales) at Rs 23.5 billion. Gross generation during the qtr has increased by 3% y-o-y to 56.4BU driven by 1660MW of commercialized capacity addition since 3Q11. Revenues stood at Rs 153.3 billion, up 14% y-o-y primarily driven by realizations (Rs 3.02/unit), up 20% y-o-y. Increase in fuel cost (up 26% y-o-y on per unit basis) has largely contributed to better realizations during the quarter.

Reduce our assumptions for COD in FY12E and PAF:

The PAF of coal stations remained low at 86.2% (YTD) whereas only 1160MW commercialized till date in FY12. Given the structural challenges, we reduce our assumptions for PAF (from 90% to 88.5%) and commercialized capacity addition for FY12 (from 2820MW to 2320MW). Our new assumptions are based on structural challenges facing up by NTPC like- 1) limited fuel availability, 2) logistics constraints and 3) slowdown in execution.

90%+ PAF structurally coming down; maintain Buy:

Courtesy to its regulated price based business model, NTPC has been able to pass on the increasing variable cost and recover the fixed cost. However acheiving commissioning target of 4980MW (on best efforts basis) in FY12E would be challenging with only 1320MW commissioned and 1160MW commercialized till date. We reiterate that FY12 is sunset yr of 80IA and NTPC might surprise positively in commissioning and COD in last quarter of FY12E with another 1160MW ready for commercialization. We have reduced our consolidated earnings estimates to Rs 11.2 and Rs 12.4/share for FY12E/FY13E.

Click here to view full report

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.



NTPC Limited   (Q,N,C,F)*


Live News
Gold futures settle down 0.7% to USD 1,293.5; silver falls 0.2% - 18-Apr-2014 08:29
All India closing mandi prices for April 17 - 18-Apr-2014 08:24
Indian ADRs higher; ICICI Bank, HDFC Bank up - 18-Apr-2014 08:19
Alkyl Amines closes down Belgium subsidiary - 17-Apr-2014 18:31
Au Financiers raises USD 21 mn of additional capital - 17-Apr-2014 18:21
Edelweiss Financial board to consider buy-back of shares - 17-Apr-2014 18:15
RIL allots 95,981 equity shares under ESOS - 17-Apr-2014 18:10
Gujarat Pipavav board approves Rs 4.6 bn expansion plan - 17-Apr-2014 18:01
10-year G-sec yield fall 9 bps to 9.17% - 17-Apr-2014 18:01
HCL Tech needs to improve growth rates in non-IMS businesses: Dipen Shah - 17-Apr-2014 17:59
Commodity wise freight revenue by railways goes up by 10.23% during 2013-14 - 17-Apr-2014 17:56
more...
* Q - Quote , N - News , C - Chart , F - Financials
Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type   ky8v4b into this box
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Forums  |   E-mail  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer