Surprisingly even PLF improved 2.8% points sequentially to 86.9%; though down 4.2% points yoy
January 01, 1970 5:30 IST | India Infoline News Service
CMP Rs154, Target price Rs187, Upside 21.4%
Largely in line with the estimate, NTPC reported revenue of Rs164.6bn up by 4.4% qoq
Adjusted PAT registered growth of 23% yoy to Rs26.9bn
Generation remained flattish despite growth in capacity
The coal PAF improved to 92.7% registering improvement of 4.1% points qoq and higher by 1.1% points yoy
Surprisingly even PLF improved 2.8% points sequentially to 86.9%; though down 4.2% points yoy
Availability factor for coal-based plants in FY13 was 87.6% vs. 88.4% in FY12
NTPC added 3.2GW at the standalone level and 4.2GW at the consolidated level, in line with the company’s original FY13 target
We maintain BUY with a target price of Rs187
Result table (Standalone)
(Rs mn)
Q4 FY13
Q4 FY12
%yoy
Q3 FY13
% qoq
Generation (BU)
60.3
59.9
0.6
60.2
0.2
Sales (BU)
56.4
58.0
(2.8)
56.3
0.2
Realisation (Rs/unit)
2.9
2.8
4.1
2.8
4.2
Net sales
164,618
162,636
1.2
157,749
4.4
Material cost
(103,897)
(104,430)
(0.5)
(100,982)
2.9
Personnel cost
(9,814)
(8,963)
9.5
(6,916)
41.9
Other overheads
(11,843)
(7,953)
48.9
(9,899)
19.6
Operating profit
39,065
41,290
(5.4)
39,952
(2.2)
OPM (%)
23.7
25.4
(166) bps
25.3
(160) bps
Depreciation
(10,213)
(7,363)
38.7
(8,288)
23.2
Interest
(5,912)
(4,870)
21.4
(5,304)
11.5
Other income
34,555
7,683
349.8
7,546
357.9
PBT
57,495
36,740
56.5
33,907
69.6
Tax
(13,679)
(10,640)
28.6
(7,940)
72.3
Effective tax rate (%)
23.8
29.0
(517) bps
23.4
38 bps
Reported PAT
43,816
26,100
67.9
25,968
68.7
Adjusted PAT
26,920
21,881
23.0
25,500
5.6
Adj. PAT margin (%)
16.4
13.5
290 bps
16.2
19 bps
EPS (Rs) (Annualised)
13.1
10.6
23.0
12.4
5.6
Source: Company, India Infoline Research
NTPC reported revenue of Rs164.6bn up by 4.4% qoq
Largely in line with the estimate, NTPC reported revenue of Rs164.6bn up by 4.4% qoq. Revenues grew higher than the growth in generation despite adding capacities on the back of higher realisations. Management stated that non availability of imported coal hampered the growth in generation; whereas there was more than 100% realisation from coal India. The management confirmed the resolution of issues related to imported coal. Hence we expect improvement in PLF going forward.
PLF and PAF improvement are signs of recovery
NTPC coal station PAF during Q4 FY13 stood at 92.6% as against 88.6% in Q3 FY13, higher by ~4.1% points qoq and 1.1% percentage points yoy. NTPC received 41.8mmt of domestic coal in 4Q FY13 as against 38mmt in 3Q FY13, up 10.2% yoy and ~4% qoq. Resultantly blending of imported coal came down to 5.18% from 6.49% of Q3 FY13 and 5.35% of Q4 FY12. Consequently, PAF and PLF were also higher than estimated. Surprisingly even PLF improved 2.8% points sequentially to 86.9%; though down 4.2% points yoy.
Cost-Analysis
As a % of net sales
Q4FY13
Q4FY13
bps yoy
Q3FY13
bps qoq
Material cost
63.1
64.2
(110)
64.0
(90)
Personnel cost
6.0
5.5
45
4.4
158
Other overheads
7.2
4.9
230
6.3
92
Total costs
76.3
74.6
166
74.7
160
Source: Company, India Infoline Research
Reported PAT registered 67.9% yoy growth to Rs43.8bn
NTPC reported PAT growth of 67.9% yoy to Rs43.8bn. Adjusted net income was below our estimate by 10% on account of increase in other expenses led by higher water charges and repair and maintenance across the units. Company recorded Rs17bn of gain mainly on account of interest income towards settlement of Delhi state board dues which has inflated the reported PAT. Reported employee expenses seem higher but, adjusted employee expenses are in line with the sales (adjustment of Rs2bn in last quarter and addition of capacity related expenses of ~Rs2bn in this quarter).
Other operational highlights
NTPC commissioned 3.2GW at the standalone level and 4.2GW at the consolidated level, in line with the company’s original FY13 target
Coal stock as on date stands at 7 days of requirement i.e. 4.6mmt
Outlook & Valuation We believe NTPC’s earnings visibility remains high with assured return model and increasing capacities. Currently, the concerns over domestic fuel availability and deteriorating health of SEBs make the utilities space risky. But, for NTPC Improved pace of capacity addition and a resilient business model increase visibility of the XIIth plan targets. We believe with improving PAF and robust capacity addition, the growth in sales and ROE is inevitable. We maintain BUY with a target price of Rs187
