One year Price Chart India’s biggest utility company, NTPC, was established in 1975 to accelerate power development in India. NTPC's core business is engineering, construction and operation of power generating plants. Apart from its major operation of power production, NTPC has already ventured into consultancy, power trading, ash utilisation and coal mining. With an electric power generating capacity of 39,674 megawatts (MW), NTPC has embarked on plans to become a 75,000 MW company by 2017. In addition, under JVs, seven stations are coal based while another station uses naphtha, LNG as fuel. The company has set a target to have an installed power generating capacity of 1,28,000 MW by the year 2032. Investor’s Rationale Selling 9.5% stake in state-owned electric utilities company, NTPC is a key element of the government's plan to reduce the trade deficit to 5.3% of gross domestic product by the end of March, from 5.8% in FY’12, to avoid a credit downgrade from global ratings agencies. The sale of 78.33 crore shares, at the indicative price of `145.96, will fetch the government close to around `120 bn, making it the biggest divestment in the current fiscal. With the NTPC sale complete, the total divestment proceeds for FY’13 will touch nearly 22,000 crore. The government had set a divestment target of `300 bn for the fiscal. Rating agency, Standard & Poor's (S&P) has stated that its rating on NTPC (BBB-/Negative/--) is not affected by the Indian government's 'offer for sale' on a part of its stake in the company. Further, the agency expects that the government will remain NTPC's majority shareholder and the Ministry of Power to retain administrative control over the board. The government's shareholding drop in NTPC to 75% from 84.5% will not change the assessment of the company's 'very strong' link with the government. NTPC recorded a growth of 21.9% YoY in its standalone bottom-line at `25.97 bn in Q3FY’13 primarily due to improved capacity addition resulting higher generation and lower raw material cost. However, topline grew marginally by 2.9% YoY at `15.77 bn on lower realization at `2.8/unit in Q3FY’13 from `3.3/unit in Q2FY’13, as fuel cost dropped to `1.8/unit from `2.0/unit on account of higher usage of domestic coal and lower contribution of gas projects. NTPC has got a green signal from the government for settlement of dues of Delhi Electric Supply Undertaking which provides for payment to be made by Government of National Capital Territory of Delhi to NTPC of `25.2 bn. Rating BUY CMP (`) 148 Target (`) 185 Potential Upside 25% Duration Long Term 52 week H/L (`) 190.8/137.0 All time High (`) 290.0 Decline from 52WH (%) 22.4 Rise from 52WL (%) 8.0 Beta 0.5 Mkt. Cap (` bn) 1,220.7 Book Value (` bn) 90.2 Promoters 84.50 84.50 - FII 4.39 3.95 0.44 DII 7.51 7.73 (0.22) Others 3.60 3.82 (0.22) Shareholding Pattern Dec’12 Sep’12 Diff. Market Data Y/E FY11A FY12A FY13E FY14E Revenue (`bn) 576.1 658.9 723.6 814.0 EBIDTA (`bn) 144.4 154.4 167.0 191.2 PAT (`bn) 93.5 98.1 100.9 112.2 EPS (`) 11.3 11.9 12.2 13.6 P/E (x) 13.1 12.4 12.1 10.9 P/BV (x) 1.8 1.6 1.5 1.4 EV/EBIDTA(x) 10.7 10.4 10.0 9.2 RoA (%) 10.3 9.8 9.4 9.5 RoE (%) 13.6 13.1 12.5 12.8 Fiscal Year Ended February 11, 2013 BSE Code: 532555 NSE Code: NTPC Reuters Code: NTPC.BO Bloomberg Code: NTPC:IN NTPC LTD.
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One year Price Chart
India’s biggest utility company, NTPC, was established in 1975 to accelerate
power development in India. NTPC's core business is engineering,
construction and operation of power generating plants. Apart from its major
operation of power production, NTPC has already ventured into consultancy,
power trading, ash utilisation and coal mining. With an electric power
generating capacity of 39,674 megawatts (MW), NTPC has embarked on plans
to become a 75,000 MW company by 2017. In addition, under JVs, seven
stations are coal based while another station uses naphtha, LNG as fuel. The
company has set a target to have an installed power generating capacity of
1,28,000 MW by the year 2032.
Investor’s Rationale
Selling 9.5% stake in state-owned electric utilities company, NTPC is a
key element of the government's plan to reduce the trade deficit to 5.3% of
gross domestic product by the end of March, from 5.8% in FY’12, to avoid a
credit downgrade from global ratings agencies. The sale of 78.33 crore shares,
at the indicative price of `145.96, will fetch the government close to around
`120 bn, making it the biggest divestment in the current fiscal. With the NTPC
sale complete, the total divestment proceeds for FY’13 will touch nearly 22,000
crore. The government had set a divestment target of `300 bn for the fiscal.
Rating agency, Standard & Poor's (S&P) has stated that its rating on
NTPC (BBB-/Negative/--) is not affected by the Indian government's 'offer for
sale' on a part of its stake in the company. Further, the agency expects that the
government will remain NTPC's majority shareholder and the Ministry of Power
to retain administrative control over the board. The government's shareholding
drop in NTPC to 75% from 84.5% will not change the assessment of the
company's 'very strong' link with the government.
NTPC recorded a growth of 21.9% YoY in its standalone bottom-line at
`25.97 bn in Q3FY’13 primarily due to improved capacity addition resulting
higher generation and lower raw material cost. However, topline grew
marginally by 2.9% YoY at `15.77 bn on lower realization at `2.8/unit in
Q3FY’13 from `3.3/unit in Q2FY’13, as fuel cost dropped to `1.8/unit from
`2.0/unit on account of higher usage of domestic coal and lower contribution
of gas projects.
NTPC has got a green signal from the government for settlement of
dues of Delhi Electric Supply Undertaking which provides for payment to be
made by Government of National Capital Territory of Delhi to NTPC of `25.2