NTPC - 4QFY2012 Result Update - Angel Broking

For 4QFY2012, on a standalone basis, NTPC reported a 6.8% yoy decline in its net profit to Rs.2,593cr. Adjusted net profit (after making adjustments for previous years' sales, prior-period items, write-back of provisions, provision for tariff adjustments and other adjustments) fell by 4.9% yoy to Rs.2,188cr. Better coal availability resulted in healthy PAF of 94.7% for coal-based pants for the quarter vs. 85.3% in 3QFY2012. We maintain our Buy view on the stock.

Top line grows by 4.8% yoy: NTPC reported a 4.8% yoy increase in its top line to Rs.16,264cr, largely on account of higher fuel costs (passed on) and 1,160MW of higher commercial capacity on a yoy basis. The company's ESO rose by 3.2% yoy to 56BU. Operating profit for the quarter increased by 12.9% yoy to Rs.4,112cr. Actual materialization of coal stood at 103% in 4QFY2012 compared to 92.4% in 4QFY2011. The company has indicated that coal materialization has been in excess of 100% till date in 1QFY2013 as well, and power generation is higher by 4.7% for the period.

Outlook and valuation: We expect NTPC to register a CAGR of 15.4% and 8.8% in its top line and bottom line over FY2012-14E, respectively. The stock is currently trading at 1.5x FY2013E and 1.4x FY2014E P/BV. Recently, the stock has corrected significantly due to concerns over sufficient coal availability for its plants in the future. We believe these concerns are overdone as we expect the company to bridge the shortage in domestic supply through coal imports and captive coal going ahead. We continue to maintain our Buy rating on the stock with a target price of Rs.201.

Source : Equity Bulls

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