NTPC - 1QFY2013 Result Update - Angel Broking

For 1QFY2013, on a standalone basis, NTPC reported a 20.4% yoy growth in its net profit to Rs.2,499cr. The healthy performance on the bottom-line front came on account of a healthy 7.8% yoy growth in generation and higher commercial capacity resulting in an increase in the regulated equity. The company's coal stations reported a healthy plant availability factor (PAF) of 88.4% (89.9%) for the quarter, albeit lower on a yoy basis. However, gas based stations reported a higher PAF of 92.6% on a y-o-y basis.

Top-line grows by 12.6% yoy: NTPC reported a 12.6% yoy increase in its top-line to Rs.15,960cr, aided by higher capacity. The plant load factor (PLF) of the coal based stations stood at 86.5%, down 40bp on a y-o-y basis. While power generation rose by 7.8% on a yoy basis, it was down by 2% on a q-o-q basis. The actual materialization of domestic coal stood at a high 98.3% in 1QFY2013, resulting in lower import of coal. The operating profit increased by 26.7% yoy to Rs.3,631cr. During the quarter NTPC commercialized 2,300MW of capacity.

Outlook and valuation: We expect NTPC to register a CAGR of 14.9% and 8.6% in its top-line and bottom-line over FY2012-14E, respectively. Although, the company had healthy coal materialization during 1QFY2013, the maintainability of the same remains uncertain considering the domestic coal shortage situation. The lower PAF due to domestic coal shortage is expected to result in a fall in core RoE. The stock is currently trading at 1.7x FY2013E and 1.5x FY2014E P/BV. We continue to remain Neutral on the stock.

Source : Equity Bulls

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