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NTPC – Slowly Powering Ahead

May 18, 2010

In FY10, NTPC’s operating income grew 9% YoY to Rs482.2bn, EBITDA rose 14% YoY to Rs143.2bn, and reported PAT was up 6% to Rs87.3bn. However, adjusting for previous years sales (Rs6.01bn +), change in DTL (Rs4.57bn -), sales related to income tax recovery (Rs7.2bn +), tax related to earlier years (Rs5.25bn +), provision for pay hikes (Rs3.14bn -) and AAD (Rs3.16bn -), the recurring PAT Rs94.85bn is up 14% YoY. The results are in-line with our expectations on a reported basis.

NTPC is in process of ordering 11 super critical sets (11x660MW i.e. 7,260MW) to domestic BTG equipment manufacturers in the current financial year. This could be a good opportunity for super-critical equipment manufacturers in India such as BHEL, L&T and other emerging companies in this space such as Bharat Forge. The cumulative order (Rs200bn) could be significant in value for these companies.

EPS Estimates for NTPC:
UBS – Rs 12.2 and Rs 13.45 for FY 11 and FY 12
Goldman Sachs – Rs 9.3 and 11.7 for fy 11 and fy12 respectively.

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