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NTPC 3QFY2013 performance highlights and results update

Contributed by Angel Broking

For 3QFY2013, NTPC reported a 21.9% yoy growth in its net profit to Rs.2,597cr (on a standalone basis), mainly on account of a 6.7% yoy increase in electricity generation to 60.2BU (56.4BU in 3QFY2012) and higher PAF yoy at 88.6% (85.3% in 2QFY2012) for coal based plants. The PAF for gas based plants was marginally lower yoy at 93.8% (94.5% in 3QFY2012).

OPM expands by 670bp yoy: NTPC reported a subdued 2.9% yoy growth in its top-line to Rs.15,775cr. However, on the EBITDA front, the OPM expanded by 670bp yoy to 25.3% due to 638bp yoy decline in fuel cost as a percentage of sales. Higher availability of domestic coal and lower use of high GCV coal may have led to the sharp decline in fuel cost. NTPC received 38.2mn tonne (mt) of domestic coal in 3QFY2013 (33.0mt in 3QFY2012), an increase of 15.6% yoy; and 2.8mt of imported coal in 3QFY2013 (2.6mt in 3QFY2012), an increase of 8.9% yoy. The PLF of coal based stations came in flat yoy at 84.1%. However PLF of gas based stations declined sharply by 1,167bp to 58.8% (70.5% in 3QFY2012) due to lower gas availability. NTPC received 10.7mmscmd of gas in 3QFY2013 (14.2mmscmd in 3QFY2012), a decline of 24.6% yoy.

Outlook and valuation: We expect NTPC to register a CAGR of 12.3% and 8.5% in its top-line and bottom-line over FY2012-14E, respectively. The stock is currently trading at 1.6x FY2013E and 1.5x FY2014E P/BV. The impending FPO remains overhang on the stock. Hence, we maintain Neutral on the stock.