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NTPC: Higher Tax Provision Impacts Profits - Views on News from Equitymaster
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NTPC: Higher Tax Provision Impacts Profits
Mar 30, 2017

NTPC declared results for the quarter ended December 2016. The revenues grew by 10.9% during the quarter as compared to a year ago. While, the profits declined by 7.5% during the quarter. Here is our analysis of the results.

Performance Summary
  • NTPC's standalone revenues grew by 10.9% YoY during the quarter. Gross generation grew by 1% YoY.
  • PLF of coal plants decreased slightly to 77.21% as compared to 78.23% in Dec'15.
  • Energy sold improved by 1.19% Y-o-Y to 57.28 billion units.
  • The company's net profits declined by 7.5% YoY during the quarter. This was on account of increase in tax provision on account of increased orders as compared to last year. Effective tax rate for Q3 FY17 was 19.9% as compared to 4.3% in Q3 FY16.
  • The company plans to undego a capital expenditure of Rs 300 billion during this fiscal year. Of this, a capex of Rs 211.1 billion was incurred till the first nine months of the current fiscal year. The company is expected to add 3.7 GW capacity in the Thermal space and .75 GW capacity in the renewable space in FY 16-17.
  • Another overhanging factor on earnings is the GCV measurement of coal on an 'as received' basis from the earlier 'as fired' basis. The company from 1 October 2016 has started measuring the GCV of the coal on an 'as received' basis. Although there has been no impact on the earnings, this is an overhanging factor which can dampen the earnings of the company.

    Financial Performance Snapshot
    (Rs m) 3QFY16 3QFY17 Change 9mFY16 9mFY17 Change
    Net sales 174,857 193,959 10.9% 525,187 578,568 10.2%
    Expenditure 126,821 141,447 11.5% 400,782 420,385 4.9%
    Operating profit (EBITDA) 48,036 52,512 9.3% 124,404 158,183 27.2%
    EBITDA margin 27.5% 27.1% 23.7% 27.3%
    Other income 2,005.3 2,249.7 12.2% 7,741.2 5,723.6 -26.1%
    Depreciation 13,716 14,853 8.3% 38,467 43,147 12.2%
    Interest 8,424 9,090 7.9% 24,204 26,993 11.5%
    Profit before tax 27,901 30,819 0 69,475 93,767 0
    Tax 1,213 6,131 405.3% -10,295 20,734 -301.4%
    Effective tax rate 4.3% 19.9% -14.8% 22.1%
    Net profit 26,688 24,687 -7.5% 79,769 73,033 -8.4%
    Net profit margin 15.3% 12.7% 15.2% 12.6%
    No of shares (m) 8,245.5
    Diluted EPS (Rs)* 12.2
    P/E (times)* 13.5

    *trailing twelve month earnings excluding exceptional items

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Aug 22, 2017 03:36 PM

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