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NTPC FY09 provisional results: Key takeaways - Views on News from Equitymaster

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NTPC FY09 provisional results: Key takeaways
Apr 8, 2009

NTPC today announced provisional results for the financial year ended March 2009. The company has reported a 14% YoY and 6% YoY growth in standalone net sales and profits during the fiscal. While the topline performance has almost been in line with our estimates, the net profit growth has been lower than estimated, largely on account of higher raw material costs. During the fiscal, the company declared an interim dividend of Rs 2.8 per share (dividend yield of 1.5%). Key highlights of FY09 provisional results

Capacity addition: NTPC commissioned 1,000 MW (mega-watts) of new generation capacity during FY09, thereby taking its total capacity to 30,144 MW. Its power generation grew by 3.3% YoY to almost 207 bn units (BUs). This formed over 28% of the total electricity generated in India during the fiscal despite the fact that the company owns less than 19% of the total installed capacity of the nation, and thus speaks volumes about NTPC’s better efficiency and capacity utilisation. This can be clearly seen from the 91% PLF (plant load factor, or capacity utilisation) that was recorded by the company’s coal-based stations as against the national average of just around 77%.

New capacity addition plan
Details Capacity (MW)
FY10
Sipat Stage-I 1,320
Kahalgaon Stage-II 500
Korba Stage-III 500
NCTPP Stage-II 980
Total addition planned for FY10 3,300
XIth Plan (2007-2012)
Capacity commissioned 2,740
Capacity under implementation 17,930
Capacity under bidding 1,760
Total addition planned for XIth Plan 22,430
Source: Company press release

Capital expenditure: NTPC incurred capex of around Rs 127 bn during FY09, which was higher by 45% YoY. For the current fiscal (FY10), the company is targeting a capex of Rs 177 bn for which it has already tied up the necessary financing. In terms of capacity, the company has outlined a plan to add 3,300 MW of generation capacity during FY10 and has maintained that it will be able to meet its target of setting up a total of around 22,000 MW during the XIth five year plan (2007-12). However, given the pace of expansion combined with project delays, we are of the belief that NTPC might trip a little in terms of its planned expansion.

What to expect?
At the current price of Rs 197, the stock is trading at a multiple of 2.4 times our estimated FY11 book value per share. At this point in time, we maintain our view on the stock from a 2 to 3 years perspective.

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