NTPC –Neutral- Motilal Oswal
NTPC reported FY10 provisional net profit of Rs86b (up 6% y-o-y), v/s our estimate of Rs87.8 billion. Reported net profit includes several extra-ordinaries (Prior period tariff arrears, FERV adjustments, etc) and thus we await further details on the full year numbers to derive at adjusted profit. PLF for coal based power projects has declined from 92.2% in FY08 to 91.1% in FY09 and 90.8% in FY10, largely due to decline in imported coal availability at 6.3m tonne vs initial targets of 12.5m tonne.
During FY10, NTPC’s capacity addition stood at 1.6GW (actual capacity addition of 990MW, plus 570MW of Ratnagiri project) vs management guidance of 3,300 MW. For FY11, NTPC expects to add 4.2GW (vs capacity addition of 4.3GW over FY08-10E). This is a meaningful ramp up over historical averages. We expect NTPC to add approximately 10GW of capacity in FY11 / FY12 (vs 10GW of capacity addition over FY03-10), comprising of 4.2GW in FY11 and 5.9GW in FY12.
As on March-10, projects under construction stand at 17.8GW, largely stable compared with 16.9GW in end FY08 and 17.9GW in end FY09. Project award pipeline in FY11 remains robust, with bids invited for 7.1GW of capacity. Projects for which Feasibility Report is approved stands at 4.3GW and is prepared / under preparation for approx 15GW. During FY10, NTPC has awarded BTG contracts for 890MW of capacity (2GW in FY09); and we expect BTG awards for 25-30GW of capacity in FY11/12E, which again will be a meaningful ramp-up.
FY10 actual capex at Rs101b, significantly below target of Rs177b; FY11E planned capex at Rs223b (up 120% YoY): During FY10, NTPC incurred capex of Rs101b (vs Rs127b in FY09 down 20% YoY). This compares with target of Rs148b as per revised estimate for FY10E and earlier target of Rs177b. For FY11E, NTPC has now planned capex of Rs223b on standalone basis and Rs291b on consolidated basis. We believe this is very crucial towards achieving planned capacity addition in FY11 and FY12 and given slippages in FY10. NEUTRAL.
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