Dear All,
Forwarding you the Result Update on NTPC for 4QFY2011 with a Buy recommendation and a Target Price of `202 (12 months).
For 4QFY2011, on a standalone basis NTPC reported a 20.9% yoy increase in adjusted net profit to `2,799cr. Bottom-line growth was aided by grossing up of RoE under the corporate tax rate for FY2011 (impact of `724cr) instead of the grossing up its RoE under MAT rate during 9MFY2011. However, for FY2011 as a whole, adjusted net profit was higher only by a marginal 5.4%. We maintain our Buy recommendation on the stock.
Top-line growth at 25.6% yoy: NTPC’s 4QFY2011 top line rose by 25.6% yoy to `15,519cr, aided by higher realisations due to higher fuel cost and grossing up under corporate tax rate (~34%). The company resorted to grossing up under corporate tax rate since it commercialised only ~1,000MW during FY2011 as against the earlier targeted ~3,000MW. ESO was lower by 1.3% during the quarter on account of low generation due to grid restriction and backing down by SEBs. However, the company maintained healthy PAF for the quarter (~96%) and for FY2011 (91%) as a whole, which enabled it to earn incentives. NTPC’s OPM for the quarter rose by 285bp on a yoy basis to 26.8%.
Outlook and valuation: NTPC has signed cumulative PPAs for 1,00,000MW, the payment for which is guaranteed under tripartite agreement till FY2016 and on the basis of first charge thereafter. NTPC is well placed in terms of fuel security due to the preference it gets in domestic coal supply and ability to pass through hike in fuel costs. Going ahead, NTPC’s growth will depend on the pace of capacity addition. We expect the company to register CAGR of 10.8% and 8.8% in its top line and bottom line over FY2011–13E. At the CMP of `171, the stock is trading at 1.9x FY2012E and 1.7x FY2013E P/BV. We maintain our Buy recommendation on the stock with a target price of `202.
Kindly click on the following link to view the Report.
If you have any further queries, feel free to call us on 022 39357600, Extn: 6865 or mail us at advisory@angelbroking.com
With best regards,
Fundamental Advisory Desk
Angel Broking
Akruti Star,6th Floor, Road No.7,MIDC, Andheri (E),Mumbai – 93.
Call : (91) (022) 39357600 Ext. 6865
Website : www.angelbroking.com
Disclaimer: Ours is an advisory role. The final decision and consequences based on our information is solely yours. Moreover, in keeping with regulatory guidelines, we do not guarantee any returns on investments. Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
No comments:
Post a Comment