NTPC Q2 PAT seen flat at Rs 2107.52 cr

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Country's largest power generation company NTPC is expected to report a profit after tax of Rs 2,107.52 crore for the second quarter of FY12 as against Rs 2,107.38 crore in the corresponding quarter of last fiscal.

Net sales are seen going up by 6% to Rs 13,832 crore from Rs 12,989 crore year-on-year. EBITDA is likely to go up by 4% to Rs 3,140 crore from Rs 3,010 crore during the same period.

Operating profit margin is expected to be at 22.70% as against 23.17%.

*** EBITDA does not include 'other operating income' and 'depreciation write-backs'

*** EBITDA includes depreciation and provisions

*** Previous year's net sales included Rs 181 crore of sales pertaining to prior period

Company's generation was down 2% in July and August due to lower PLF at most of its plants. NTPC is expected to report moderate growth in revenue and flattish profitability due to lower generation in Q2.

Lower generation and PLF despite higher capacity additions YoY, due to coal shortage and SEB (state electricity boards) backdowns

One key issue facing NTPC is that it might not able to fully utilize its generation capacity in FY12, due to SEBs backing down from purchasing expensive power generated using imported coal

Company is likely to meet its capacity addition target for FY12 with adding around 4320MW in FY12

However it might fall short on its commercialization target of around 2320MW - 1320MW at Sipat and 500MW at Farakka and Kahalgaon each

Company has so far been able to commercialize only 660MW at Sipat

Company is confident of being reallocated the cancelled coal blocks and it continues to spend on their development

Coal from the cancelled blocks is likely to meet around 20% of the company's FY17 requirement

Further, company has recently been allocated 4 new coal blocks which will cater to the requirements of Unchahar, Baretti, Kudgi and Gajmara projects

Expects improvement in payment cycle from SEBs

NTPC recently served notices to Delhi and Haryana SEBs owing to delays in payment and non-issuance of LCs

Company plans to further send notices to J&K, Bihar, UP and Tamil Nadu in the near future who are near the end of the 60-day payment window

Key factors to watch for ---

Capacity commissioning schedule; SEBs backing out; coal supply situation

Q2FY12 key developments

Company completed the bulk tendering of the BTG equipment for 9x800MW units

Company signed a JV agreement with Ceylon Electricity Board, Sri Lanka, on Sept 6th for setting up a 500MW coal based power station; the proposed JV will receive equal contribution from NTPC and CEB