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NTPC Q2 Result Preview: Revenue may increase by 5-15%, PAT by 2-3%

India’s largest power-generating company is scheduled to post its results on October 28

October 28, 2021 / 10:32 AM IST
The imported coal will primarily be used at power stations that are located far away from the domestic mines that are most vulnerable to disruptions.

The imported coal will primarily be used at power stations that are located far away from the domestic mines that are most vulnerable to disruptions.

 
 
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NTPC, the country’s largest power generating company, may report a 2-3 percent increase in net profit in the second quarter from a year earlier, according to analyst estimates. Revenue growth estimates range from 5 to 15 percent.

The state-owned company is scheduled to declare its results for the quarter ended September 30 on October 28.

Demand for coal, which fires most of NTPC’s power stations, has increased globally, sending prices skyrocketing. Even domestic supplies had tightened recently, with coal stocks at many power plants in India falling below the minimum threshold.

NTPC is largely dependent on coal for power generation. The company has an installed power generation capacity of 66,900 MW. It operates 24 plants with a coal-based installed capacity of 47,460 MW.

Analysts said NTPC’s revenue is expected to grow by between 5 and 15 percent from Rs 24,677 crore reported a year earlier. The company reported revenue of Rs 26,039 crore in the previous quarter.

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While the company’s profit is expected to increase by 2-3 percent, some expect earnings to fall.

What brokerages expect

Kotak Institutional Securities said in a report that revenue may grow 6.7 percent  to Rs 26,321 crore from a year earlier, which would be a 1.1 percent increase on a sequential basis.

“We expect a modest growth in generation at 70 billion units (+3.4% y-o-y) on the back of a weak base and commercialisation of 1.4 GW over the trailing 12 months and an incremental 800 MW commercialised during the quarter,” Kotak said.

The brokerage expects earnings before interest, tax, depreciation and amortisation (EBITDA) to grow 11.5 percent to Rs 8,007 crore from a year earlier. Sequential growth would be 7.6 percent.

The EBITDA margin is expected at 30.4 percent, which is an improvement of 131 basis points from last year and 185 bps from the previous quarter. One basis point is one-hundredth of a percentage point.

“We estimate reported PAT to grow to Rs 3,600 crore (+2.8% yoy) in 2QFY22 adjusting for the one-time rebate of Rs 560 crore offered in 2QFY21 on account of Covid-linked demand destruction,” Kotak said.

Motilal Oswal expects a more robust revenue growth of 18.3 percent to Rs 29,598 crore, which is a 10.3 percent increase on a sequential basis. It expects EBITDA to grow 12 percent on an annualised basis to Rs 8,434 crore. Sequential growth in EBITDA would be 2.5 percent.

However, it expects profit to be about Rs 3,220 crore.

Sharekhan said NTPC may post a 2.7 percent y-o-y net profit growth to Rs 3,600 crore supported by commercialisation of new capacities partially offset by lower other income. Revenue may increase 8.6 percent annually to Rs 26,800 crore with operating margins improving by 97 bps to 30.1 percent.

The stock closed at Rs 141.20 on October 27. It has generated 58 percent returns over the past year.



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Moneycontrol News
first published: Oct 28, 2021 10:21 am
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