NTPC Preview: 24% rise in Q1 net likely, brokerages positive on growth prospects

NTPC Q1 preview

India’s largest power generation company NTPC is expected to report a healthy growth in net profit for the quarter ended June 2023 over last year.

Standalone profit after tax is expected to grow 24 percent on-year to Rs 4,543.23 crore in Q1 of FY24, whereas its revenue is likely to rise 5 percent on-year to Rs 40,404.53 crore, according to an average of three brokerage estimates.

Though on a QoQ basis, net profit is seen declining 20 percent while sales may witness a 2 percent drop.

Kotak Institutional Equities sees a sequential decline in net profit for NTPC due to the inclusion of prior period sales worth Rs 1,040 crore, which were accounted for in Q4 of FY23.

Sharekhan expects healthy earnings growth for power PSUs and sees 44 percent on year growth in NTPC’s net profit. According to the brokerage firm, NTPC's earnings will be bolstered by factors such as sustained and robust growth in the regulated equity base, higher other income, and reduced interest costs.

India's power consumption showed little growth in April and May 2023, remaining flat compared to the previous year. It is expected to remain subdued in June due to the monsoon season.

Electricity demand was low in the June quarter, with All-India generation (excluding renewable sources) staying flat at 377 Billion Units compared to the previous year.

This soft demand is likely to result in subdued power generation in the first quarter of FY24. However, there is some relief for power generators as international coal prices have sharply corrected, offering some respite.