Accumulate NTPC; target of Rs 180: Prabhudas Lilladher

Prabhudas Lilladher is bullish on NTPC and has recommended accumulate rating on the stock with a target of Rs 180 in its January 22, 2013 research report.

“NTPC’s PLFs, which suffered on account of lower coal supplies and grid restrictions in H1FY13, improved to 84% in Q3FY13, leading to a 7% YoY growth at 60.1bn units. However, the availability (PAF) showed a robust increase to 88.5% from 80.4% in Q2FY12, leading to higher incentives. The average tariff of generation in Q3FY13 stood at Rs2.9/Kwh. Adjusted PAT was up by 13.2% to Rs24.6bn.”
 
“Plant commercialisation till 9MFY13 stood at 3800MWs. 2) Rihand 500MWs was declared operational in Q3FY13. 3) Availability of Gas stations increased to 93.8% from 90% in Q2FY12. 4) Imports of coal were at 2.8mt, up 8% YoY and domestic coal consumption increased by only 5.1MT at 38.2MTs. 5) The company is expected to import 3-4mt in FY13E to compensate for domestic coal shortage. 6) The company has close to 15GWs under construction. 7) Capex incurred in 9MFY13 stands at Rs116bn, up 33.3% YoY. 8) Q3FY13 capacity stands at 34GWs on a standalone basis and 38.2GWs on a group level.”

“At 1.6x FY14E, the stock offers a defensive play within the sector. The major hurdle of coal now seems to be diluting, safe guarding the generation growth in the future. The onus will now lie with the company to increase the pace of capacity addition and consequently, increase the ROEs. Coal block development will further add to the regulated equity and thus, aid earnings. We have upgraded our target price as the overhangs are slowly receding. However, we believe that the pricing of the Offer for Sale in February would remain the key to stock performance in the near term. We maintain. Accumulate on the stock with target price of Rs 180,” says Prabhudas Lilladher research report.

Institutional holding more than 40% in Indian cos

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