The board has approved the proposal to buy back up to 197.9mn equity shares at a price of Rs115 per share for an aggregate sum not exceeding Rs22.76bn (2% of total paid-up equity) through a tender offer. The offer represents a 30.6% premium on the CMP. In Q2FY21, availability (PAF) improved by 775bps yoy across coal-based plants to 91.8%, while load factor (PLF) remained flat at 64.3%. H1Y21 under-recovery stood at Rs5bn vs. Rs4.5bn yoy and management expects it to decline to Rs2.5bn by FY21 end. Revenue/EBITDA increased 8.5%/13.9% yoy, led by a 9.8% yoy rise in generation from improved demand. APAT rose 23.3% yoy to Rs39.4bn, above Street estimates. YTDFY21, NTPC has added 984MW capacity and targets to add ~5GW each in FY21/22.
OutlookWe revise earnings to factor in a change in project mix as per commissioning targets. We maintain Buy on NTPC with a revised TP of Rs125 (Rs122 earlier), backed by its riskaverse regulatory business model and historic low valuations of 0.7x FY22E P/BV.
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