Axis Direct's research report on NTPC
Q2FY18 adjusted PAT grew 12% YoY at Rs 27 bn (vs. our estimate Rs 26 bn) in tandem with 17% YoY rise in regulated equity. Core RoE is still healthy at 20.2% though it contracted ~174 bps YoY due to under-recovery in fuel cost. Company clocked highest-ever quarterly commercial capacity addition of 3.3 GW in the quarter. This will accelerate earnings hereon driven by bunching up of capacity addition (~21 GW is under construction vs. ~52 GW installed).
Outlook
Maintain BUY with TP of Rs 197 on strong earnings visibility driven by 50% rise in regulated equity over FY17-20E and rising RoE on falling CWIP. Key risk to our call is CERC (regulator) lowering regulated RoE below 14% from FY20 vs. 15.5% currently due to lower interest rates and surplus power. A new CERC tariff policy is applicable from Apr’20.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
Read More
