June 01, 2016 / 19:58 IST
ICICI Direct's research report on NTPC
NTPC’s reported a strong set of Q4FY16 results as an estimate beat was recorded on all fronts. Net revenues for Q4FY16 declined 6.2% YoY to Rs 18112 crore vs. our estimate of Rs 17336 crore. For FY16, revenues declined 3.7% YoY to Rs 70507 crore vs. Rs 73236 crore in FY15. The beat came in from 1.7% YoY growth in generation to 62.33 billion units compared to our assumption of 0.9% YoY decline to 60.38 billion units. Similarly, energy sent out increased 1% YoY to 57.95 billion units in Q4FY16.
NTPC is best placed in the power sector in terms of its regulatory based business model assuring RoEs of 15.5%. With incremental commercialisation of 7800 MW of capacity in FY16-18E, we expect NTPC to perform reasonably when the power sector is going through its restructuring phase. We continue to value NTPC at 1.3x FY18E book value and maintain our fair value of Rs 163/share with BUY recommendation.
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