Moneycontrol
Last Updated : Feb 26, 2019 05:21 PM IST | Source: Moneycontrol.com

Hold NTPC; target of Rs 147: ICICI Direct

ICICI Direct recommended hold rating on NTPC with a target price of Rs 147 in its research report dated January 31, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

ICICI Direct's research report on NTPC


NTPC reported a decent set of Q3FY19 numbers wherein generation was in line with estimates coupled with higher-than-expected revenues (on account of higher realisations) and EBITDA (lower employee & other expenses). Accentuation of under recovery of fixed costs was pegged at Rs 1108 crore (YTDFY19), which was on account of lower PAF and unviability of coal at a few plants Reported revenues came in at Rs 24120.4 crore vs. estimate of Rs 22299.5 crore. The revenue beat mainly came in from higher-than-expected realisation at Rs 3.65/Kwhr. However, on an operational basis, gross generation grew 3.4% at ~70 billion units (BUs) vs. estimate of 71.2 BUs whereas energy sold grew 3.1% YoY to 65.3 BUs vs. our estimate of 66.5 BUs. PLFs of coal plants were at 77.7% vs. 76.9% in Q3FY18. As of 9MFY19, the company’s commercial capacity was at 44185 MW. Average tariff for 9MFY19 was at Rs 3.47/Kwhr.


Outlook


This coupled with a strong balance sheet profile will be negated with limited upside in multiples given thermal power as a segment faces long term visibility challenges in the wake of rising tide of renewables. Hence, we continue to value the company ay 1.1x FY20E book value and continue to ascribe a fair value of Rs 147 per share.


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.

First Published on Feb 26, 2019 05:21 pm
More From
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant