February 15, 2017 / 15:03 IST
Centrum's research report on NTPC We reiterate that our TP extends optimism on higher than Management-guided regulated equity base and capacity addition, but highlight potent risks of slippages in capacity addition. Also, our channel checks reveal that litigation with CERC over 2014 tariff regulations is on a slow track, and respite remains elusive. Earnings from captive coal mining which will commence over next 2 years in a meaningful manner will be key triggers for the stock to outperform.
Outlook
We retain Hold on NTPC with a revised TP of Rs 165 (earlier TP of Rs146) as we roll-over to Mar’19E. Core earnings appear weak despite lower tax rate and sequential higher other income with our inference of core RoE at 5.2% vs 5.5% in Q2FY17. Adjusted for lumpy prior period earnings, adjusted EBITDA/PAT per unit on a sequential basis reflect de-growth.
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