NTPC reported robust operational numbers in Q4FY21 on the again of energy demand restoration. Whereas reported standalone (SA)/consolidated (cons.) PAT was Rs 44.8/46.5 bn, up 258/205% y-o-y, adjusted PAT was Rs 38.3/40 bn, up 31/25.2% y-o-y, respectively. Robust core earnings backed by 7.3/8.4% y-o-y improve in SA/cons. regulated fairness to Rs 663/840 bn helped improve FY21 EPS by 19.2/12.7% to Rs 14.7/15.9. NTPC has doubled its RE capability addition goal by CY32 to 60 GW and is on the proper path with 1.5 GW photo voltaic capability received in latest bids and participation in 5 GW of upcoming bids. It is going to add >13 GW RE capability in FY22-24.
Receivables declined by Rs 29 bn q-o-q to Rs 128 bn (decrease than FY20 degree of Rs 142 bn), helped by PFC/REC scheme. NTPC’s ultimate dividend of Rs 3.15/sh takes whole FY21 payout to Rs 6.15/share (increased than coverage and along with 2% share buyback). Keep Purchase.
Operational profitability stays excessive: In Q4FY21, cons. adj. PAT was 40 bn (up 25.2% y-o-y) and income was Rs 301 bn (down 0.3% y-o-y). Standalone adjusted PAT was Rs 38.3 bn (up 31% y-o-y) Income was Rs 265.7 bn (down 2.5% y-o-y). Different revenue was up 62% y-o-y attributable to increased LPS and dividend revenue.
Standalone/group gross technology in Q4FY21 was 77.6/91.7BU, up 13.7/20.6% y-o-y. Coal PLF was up 760bps at 77.1%. Common tariff was barely decrease at Rs 3.87/unit as PLF picked up. The set up targets are: FY22 – 5 GW thermal and 1.1 GW RE; FY23 – 4.9 GW thermal and 5 GW RE. FY22 capex goal is Rs 237 bn.
RE capability goal doubled to 60 GW: NTPC has doubled its RE targets to 60 GW by CY32 from 30 GW earlier. It’s focusing on to fee over 13 GW RE capability by FY24 to achieve 15 GW. Present operational RE capability is 1.35 GW whereas 2.9 GW is beneath implementation and three.3 GW is beneath varied phases of tendering. 12 months-wise cumulative RE capability addition targets: FY22 – 3 GW, FY23 – 8 GW, FY24 –15 GW. It is going to take part within the upcoming 5GW IREDA CPSU scheme. It has additionally signed MoUs with 5 states for establishing 17 GW at UMREPPs [Gujarat (4.75GW) and Maharashtra (2.64GW) already signed].
Capacities added assist improve regulated fairness and EPS: NTPC’s adjusted EPS for standalone/consolidated entity in FY21 was up 19.2/12.7% at Rs 14.7/15.9 aided by robust core earnings attributable to 7.3/8.4% improve in standalone/cons. regulated fairness y-o-y and streamlining of acquisitions.
A strong commissioning pipeline, supported by inexperienced initiatives will strengthen core earnings additional. Below restoration elevated to Rs 6 bn vs Rs 2.5 bn at FY20-end attributable to preliminary stability points on the newly-commissioned items of Darlipali and Lara and ash dyke breach at Kahalgaon. As all points at the moment are resolved, we count on substantial enchancment on this entrance.
Keep Purchase with an unchanged goal worth of Rs 165/share. It’s at present buying and selling at FY23E standalone P/BV of 0.8x (P/E of 6x) and FY23E consolidated P/E of 5.3x.