NTPC Rating- buy- A good end to fiscal for company
时间:2024-06-26 13:34:08 阅读(143)
NTPC’s Q4FY22 earnings/management commentary reaffirms our thesis of an improving earnings quality with thermal as the mainstay of India’s energy security. Key highlights: i) Q4 PAT a 15% beat despite 70% decline in LPS income – recouping `2-bn fixed cost under-recovery and better realisations. ii) Overdue debtors down 25%. iii) 6GW brownfield thermal expansion on the cards. iv) Targeting 80% growth in captive mines offtake in FY23E (FY22 growth at 30%).
There are significant structural changes that could lead to a gradual re-rating of the stock – energy security, ESG focus, attractive valuations with the RE business at almost negligible valuations and under-ownership in the stock. Maintain ‘Buy’ and top pick status.
6GW thermal expansion on cardsGiven power demand-supply issues, there is a likely revival of medium-long-term PPAs. NTPC is expecting 6GW of brownfield thermal capacity expansion with an estimated capex of Rs 80-100 mn/MW on a regulated basis. It is likely to proceed with 1.3GW soon and expects EC clearance for others shortly. Despite ESG concerns, it does not expect any funding issues. On the RE front, there could be 0.9GW delay in RE commissioning due to BCD/GIB issues.
Outlook: Going strong on all countsWhile thermal will remain the backbone of NTPC’s earnings growth trajectory, its transition towards new energy is rolling well. Further, it has restructured its RE business for future strategic sale/IPO, likely in FY23. The stock is trading at an attractive 1x FY24 P/B (RE business almost free). Maintain ‘BUY/SO’ with Rs 194 TP.
猜你喜欢
- Crude oil prices extend gains on US plans to refill reserve, Canada’s wildfires
- Coal production target for FY25 is set at 850 MT
- Will profit booking in markets continue and Nifty hover around 21000- 8 things to know before the share market opens
- World Bank retains India growth forecasts for FY24 and FY25
- Year Ender 2023 l From wars to wonders- Here are some global events that made 2023 unforgettable
- Nifty to reclaim 18250 or profit booking to continue- 7 things to know before share market opens
- Nifty tops 17300, Sensex surges 1100 pts, here’s what is fuelling the rally; should you buy or sell-
- Yes Bank rating- Hold - Stake sale to lend stability to business
- Nifty, Sensex end flat in red; volatility likely to persist, add quality stocks on dips, say analysts