Broker’s call: NTPC (Buy)

Target: 205 rupees

CMP: INR 174.05

NTPC Ltd It reported net sales of Rs 44,200 crore (+19 per cent yoy, -1 per cent qoq), 6 per cent lower than GM’s financial forecast. Year-over-year revenue growth was driven by higher generation and better financial instruments during the quarter. EBITDA for the quarter came in at Rs.11,900 crore (+5 per cent yoy, -18 per cent qoq), 21.7 per cent below our forecast.

The error in our estimates was largely due to lower tariffs and higher than expected fuel costs during the quarter. Fuel cost increased during the year due to higher coal imports. Imported coal accounted for 6.5 percent of total coal requirements in FY23, compared to 1.2 percent in FY22. Adjective. PAT came in at ₹4,870 crore (-6 per cent yoy, -14.8 per cent lower than our forecast).

Independent regulated equity grew by 9.5 per cent year-on-year to Rs.77,600 crore on the back of a 3.9GW capacity increase in FY23. Installed renewable capacity is currently 3.2GW (1,352MW commissioned in FY23) and 4.6GW Others are in progress.

With this, NTPC’s journey continues to transition to a balanced portfolio (45 percent renewables, 47 percent thermal, and 8 percent other) by FY32.