Views
4 years ago

NTPC Q4FY13 Result Update - Emkay Global Financial Services Ltd.

NTPC Q4FY13 Result Update - Emkay Global Financial Services Ltd.

NTPC

NTPC Result Update Earnings (consol.) forecast - Emkay vs. Consensus (Rs mn) Emkay Consensus Variance FY14E 106,389 114,852 -7.4% FY15E 116,497 125,384 -7.1% Source: Bloomberg Company description NTPC Ltd, Maha Ratna company, was incorporated by government of India in 1975 as central thermal based power generation utility. It currently owns and operates 39.2GW of generation capacity at group level with another ~20GW capacity is under-construction. It already has presence in consultancy and power trading and will soon start coal mining as well. It came up with an IPO in 2004 at Rs62/share. Focus Chart 29 Core ROE 28 27 26 25 28.2 24 27.1 23 24.6 22 23.7 23.5 21 FY10 FY11 FY12 FY13 FY14E Recent update • Commissioned 3.16GW and commercialized 3.82GW of standalone capacity in FY13 Investment rationale • Business model of NTPC is undergoing structural changes – (1) fuel supplies leading to lower PAF, (2) higher marginal cost impacting PLFs and (3) lower UI income • Core RoE of NTPC has come down from 28.2% in FY10 to 23.7% in FY13 & current trends hint at further slide. Moreover, ROE from tax grossing up (2.4%) is still built in, which is likely to go away after new tariff regulations come in force. • Even after assuming FY13 ROE as sustainable, we foresee strong case of RoE to start coming down gradually going forward 4-5% due to 1) lower supply by CIL, 2) tax grossing up, 3) UI and heat rate • NTPC to deliver EPS CAGR of 13% over FY12-15E; At CMP, it is trading at 1.5x FY14E book and 1.4x FY14E book • Recommend Reduce with a price target of Rs158/share Valuations Our target price of Rs158/sh (based on price to book) factors in 240bps decline in core RoE on various factors mentioned above. Investment risk (1) Incr. in PAF on higher CIL supplies for its old plants, assuming CIL takes decisions based on commercial gains & (2) regulatory risk from new tariff norms (FY14E-19E) Top Institutional holdings Name Holding % LIC 6.0 Comgest USA 0.6 ICICI Prudential Life 0.6 Capital Research and Management 0.4 JF Asset Management 0.3 Source: Factset Shares pledge Period Promoters holding Pledge % of Prom. holding Pledge % of total holdings Mar-12 84.5% 0.0% 0.0% Jun-12 84.5% 0.0% 0.0% Sep-12 84.5% 0.0% 0.0% Dec-12 84.5% 0.0% 0.0% Mar-13 75.0% 0.0% 0.0% Source: Capitaline Emkay Research May 13, 2013 4

NTPC Result Update Key Financials (Consolidated) Income Statement Y/E Mar (Rsmn) FY12A FY13A FY14E FY15E Net Sales 614,622 648,380 722,745 810,784 Growth (%) 11.9 5.5 11.5 12.2 Expenditure 479,374 485,599 546,652 611,460 Raw Materials 0 0 0 0 Employee Cost 30,905 33,601 38,737 45,100 Other Exp 448,469 451,998 507,916 566,359 EBITDA 135,248 162,781 176,093 199,324 Growth (%) -4.3 20.4 8.2 13.2 EBITDA margin (%) 22.0 25.1 24.4 24.6 Depreciation 27,917 33,968 39,159 45,592 EBIT 107,331 128,813 136,933 153,732 EBIT margin (%) 17.5 19.9 18.9 19.0 Other Income 26,998 28,926 33,075 33,205 Interest expenses 19,104 21,304 24,560 28,594 PBT 115,225 136,436 145,448 158,343 Tax 29,124 45,494 43,472 47,477 Effective tax rate (%) 25.3 33.3 29.9 30.0 Adjusted PAT 86,101 90,942 101,976 110,865 Growth (%) -4.6 5.6 12.1 8.7 Net Margin (%) 14.0 14.0 14.1 13.7 (Profit)/loss from JVs/Ass/MI 0 0 0 0 Adj. PAT After JVs/Ass/MI 93,233 90,656 106,389 116,497 E/O items 7,246 26,627 0 0 Reported PAT 100,479 125,908 106,389 116,497 PAT after MI 93,233 90,656 106,389 116,497 Growth (%) 0.5 -2.8 17.4 9.5 Cash Flow Y/E Mar (Rsmn) FY12A FY13A FY14E FY15E PBT (Ex-Other income) 88,227 107,510 112,374 125,137 Depreciation 27,917 33,968 39,159 45,592 Interest Provided 19,104 21,304 24,560 28,594 Other Non-Cash items 0 0 0 0 Chg in working cap 3,706 -28,791 16,106 -7,850 Tax paid -31,024 -39,592 -43,472 -47,477 Operating Cashflow 107,930 94,397 148,726 143,997 Capital expenditure -151,260 -136,014 -140,000 -140,000 Free Cash Flow -43,330 -41,616 8,726 3,997 Other income 26,998 28,926 33,075 33,205 Investments -4,956 -13,401 -6,010 -6,611 Investing Cashflow -150,166 -158,118 -153,518 -156,741 Equity Capital Raised 0 0 0 0 Loans Taken / (Repaid) 44,490 75,823 50,592 50,592 Interest Paid -19,104 -21,304 -24,560 -28,594 Dividend paid (incl tax) 0 0 0 0 Income from investments 0 0 0 0 Others 0 0 0 0 Financing Cashflow 25,386 54,519 26,032 21,997 Net chg in cash -16,849 -9,201 21,240 9,253 Opening cash position 243,555 226,823 227,502 247,566 Closing cash position 226,706 217,622 248,742 256,819 Balance Sheet Y/E Mar (Rsmn) FY12A FY13A FY14E FY15E Equity share capital 82,455 82,455 82,455 82,455 Reserves & surplus 664,757 733,852 794,068 859,534 Net worth 747,212 816,306 876,523 941,989 Minority Interest 0 0 0 0 Secured Loans 476,373 552,197 602,788 653,380 Unsecured Loans 0 0 0 0 Loan Funds 476,373 552,197 602,788 653,380 Net deferred tax liability 6,369 9,153 10,832 12,656 Total Liabilities 1,229,954 1,377,656 1,490,143 1,608,025 Gross Block 815,115 1,028,761 1,085,633 1,340,115 Less: Depreciation 363,109 397,077 436,236 481,828 Net block 452,006 631,685 649,397 858,287 Capital work in progress 446,403 368,770 451,899 337,417 Investment 46,702 60,103 66,114 72,725 Current Assets 463,266 550,606 526,721 567,914 Inventories 37,029 40,572 51,463 57,732 Sundry debtors 114,486 53,655 118,785 133,255 Cash & bank balance 226,823 227,502 247,566 254,755 Loans & advances 84,929 228,877 108,907 122,173 Other current assets 0 0 0 0 Current lia & Prov 178,423 233,509 203,987 228,317 Current liabilities 140,230 156,055 159,075 177,934 Provisions 38,193 77,454 44,912 50,383 Net current assets 284,843 317,098 322,734 339,597 Misc. exp 0 0 0 0 Total Assets 1,229,954 1,377,656 1,490,143 1,608,026 Key Ratios Y/E Mar FY12A FY13A FY14E FY15E Profitability (%) EBITDA Margin 22.0 25.1 24.4 24.6 Net Margin 14.0 14.0 14.1 13.7 ROCE 0.0 0.0 0.0 0.0 ROE 13.0 11.6 12.6 12.8 RoIC 22.3 20.9 18.9 18.4 Per Share Data (Rs) EPS 11.3 11.0 12.9 14.1 CEPS 14.7 15.1 17.7 19.7 BVPS 90.6 99.0 106.3 114.2 DPS 4.0 4.5 4.3 4.7 Valuations (x) PER 13.7 14.1 12.0 11.0 P/CEPS 10.5 10.3 8.8 7.9 P/BV 1.7 1.6 1.5 1.4 EV / Sales 2.5 2.5 2.3 2.1 EV / EBITDA 11.3 9.8 9.3 8.4 Dividend Yield (%) 2.6 2.9 2.8 3.0 Gearing Ratio (x) Net Debt/ Equity 0.3 0.4 0.4 0.4 Net Debt/EBIDTA 1.8 2.0 2.0 2.0 Working Cap Cycle (days) 34.5 50.4 38.0 38.2 Emkay Research May 13, 2013 5

Blue Star Q2FY12 Result Update - Emkay Global Financial Services ...
Equity Schemes - Emkay Global Financial Services Ltd.
Bangalore Housing Market - Emkay Global Financial Services Ltd.
The impact of the global financial crisis on social services in Australia
Financial Services Sector Supplement - Global Reporting Initiative
Financial Results 2008 - SC Global Developments
Financial Results 2003 - SC Global Developments
Financial Results 2011 - SC Global Developments
Speed Global = XiRUTE Financial Database - Hitachi Solutions, Ltd.
Global compensation update: Issue 2 - 2012 - White & Case
The annual ranking of vendors to the global financial services ...
Global Sourcing of Financial Services and Healthcare - Center for ...
2012 Global Communications Service Provider Financial ... - Subex
TNPL Q4FY13 Result Update - Emkay Global Financial Services Ltd.
ONGC Q4FY13 Result Update - Emkay Global Financial Services Ltd.
Wipro Q4FY12 Result Update - Emkay Global Financial Services Ltd.
Result Update - Emkay Global Financial Services Ltd.
Mphasis_Oct'11 Result Update - Emkay Global Financial Services Ltd.
Lupin Q1FY14 Result Update - Emkay Global Financial Services Ltd.
GIPCL Q2FY12 Result Update - Emkay Global Financial Services Ltd.
BPCL Q1FY12 Result Update - Emkay Global Financial Services Ltd.
BHEL Q4FY12 Result Update - Emkay Global Financial Services Ltd.
SAIL Q1FY14 Result Update - Emkay Global Financial Services Ltd.
BHEL Q4FY13 Result Update - Emkay Global Financial Services Ltd.
TRF Q4FY12 Result Update - Emkay Global Financial Services Ltd.
GSFC Q2FY12 Result Update - Emkay Global Financial Services Ltd.
Result Update - Emkay Global Financial Services Ltd.
9am with Emkay - Emkay Global Financial Services Ltd.
Cadila Q2FY12 Result Update - Emkay Global Financial Services Ltd.
Infosys Q1FY14 Result Update - Emkay Global Financial Services Ltd.